Click on case study title below to review.

• Business Office Outsourcing Vendor Change Vastly Improves Client’s Self-Pay Accounts Receivable Services

• Kadent Healthcare Winds-Down Burdensome Hospital Accounts Receivable Inventory Post-Sale

CASE STUDY – Business Office Outsourcing Vendor Change Vastly Improves Client’s Self-Pay Accounts Receivable Services

Client Background – Client is a multi-facility healthcare provider in the Midwest operating in a centralized business office (“CBO”) environment, which outsources its pure self-pay and residual self-pay patient account balances approximately 30 days after billing.

Support Analysis - Prior to Kadent Healthcare’s engagement, the provider was experiencing difficulties in obtaining requested customized revenue cycle data from its business office outsourcing vendor.  In addition, the data it was receiving was not always timely or accurate and uncollected accounts were not always returned for bad debt identification on a timely basis.  The provider also believed recovery rates could be improved.

Kadent Healthcare Solution - Upon engagement the following initiatives were implemented:

• Provided a management team dedicated to the success of the partnership.
• Developed a comprehensive work plan with critical goals, target dates, costs and risks.  The plan included assessments of :

• The client’s culture and expectations,
• The information technology environment,
• CBO policies and procedures,
• Individual hospital needs and demographics,
• On-site staffing needs and
• Reconciliation, custom reporting and other information needs.

Key Team Kadent Results

• Kadent Healthcare was able to understand the client’s patient financial system file configuration, program and debug a file transfer application and accept initial placements into Kadent Healthcare’s collection management system within two weeks. 
• Workflows were customized to maximize recoveries and incorporate the client’s culture on patient service and collection efforts.  For example:

• All staff were trained on interaction with client’s patients,
• Letter series and call strategies were developed,
• Policies were established to screen for hospital-specific charity care criteria,
• A process was implemented to rechallenge availability of third-party insurance,
• An effective maintenance payment plan system was developed and
• An automated bad debt turnover process was implemented that prevents delays in forwarding accounts for bad debt collection, further accelerating the client’s cash flow.

• Hired and trained on-site staff to assist in workflows within three weeks.
• Developed and provided daily close reports, daily notes files, weekly reconciliation reports, weekly bad debt returns reports and an extensive month-end reporting package including aging reports, mail return statistics and installment account analyses.  Kadent Technologies’ Receivables Portfolio Manager (RPM) tool was utilized to craft a variety of client-requested customized reports.
• Implemented a weekly inventory reconciliation nearly eliminating balance discrepancies.
• Established weekly meetings with operational management as well as bi-monthly meetings between client and Kadent Healthcare senior management.
• Valid patient complaints exceed Six Sigma levels of performance satisfaction and compliance and recorded calls are produced within 24 hours of request.
• Recoveries on mature placements increased from 16% to 31%, representing nearly $18 million in annualized increased collections.

CASE STUDY – Kadent Healthcare Winds-Down Burdensome Hospital Accounts Receivable Inventory Post-Sale

Client Background – Kadent Healthcare’s client is a national multi-facility healthcare provider that sold three hospitals comprising one of its regions.  Kadent Healthcare previously outsourced the client’s pure self-pay and residual self-pay patient account balances approximately 45 days after billing.  Each hospital maintained its own business office staff, who became employees of the buyer upon consummation of the sale. The hospitals’ accounts receivable remained the assets of our client.  The retained pre-bad debt inventory consisted of 10,059 accounts, including all third-party payor accounts amounting to patient accounts receivable of $9.9 million ranging in age up to 730 days old.

Support Analysis – The client did not have the labor resources to undertake either the resolution of the retained accounts or management of the various collection agency inventories.  Kadent Healthcare was engaged to fully undertake responsibility for these accounts from performing all required post-discharge patient financial services to placing and managing bad debt accounts with the client’s established collection agencies.

Kadent Healthcare Solution - Upon engagement the following initiatives were implemented:

• Provided a management team dedicated to the success of the partnership.
• Developed a comprehensive work plan with critical goals, target dates, costs and risks.  The plan included assessments of:

• Each hospital’s business office policies and procedures,
• The client’s healthcare information systems,
• The extent of remaining billing required for unbilled patient services as of the sale date and unprocessed primary and secondary billings for all third-party payors,
• The existing inventory of pre- and post-bad debt patient accounts,
• Cash posting, refund, adjustments, cash management and credit card management processes,
• The contractual arrangements and reconciliation processes with existing third-party collection agencies,
• On-site staffing needs,
• The client’s reporting and other information needs and
• Communication protocols with the buyer.

Key Team Kadent Results

• Assumed full responsibility for the sold-hospital patient accounts receivable inventory immediately following the sale, relieving the client’s management of the burdensome allocation of its scarce patient financial services resources.
• Reconciled collections received by the buyer that relate to pre-sale accounts receivable inventory daily for the first 7 months post sale, then reverting to semi-monthly.
• Reconciled collection agency inventory monthly.
• Developed various operational reports for the client (e.g., daily lock box deposit log, monthly inpatient and outpatient accounts receivable aging report by payor, returned mail, installment payment status and bad debt placement detail).
• Held weekly meetings with the client’s operational management.
• Provided required information for Medicare audit purposes.
• During the first 12 months, reduced pre-bad debt inventory from 10,059 accounts or $9.9 million to 2,814 accounts or $2.4 million (primarily accounts awaiting state reimbursement resolution) as follows:

• Collected cash of $3.1 million,
• Identified and posted other adjustments of $2.8 million,
• Referred 1,830 accounts or $1.6 million to established third-party collection agencies.