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Key takeaways
- Define whether aging begins at service, invoice, submission or due date.
- Separate unbilled work from invoices and claims already submitted.
- Test later collections and credits instead of accepting face value.
Why it matters in a senior care sale
A payer group can reveal why cash is slow to arrive. A private-pay client, a health plan and a public program may follow different payment paths. Put their balances in clear groups before comparing collection trends. Keep unbilled work apart from invoices or claims already sent.
Ask for the date of the report and the date used to age each balance. The service date, invoice date and due date are not always the same. A change in that choice can make a balance look older without changing when payment is expected.
What records should support the schedule
Match the total to the ledger. Check allowances, credits, disputes and later receipts. IRS guidance supports keeping records behind business income and costs. An account label alone does not prove that an invoice can be collected. (Source: IRS)
For an illustrative example, two invoices are equally old. One is paid soon after the report date. The other remains disputed because billed hours do not match the service record. Age alone hides the difference between those cases.
What the buyer needs to decide
Distinguish the contractual right to collect from expected recovery and any refund or recoupment exposure. These are separate valuation and responsibility questions for the accounting and legal review.
Agree whether receivables are included in the sale, how they are valued and who does the follow-up work. Identify the records and system access needed to collect old balances. Keep the proposed value separate from a plan that assumes every invoice will be paid.
For Medicare-certified providers, receivable ownership and provider-agreement obligations are separate issues. Excluding receivables should not be assumed to eliminate all payer liability. Counsel should review the actual structure. (Source: 42 CFR 489.18)
The AR ownership and closing review also separates a later mixed deposit into seller-owned and buyer-owned receipts. That allocation is a different task from deciding the value of receivables included in the price adjustment.
How to share the evidence
Keep financials and identifying details out of pre-NDA outreach. During authorized financial review, use grouped payer totals where these answer the question. Small groups and codes can still reveal identities. Obtain privacy review before sharing protected information. HHS's minimum-necessary guidance has a defined scope and exceptions; an NDA does not replace that review. (Sources: HHS minimum necessary, HHS de-identification)
Use the working-capital guide to connect the schedule to the cash plan and deal terms. Decide who handles later credits, refunds and payments that cover periods on both sides of closing.
Frequently asked questions
What does AR stand for?
Accounts receivable: amounts recorded as owed to the business. Their value depends on the underlying rights, records and likelihood of collection.
Is every old balance uncollectible?
No. Investigate the payer, reason for delay, documentation, disputes and later receipts. Age is a signal for review, not a complete conclusion.
Is recent AR always good?
No. A recent invoice can have an authorization problem, billing error or dispute that prevents collection.
Should I send receivable schedules in pre-NDA outreach?
No. Keep financials and identifying details out of the first outreach. During authorized diligence, consider grouped or coded schedules for the defined question. Small groups and codes can still reveal identities; privacy review determines what may be shared.
Sources
Sources are dated to distinguish current guidance from earlier publications. They support the identified facts; the transaction questions and examples are educational analysis.
- IRS: business recordkeeping (2026). Retrieved September 5, 2026.
- eCFR: 42 CFR 489.18 (2026). Retrieved September 5, 2026.
- HHS: minimum necessary requirement (2003). Retrieved September 5, 2026.
- HHS: de-identification guidance (2026). Retrieved September 5, 2026.