Aspen Valley Hospital: A Streamlined Business Office

AVH, because of its location in a resort community, faced inordinate challenges in recruiting and retaining the skilled employees required to support the complex processes associated with healthcare receivables management and processing. Therefore, Aspen Valley Hospital had an even greater challenge keeping business office performance at or above industry standards.

Performance Issues

AVH’s business office performance began to suffer. Claims processing slowed, accuracy was impacted and payer denials increased dramatically. Cash flow dropped and receivables increased, causing a dramatic increase in the receivables at the end of 2005. Following the implementation of the business process optimization program, all key performance indicators have shown marked improvements and AVH decided to move to an outsourced solution with CSC managing it.

Patient Revenue Improvement

While the patient revenues for the two periods (2004 – 2005) were basically flat, billed receivables increased 13%, accounts aged greater than 151 days increased by 50% and total receivables increased by 35%. AVH management immediately identified staffing issues and ineffective processes as the cause. With the continuing deterioration of receivables and decrease in cash collections, reinventing the revenue cycle processes was identified as the highest priority by AVH leadership. In order to validate and correct the performance issues, CSC identified the immediate need for dedicated resources to address the AVH receivables. CSC evaluated the billing and collection follow-up processes and identified opportunities to accelerate the AVH cash collections. CSC was retained as AVH’s receivables management partner to assist in designing the revenue cycle (billing and collections) processes. CSC identified performance metrics and created reports to reflect current and historical performance. Utilizing a full business process optimization approach, CSC immediately evaluated and provided the resources needed to address the receivables.

“The combination of CSC’s skills in IT services, coupled with our outsourcing to them of our billing office, has produced almost unbelievable results in reducing our accounts receivable and increasing our cash. I’ve never seen anything like it in my 28 years as a healthcare finance professional.” Terry Collin, CFO for Aspen Valley Hospital

Days cash on hand was one of the key indicators tracked by AVH to measure financial performance. As a result of CSC’s focused receivables initiatives, cash on hand days increased from 73 days (12/05) to 390 days (12/11), and net days in accounts receivable were reduced from 111 (12/05) to 33 (12/11). Billed receivables have shown marked improvement as shown above.

For more information on our Revenue Cycle solutions, please contact us.