Revenue Cycle Outsourcing Strengthens The Steadman Clinic’s Financial Performance

Challenge

The Steadman Clinic—a world-renowned Colorado orthopaedic clinic specializing in the diagnosis and treatment of sports-related injuries for recreational and professional athletes—was navigating the changes of a growing practice. Clinic leadership determined that outsourcing revenue cycle management could help the practice reduce costs and improve reimbursements, while allowing the clinical teams to maintain focus on providing excellent patient care.

Guidehouse’s revenue cycle managed services and outsourcing team began a working relationship with The Steadman Clinic, which continued as the practice increased its footprint to five locations. This included:

• A more complex revenue cycle management system designed for multiple locations
• Integration with a new practice management system for maximum efficiency
• Identifying other opportunities for revenue enhancements

Solution

Phase 1 

Using a proprietary web-based analytics system, the Guidehouse team analyzed The Steadman Clinic’s key revenue cycle performance metrics, including average days in accounts receivable and payment per work relative value unit (wRVU), to identify performance improvement opportunities.

With the system’s real-time, customizable business intelligence at hand, the team was able to implement an innovative, end-to-end revenue cycle management solution covering claims submission, payment processing, denials and appeals management, patient-interfacing support, accounts receivable, and bad debt management. This helped the clinic improve its financial performance while reducing the administrative complexities of its regulatory compliance and IT upgrades.

Phase 2

As The Steadman Clinic continued to expand, the team adopted a new electronic health record with Modernizing Medicine (ModMed). In 2019, The Steadman Clinic integrated ModMed’s practice management system, and Guidehouse provided support during the implementation process, including identifying important differentiators about The Steadman Clinic:

• As a world-renowned provider in orthopaedic surgery, The Steadman Clinic surgeons perform a large number of unlisted procedures (about 50 per month, or 5% of the total surgical case volume)
• An additional 5% of its listed surgical procedures qualified for “increased procedural effort,” which means that the Modifier-22 policy for increased procedural services could be applied

Following system conversion and stabilization, the Guidehouse team monitored and analyzed The Steadman Clinic’s key revenue cycle performance metrics, including average days in accounts receivable, aged accounts receivable, and clean claim rates. Through process improvements and working with physician teams and clinic staff, the team was able to help drive significant improvements. 

Impact

After implementing the initial revenue cycle management solution in phase 1, the clinic realized:

• 21% increase in monthly cash collected
• 16% increase in payments per wRVU
• 28.5% decrease in total accounts receivable
• 35% decrease in average days in accounts receivable

Following the implementation of ModMed and other innovations in phase 2, the clinic experienced several notable improvements, including:

• 19% reduction of days in accounts receivable (average of 9.3 days within 12 months)
• 15.8% increase in cash collections ($11.2 million) within 12 months
• 7.2% reduction in total accounts receivable
• Clean claim rate that consistently exceeded 95% within 6 months

Despite performing a significant volume of unlisted and high-complexity surgeries, The Steadman Clinic continues to see improved revenue cycle performance with support from the Guidehouse collaboration, enabling physicians to continue to focus on care instead of collections.