Physician Group's Revenue Cycle Initiative Yields '300% Return on Effort'

Diane Butler via HealthLeaders Media

One of the primary goals of Dignity Health Medical Foundation's (DHMF's) revenue-cycle initiative was to improve accounts receivable performance without relying on increased effort — and expense — at accounts receivable vendors. This goal was met by increasing staff time in the DHMF central business office created mainly with overtime hours.

With the additional staff hours, AR was assessed on a weekly basis. The assessments targeted several classes of accounts that had aged beyond 120 days, including these:

  • Rejections of claims over $1,500 due to medical record requests
  • Claims rejections for surgeries and infusions due to missing information such as operative report notes
  • Government claims that could be collected potentially quickly, such as Medicare claims
  • High-dollar recurrent patients
  • Commercial payers with a history of paying relatively quickly

DHMF focused on accounts aged beyond 120 days for two reasons, said Diane Butler, a director at Guidehouse, which helped implement the physician group's revenue-cycle initiative. First, the difficulty of collecting accounts increases significantly after 120 days. Second, AR aged greater than 120 days is customarily "reserved," with organizations setting aside cash in the event of failure to collect and eventually transferring the outstanding balance to bad debt.

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