Situation:
This large teaching hospital is well-known for its organ transplant program and is designated as a Level I trauma center. With many of their patients staying for extended periods, receivables and bad debt was a concern. They had recently promoted one of their Collection Specialists to Manager of Credit and Collection. Although the manager had a clear understanding of the follow-up and collection process, this manager had little experience in ‘managing' the numbers.

Masters Associates Main Objectives:

• Train new manager
• Analyze AR and BD receivables
• Implement Bad Debt reconciliation procedures
• Review and develop management reports

Approach:
Masters Associates was contracted to train the new manager, review existing management reports, and if necessary, develop new reports. Masters Associates was also asked to implement reconciliation procedures for the Bad Debt process. At that point, the hospital was using one collection company and did not know how well the agency was doing. Masters Associates assisted in the Bad Debt reconciliation for the past 12 months. Based on that information, the hospital decided they needed to use a 2nd outsource company. While supporting the manager during the selection and implementation process, Masters Associates also assisted in creating polices and procedures for managing their collection companies in the future.

Each week, numerous reports were being delivered to the manager's office and were piling up in the corner. Masters Associates reviewed them with the manager and found that many were unnecessary. What was needed, however, was a comprehensive report that would tell the whole story, i.e.; a comparison of Cash, Revenue, and AR by payer. After pulling all the components together, Masters Associates worked with the AR analyst to develop and automate a new report for the Collection Manager.

While training the new manager and working with the collection staff, Masters Associates found that unbilled, small balances, and balances that should have been taken to contractual were hitting the collector's worklists, thus reducing their productivity. After correcting these issues, the collectors were able to concentrate on the accounts that were truly collectable.

Results:
Within a short time, the manager had a thorough understanding of her responsibilities and could now establish staff goals, measure their productivity and focus her staff's efforts. She was able to set realistic cash targets, and they were all very excited about the increased cash that was coming into the facility. Their days dropped from 72.5 to 65.9 and their cash had increased by 1.2 million.