March 23, 2018
A general medical and surgical hospital located in Rocky Point, North Carolina, with 303 beds providing for approximately 64,000 Emergency Room visits and 12,000 admissions per year, was experiencing significant increases in bad debt as well as substantial reductions in cash and net revenue ending Q2 2016.
NHC looked to an outside firm to identify the root causes of these conditions and provide a framework for improvement – thinking there might be significant opportunities to improve the coordination and effectiveness of their Revenue Cycle activities.
Mazars USA was engaged to assist NHC in the evaluation of their current Revenue Cycle workflows and systems impacting output, and the identification of steps to improve performance, decrease bad debt, and increase net revenue. In today’s challenging payment environment, it is essential for healthcare organizations to develop an efficient and effective Revenue Cycle process with the understanding that there are many related and individual activities that oftentimes clash and do not work harmoniously together.
The project team initiated the engagement by performing a detailed assessment of NHC’s Revenue Cycle processes which included:
- Conducting extensive interviews with management and staff, along with onsite observations, to better understand their processes and to identify inconsistencies with workflow requirements;
- Compiling, reviewing and evaluating specific data aimed at identifying areas of concern;
- Identifying the challenges that may present difficulties going forward given the current resources and magnitude of the opportunities;
- Identifying beneficial best practice opportunities for process improvement analysis; and,
- Evaluating the current infrastructure and controls as they are practiced within NHC.
Upon completion of the preliminary work, consisting of interviews and test work, the project team prepared an executive summary and detailed report reflecting the findings and recommendations along with exhibits supporting their conclusions. Some of the key supporting exhibits consisted of a payer contract weakness analysis, a CDM process review study, and a key performance indicator matrix with target and baseline data – all of which assisted NHC in re-positioning some of their immediate goals and objectives.
The project team identified significant opportunities to improve net revenue, accelerate cash and reduce bad debt of nearly $18 Million dollars by the completion of this study.
More specifically, the project team identified a one-time Increase of $6 Million dollars from improved Accounts Receivable management, and on-going increases of $11.5 Million dollars from enhancements in point-of-service cash collections, reductions in bad debt, clinical documentation improvement, denials management and Medicaid advocacy.
In addition, these stated opportunities led to the client requesting that we provide them assistance implementing the changes necessary to capture the revenue.