AR Recovery When Closing a Medical Practice: Don't Leave Money on the Table

One of the most common mistakes physicians make when closing a practice is walking away from outstanding accounts receivable. In our experience, the average practice has $200,000-$500,000 in outstanding AR at the time of closure decision. Much of this is recoverable — and the recovery often covers the entire cost of professional closure consulting.

Why AR Gets Abandoned

When a physician decides to close, the natural instinct is to wind down quickly. Staff are demoralized, systems are being shut off, and the mental bandwidth for chasing insurance claims evaporates. The result: claims that could have been collected sit untouched until they age out of filing deadlines.

The AR Recovery Strategy

Step 1: Complete Inventory

Before anything else, run a comprehensive AR aging report segmented by: - Payer (commercial, Medicare, Medicaid, self-pay) - Aging bucket (0-30, 31-60, 61-90, 91-120, 120+) - Denial status (clean, denied, in appeals) - Dollar amount

Step 2: Prioritize by Recovery Probability

Not all AR is equally recoverable: - 0-60 day clean claims: 85-95% recovery rate. File immediately. - Denied claims with appeal rights: 40-60% recovery rate if properly appealed. - 60-120 day aged claims: 50-75% recovery rate depending on payer. - 120+ day aged claims: 15-30% recovery rate. Worth pursuing on larger balances. - Self-pay with insurance: Often a coding/billing error. Re-submit to insurance first.

Step 3: Race the Clock

Most insurance contracts have timely filing deadlines (typically 90-365 days from date of service). Once you notify the payer of panel termination, the clock ticks faster. Submit all outstanding claims BEFORE sending termination notices when possible.

Step 4: Pursue Denials Aggressively

Insurance denials during practice closure often increase because payers know you're closing. Don't accept denials passively. Appeal everything with merit. Many denials are automatically overturned on first appeal.

The Contingency Model

ClosureRx offers AR recovery on a contingency basis (15-25% of recovered amounts, no upfront cost). This means:

• If we recover $300,000 in AR, our fee is $60,000-$75,000
• The practice nets $225,000-$240,000 they would have otherwise lost
• There is zero financial risk — we only earn when you recover

The minimum AR threshold for our recovery service is $50,000. Below that, the economics don't support dedicated recovery efforts, but we'll still advise on self-service recovery strategies.

Key Takeaway

Don't close the billing software before you've exhausted recovery options. A few weeks of focused AR recovery effort can yield returns that dwarf the cost of professional closure consulting.