Accounts Receivable (AR) Definition

Accounts Receivable (AR) in the healthcare industry refers to the outstanding payments owed to a medical practice or healthcare provider for services rendered. This includes amounts due from patients, insurance companies, and other third-party payers.

AR represents the total of all unpaid claims and invoices for provided medical services. When a healthcare provider delivers services, they generate a claim or bill, which is then sent to the responsible party for payment. The amount listed on the claim or bill that has not yet been paid is recorded as AR. This financial metric is crucial as it directly impacts the cash flow and financial stability of a healthcare organization.