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A/R Wind Down

Patient Accounting System Conversion Results in Revenue Cycle Disruption at Hospitals, Data Shows

man_headache_laptop.jpgHot off the press, a new report highlights a deep struggle many hospitals and health systems are experiencing this very moment: the disruption in revenue cycle that occurs during and immediately after conversion to a new patient accounting system (PAS).

To be clear, the decision to switch to a new PAS is, first and foremost, common. Many healthcare organizations are taking this road, and it's nearly always the result of a larger initiative to drive efficiency into the health system in order to remain competitive, improve communication across the organization, boost patient loyalty, and, of course, realize cost savings and improve cash.

 But getting through the conversion can be a big, bad headache.

"The effects of a PAS conversion can have a dramatic impact on a hospital's revenue cycle. Although the long-term benefits of system conversion might outweigh the short-term challenges of implementation, the additional costs associated with implementations can be substantial if they're not tightly managed," said Brian Sanderson, managing principal of Crowe healthcare services, the organization spearheading the report.

Any migration to a new PAS should be viewed as more than just a technology implementation; operations and finance should be involved strategically as well as tactically. Further, establishing baseline metrics and monitoring throughout the process is imperative.

Data from the report reveals that most hospitals experienced significant disruption to revenue cycle metrics and to cash flows during the three months starting with the conversion. Accounts receivable days jumped from 52 days to more than 62 days. Billing and coding metrics experienced peak disruption in the first month. Discharged-not-final-billed (DNFB) days were up 86 percent and late charges rose by more than 600 percent. Details of the report can be found here, including a bulleted list of key findings.

You might be thinking "ouch" especially if you are mid-conversion or thinking about one. To this point, awareness is one thing, but action is another. MediRevv advocates approaching a system conversion using a phased, tiered approach to drive cash performance prior to and during system conversion, alleviating the caution signs highlighted in the report.

We often partner with healthcare organizations to create effective collection and resolution strategies specific to the legacy A/R system in place. This way, internal resources can be properly focused on the implementation, training and utilization of the new PAS.

One final note: if you choose a partner to help you with a system conversion, comprehensive knowledge and proficiency across both the legacy and new systems is a must, as it will make all the difference between a rocky or smooth ride. 

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