a. Although multiple (blinded) examples of real client data will be utilized, an example case study would be presented as follows: ABC Health System (ABC) is a 285 bed community hospital, with a large, employed primary care physician group and some outpatient ambulatory care sites. They were challenged with increasingly unfavorable payor mixes (approx 8% Self Pay, 13+% Medicaid and increasing) and upwardly trending bad debt/charity ratios. Days in A/R were <50, denials were negligible, and two collection vendors were in place. The organizations bad debt ratio was approximately 3.6% (bad debt dollars/gross revenues) and increasing, with charity care an equivalent percentage.

ABC desired an assessment of their revenue cycle functions to compare their Bad Debt/Charity policies and performance relative to market peers. The assessment focused on their current state and provided findings relative to organizational readiness for implementation of Bad Debt/Charity mitigating strategies/processes (e.g., Point-of-Service (POS) Collections, improved pre-service patient interactions, enhanced business office strategies, etc).

Approach: The approach selected to assess ABCs performance targeted the eight (8) core sources and functions that every hospital executive should perform to assess their bad debt management performance. These categories are:
Financial Advocacy: to triage patients in order to better understand their financial means.
Department Accountability: to establish mechanisms to detect and reduce payment risk policies and procedures.
Patient Flow: to develop appropriate processes for patient interaction (and flow) without Emergency Medical Treatment and Active Labor Act (EMTALA) risk.
Estimating co-pays and deductibles: to link patient services with their coverage options.
Pre-service collections: to institute appropriate tools and scripting V perhaps even incentives V to encourage collection efforts before or at time of service.
Connectivity to Medicare Bad Debt: to build standardized processes and data sets for capture of reimbursement add-ons.
Charity care / Other Program Workflow: to use Financial Advocacy to initiate the charity care (or other programs) process before it clogs the collections portfolio.
Management Reporting: to monitor, track, and manage uncompensated care performance metrics for sites of service, workflow productivity, and/or budgeting/reserve/hindsight analytics.

This approach is achieved via a combination of data analytics and operational interviews. The analytics assess patient throughput, transfers to collection agencies, repeat bad debtor studies, and qualification/quantification of patient liabilities. These fact based analytics are then coupled with procedural workflow understanding gleaned from interviews with functional managers in patient access and the business office.

Recommendations & Results: The key findings for this assessment revealed that the ED and OP surgery were the primary sources of bad debt for the organization, both from a volume and dollars perspective. Additionally, their extremely manual processes were making it difficult for registration staff to properly assess patient financial risk prior to, or at the time of service V while maintaining the appropriate wait time goals.
Through in-depth staff education sessions, patient pathway modification and minor involvement from Information Systems, various pre-service and point-of-service processes were enhanced help manage bad debt. However, certain registration personnel were intimidated by the prospect of change V particularly tasks that may involved uncomfortable interactions with patients regarding payment. As such, scripting, management reporting, incentives, and some appropriate redeployment was utilized to create an environment that was safe from a patient and employee perspective.

Twelve months post implementation, ABC continues to enjoy an approximate 11.1% decrease in their bad debt transfers (approximately 3.6% to 3.2%) with charity performing at pre-implementation rates.