Avoiding Hospital Closure

Unfortunately, rural health hospitals across the nation have been closing over the past few years, a situation not helped with COVID-19. In the months following the pandemic shutdown, patient volumes decreased tremendously impacting revenue. Many leaders struggled to develop strategies to reprioritize revenue cycle activities and maintain monthly cash flow. Seventeen hospitals closed as a result, despite receiving governmental assistance loans.

Mitigating Financial Impairment

This is in stark contrast to two rural hospitals that successfully mitigated potential financial impairment. The following demonstrates the initiatives these hospitals implemented to strengthen their financial position during difficult times including:

  • Recurring cash acceleration opportunity analysis
  • Weekly high dollar claim reviews
  • Weekly patient access quality audits
  • Observation hour root cause analysis
  • Review of Medicaid pending claims
  • Patient financial services time and motion studies

Increased Cash Collections

The results of their efforts were sizeable. At the end of six months, Hospital A and Hospital B executives reported combined cash collections of more than $2.1M.

Revenue Cycle Metric Hospital A Hospital B
A/R >90 days 15% reduction N/A
A/R >120 days 8% reduction 4% reduction
Aged A/R Gross Charges $2M reduction $978.70K reduction
Denial as a % of Gross Revenue 1.2% reduction 6.3% reduction
Discharge Not Final Billed (DNFB) 1.1 day reduction N/A

The hospitals attribute the positive impact on their financial performance to cash acceleration analysis and process improvement initiatives. Learning best practices successfully utilized by similar hospitals can be the difference between profitability and a hospital closing.  When a hospital closes, the community pays a pretty steep price. A good way for a hospital to ensure it can continue to fulfill its mission and serve its local community is to improve the revenue cycle.

Questions?

Windham Brannon’s Healthcare Advisory Practice is dedicated to assisting hospitals and healthcare providers optimize their revenue cycles.

Email Windham Brannon’s Healthcare Advisors Valerie Barckhoff at vbarckhoff@windhambrannon.com, and Danielle Epps at depps@windhambrannon.com, to discuss how Windham Brannon can assist your organization in optimizing the revenue cycle.