Accounts Receivable (DME)
Money owed to a DME supplier for equipment and services already rendered — a critical metric for cash flow in a rental business.
Accounts receivable (AR) in the DME industry represents the gap between services rendered and cash collected. Because most DME revenue flows through Medicare, Medicaid, or commercial insurance, billing cycles are long: claims are submitted, adjudicated (often taking 14–30 days), and then paid. Denials extend the cycle further.
DME suppliers typically see AR aging in the 30–60 day range for clean claims, but total AR can balloon when denials are high. Common denial triggers include missing documentation, incorrect HCPCS codes, missing serial numbers on delivery confirmation, or billing beyond the capped rental period.
Operations and billing are more tightly linked in DME than in most healthcare settings. If delivery techs don't record serial numbers, billing can't confirm delivery. If returns aren't tracked, the billing system may continue charging for a unit that's been sitting in the warehouse for weeks. Clean operational data — what was delivered, to whom, when, and with which serial number — flows directly into billing accuracy.
Suppliers with high AR days often have upstream operational data problems. Fixing tracking is often as impactful as fixing the billing workflow itself.