Choose a consistent definition
A gross-charge calculation and a net-revenue calculation answer different questions. Document the receivable balance, denominator, exclusions and measurement window before comparing periods. Do not use a gross receivable balance with a net-revenue denominator.
For a simple gross-charge example, define Days in A/R as ending gross patient receivables divided by average daily gross charges. Assume the same included services, payer categories and reporting population in both inputs. This operational calculation is not the same as HFMA’s net-days measure.
A worked example
Illustrative figures only: ending gross receivables of $450,000 and gross charges of $900,000 over 90 days produce average daily charges of $10,000. The resulting measure is 45 days: $450,000 ÷ $10,000. That calculation does not prove that every claim takes 45 days to pay, or establish whether performance is good for this practice.
Investigate a change
- Confirm the calculation and reporting scope have not changed.
- Review aging by payer and claim status, including rejected claims and disputed balances.
- Check whether charge volume fell while receivables remained similar; a denominator change can move the ratio.
- Separate collection delays from posting, adjustment or reconciliation differences.
- Assign an owner and next review date to each unresolved issue.
Understand the definition you are comparing
Primary reference: HFMA MAP Keys defines net Days in A/R (FM-1) using net patient receivables and average daily net patient service revenue over the latest three months. Use that net definition consistently; the gross-charge example above illustrates a different calculation.