What our first 60 days found at a behavioral health and SUD organization: $1.04M of AR waiting on credentialing

The organization

The client is a multi-site nonprofit health and human services organization in the Mid-Atlantic. Behavioral health and substance use disorder treatment are its largest service lines, and its payer mix is dominated by Medicaid managed care. The diligence data showed payments from 368 distinct payers. In the 13-month charge ledger, Medicaid accounted for 49% of charges, self-pay 21%, commercial 16% and Medicare 12%.

That mix creates a specific risk. Behavioral health and SUD programs employ many clinicians in different licensed and pre-licensed disciplines, each needing separate enrollment with each plan. Federal Medicaid rules require the state to screen and enroll every managed care network provider, so a clinician missing from either the state file or the plan roster can stop claims across a whole program.

What the diligence snapshot showed

Our first pass used the point-in-time AR and denial snapshot dated March 27, 2026. Insurance AR was $4,558,559, with 57.2% older than 90 days and 49.9% older than 120. Commercial AR was the most aged by share; managed Medicaid was the largest by dollars.

The denial inventory totaled $2,242,856 across 22,851 line items. The four largest root causes were coverage or non-covered service, missing information, credentialing, and timely filing. Credentialing and timely filing together came to about $570,000. Those two are the most preventable categories, because both are failures of process rather than payer policy.

What the transition extracts showed

After signing, we rebuilt every figure from three clean transaction extracts covering the six months from December 2025 through May 2026, and reconciled them to the cent with the client's finance team. Charges for the six months were $10.31M and net cash was $4.98M. Insurance AR at transition was $5.14M, with 52.9% older than 90 days, 42.4% older than 120 and 8.2% older than 365. Days in AR were 79 including self-pay and 103 excluding it. Open-denial AR was $1.46M.

The March and June figures come from different extracts, so we do not present the change between them as a trend. Both point the same way: more than half of insurance AR was past 90 days.

The single largest concentration in the whole book was one work queue: claims returned for credentialing, holding $1,036,334, or about 20% of insurance AR. These claims were held because a rendering clinician was not enrolled or not linked correctly with the payer, not because of a coding or medical necessity edit.

What we put in front of leadership

We kept the read-out to what the data could prove. Where a metric could not be computed from the files we had, such as net collection rate and first-pass rate, which need 835 allowed amounts and a clearinghouse first-pass feed, we marked it as data pending rather than estimating it.

The plan treated the credentialing queue as a revenue problem, not an HR task. It paired retro-enrollment work on the held claims with front-end controls so new clinicians are enrolled and linked before they see patients. Aged AR was split into separate work streams so the oldest balances would not crowd out claims still inside filing limits.

• Credentialing denials at or below 2% of denials
• SUD first-pass rate of at least 97% on a glidepath
• Authorization denials at or below 5% of mental health denials
• Behavioral health AR over 120 days at or below 25% on a glidepath
• Gross insurance AR over 90 days at or below 30% on a glidepath
• Claims submitted within 5 business days and denials worked within 5 days

What this means for other behavioral health organizations

If your organization employs counselors, therapists, social workers and SUD clinicians across several sites, look at your own work queues before your denial report. Credentialing holds often never become formal denials. They sit as returned or pended claims, aging quietly, until timely filing turns them into write-offs. In this engagement, credentialing and timely filing denials together were about $570,000 at diligence, and the credentialing queue was larger than any payer's denial balance.

We will publish measured results for this engagement once the stabilization period closes and the numbers are reconciled with the client. Until then, these are the baseline facts.