What does accounts receivable (AR) refer to in healthcare?

Accounts receivable (AR) in healthcare refers specifically to the payments that are currently owed to a healthcare provider for services rendered to patients. This includes any outstanding bills that have not yet been collected, such as claims awaiting payment from insurance companies or amounts due directly from patients. Understanding AR is crucial for healthcare organizations as it directly impacts their cash flow and financial health.

In contrast, the other options do not align with the definition of accounts receivable. The total costs incurred by the healthcare organization represent expenses rather than owed payments. Future revenue predictions based on patient load pertain to forecasting and budgeting rather than actual outstanding payments. Funds allocated for purchasing medical equipment refer to capital expenditures and investment, further diverging from the concept of AR, which is focused specifically on receivables arising from services already provided.