St. Charles Revenue Cycle Improvement Project Boosts Annual Net Revenue by $10 Million

Challenge

St. Charles Health System, a four-hospital health system and the largest provider in Central Oregon, was suffering from a workforce shortage and deepening financial challenges.

The nonprofit health system had demonstrated strong revenue cycle performance prior to COVID-19, with results that matched or exceeded peer group performance across key metrics and a 4% operating margin. However, the emergence of the pandemic put significant pressure on St. Charles’s financial health, with elevated staff turnover, declining cash on hand, declining net patient revenue, rising operating expenses, and accumulating financial erosion.

St. Charles’ management knew that investing in revenue cycle process improvement was a key lever to stabilize financial performance. Leaders sought a comprehensive strategy that could drive quick wins while supporting a long-term turnaround.

Solution

St. Charles engaged with Guidehouse to embark on a revenue cycle process improvement initiative. Guidehouse identified five areas where St. Charles could improve revenue cycle performance while strengthening clinical and operational efficiency across the system.

1. Reduce Denial Write-offs

St. Charles restarted a denials committee—backed by several task forces—to decrease denial write-offs and improve collaboration between patient access, hospital billing, professional billing, IT, and clinical operations. The health system also invested in tools and processes to reduce prior authorization denial write-offs and implemented work queue scoring to strengthen account prioritization and reduce timely filing denial write-offs.

2. Increase Charge Capture

St. Charles bolstered system tools to increase charge capture through the creation of several Epic Revenue Guardian edits and reconciliation reports.

3. Address Payment Variance

The health system established best-in-class processes for payment variance review (internal review, external review by vendor, and a continuous feedback loop). St. Charles contracted with a zero-balance account review vendor to capture additional charges and provide feedback on missed revenue opportunities. Revenue cycle leaders also improved reporting and workload prioritization, accelerating review of high priority accounts by more than two weeks.

4. Reduce Cost to Collect

St. Charles’s revenue cycle team implemented vendor management processes to improve accountability, increase collections, and reduce vendor fees. It also improved annual net revenue by more than $2 million by negotiating lower rates with existing vendors and bolstering self-pay vendor collection performance.

5. Identify Automation Opportunities

St. Charles leveraged task-mining software to identify repetitive tasks that could be automated to improve efficiency and reduce costs. Then, the health system developed several use cases for conversational automation to reduce denials and time spent on financial clearance and follow-up tasks. Additionally, St. Charles’ revenue cycle and IT teams looked for ways to optimize Epic and clearinghouse functionality to improve real-time eligibility checks and reduce time spent capturing additional information from patients.

Impact

St. Charles’ comprehensive revenue cycle improvement engagement helped drive overall margin improvement in a six-month timeframe, contributing to $10 million in annual net revenue improvement, a 5% operating margin increase in six months, a $680,000 daily increase in gross revenue, and $15 million in cash acceleration/seven-day reduction in accounts receivable.