Starting with a directive to improve collections on unpaid patient invoices, Promise Healthcare used internal and external groups to bring in nearly $14 million.
How can financial executives at hospitals and health systems tackle the pile of unpaid patient invoices sitting in the accounts receivables department? Promise Healthcare, a 13-hospital system based in Boca Raton, FL, used both internal and external resources to improve collections and add $13.9 million to its coffers in less than two years. The biggest key was to simply begin.
Promise set out to improve its accounts receivable processes and increase cash collections in June 2011, says Richard Gold, executive vice president, hospital operations.
"One of our key objectives was to accelerate cash flow, which is obviously something that is pretty important. It was clear we lacked some technologies, policies, and labor," he says.
Without collections expertise in his group, Gold had to look outside the organization for help. Promise has a long-standing relationship with a solutions and consulting firm it uses to assist in supply chain purchasing, and it looked there first.
"As our confidence in that partnership has grown, they were a natural to talk to on the revenue side," Gold says. "It was a bit of a marriage made in heaven. We handed them about $100 million in old receivables and said, 'here, you work on this.'"
The outside firm immediately went to work, starting with the oldest accounts first, because, as Gold notes, "The older an account becomes, the harder it is to collect."
Gold says he has a "practical" attitude toward the idea of working with another company on collections. "I'm not afraid to ask for help. I think our organization's strength was being able to surrender a little bit and understand and acknowledge that we had issues and attach a sense of urgency to that, which has been directly related to our results."
In addition to getting external help, Gold says Promise also looked within the organization, calling on employees in the finance area to improve internal collections processes.
"I told everyone the fact is we are not collecting at the rate that we should be, so let's pick some metrics for where we want to be and get moving towards it. That is all about style and leadership and how you get things done," he says.
Gold created a task force and charged those involved with coming up with ideas and solutions. The biggest issue identified by the task force was the need to improve the accuracy and completeness of the bills that were being submitted to the billing office.
"We have aggressively attacked the onboarding process. The overriding, prevalent problem was with getting accurate, complete information. We developed a checklist to make sure when the bills are submitted to the billing office, they are clean," Gold says.
All told, Promise has improved its collections by nearly $14 million in less than two years. Accounts receivable remains an "ongoing priority," Gold says. "It is a work in progress for us."
"It's been a consistent evolution of improvement to the metrics, to the measurements, to the assessments, to the whole organizational dynamic of healthcare management," he says.
Gold will share his success story during a session at the Healthcare Financial Management Association's ANI conference in Orlando on June 18.
"What I am looking to do for the group [at HFMA] is to tell a story to assist other healthcare entities that may have a similar issue with their accounts receivables," he says. "Everyone wants to accelerate their cash collections. … Mine is an anecdotal story where I say, 'We had a huge problem, and here is how we addressed it, and if it can work for us, it can work for you.'"