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Hospital A Case Study: “All Efforts Exhausted”

Hospital A is a 770-bed non-profit, research and teaching hospital and part of a larger system. ARMC was engaged to take over follow-up and appeal on accounts that 1) in-house staff had worked but had “exhausted all efforts” and closed as uncollectible, and 2) accounts with no activities by internal staff for 90 days and were, subsequently, outsourced to ARMC to avoid untimely issues with payers.

Analysis: Over a multi-year period, Hospital A wrote-off 6,319 denied accounts for a total of $117.5 million dollars after having exhausted all internal efforts. ARMC made a second effort on these accounts, recovering 28% of the denied dollars for a total of $33.5 million returned to the hospital in unexpected cash. That money might have been written off and lost forever. Instead it went right to Hospital A’s bottom line, returning an ROI of $3.60 for every $1.00 of Hospital A’s collection expense.2  

1 One of the biggest challenges for any revenue cycle group is keeping a “clean A/R.” As indicated by the column entitled “Total A/R Reduction,” ARMC’s process not only collects money, but facilitates accurate and timely write-offs to improve A/R and revenue valuations, ensuring that reserve requirements can be more accurately calculated.  

2 It is significant to note that ARMC was paid out of money we collected—money that had historically been written-off and for which the hospital would typically have received nothing. Our contingency fee arrangement means that there was no up-front cost to the hospital.



Hospital B Case Study: “High-Volume/Low-Balance”

Hospital B assigns day-one, high-volume/low-balance (<$1,000) outpatient denials to ARMC immediately after the denial is received. ARMC acts as Hospital B’s small-balance unit on these denials, as the in-house staff hasn’t historically been able get to them. ARMC is also charged with complying with policies and goals set by Hospital B.

 

Analysis: In the first two years, ARMC worked 42,463 accounts for a total of $13.5 million for Hospital B, collecting $6.5 million, for a nearly 50% collection rate, with $1.9 million still in process. Significantly, ARMC has already “cleaned up” over 86% of the accounts by identifying true write-offs and/or re-statusing accounts to corrected payer codes or patient-pay. This program yields an ROI of $10.14 for every $1.00 of Hospital A’s collection expense.

1 One of the biggest challenges for any revenue cycle group is keeping a “clean A/R.” As indicated by the column entitled “Total A/R Reduction,” ARMC’s process not only collects money, but facilitates accurate and timely write-offs to improve A/R and revenue valuations, ensuring that reserve requirements can be more accurately calculated.  



Hospital C Case Study: “Quick Results”

Hospital C is a new client, and their experience illustrates the kind of impact ARMC can make in just the first 6 months. Hospital C assigns two types of accounts to ARMC: 1) Authorization Denials: these are patients whose insurance company denied certain procedure while the patient was still in the hospital. Most of these are clinical denials that are reviewed and appealed by our in-house clinical billers and physicians, and 2) in and outpatient denials after in-house efforts are exhausted.

 

Analysis: In the first 5 months of this engagement, ARMC worked only Authorization Denials. We were able to overturn as many as 26%, collecting over $270K already. We still have $5.4 million that we think may be collectible. ARMC has also identified true write-offs and/or re-statused accounts to corrected payer codes or patient-pay. Clearly, along with the extra cash, Hospital C is receiving the benefit of a “cleaned-up” A/R. This project, thus far, is yielding an ROI program of $5.60 for every $1.00 of Hospital C’s collection expense. Based upon initial results, Hospital C placed an additional $9.4 Million in “efforts exhausted” accounts with ARMC in the 6th month.



Physician Group 1 Case Study: “Business Office Extension”

Physician Group 1 is a hospital-owned multi-specialty group of several hundred doctors. The Group utilizes an outside billing company to submit an initial bill, send out statements and perform simple follow-up. Several years ago, the Group instructed the billing company to start forwarding problematic (denied, underpaid, and unresolved accounts) to ARMC after internal efforts were exhausted.

 

Analysis: : Over a multi-year period, Physician Group B had 89,053 problematic and denied accounts for $35 Million for which internal efforts had been exhausted. According to prior practices, these accounts would have been written-off. ARMC extended internal efforts and has recovered 11% of these accounts for a total of $3.8 million. That money went right to Physician Group 1’s bottom line. And there is still $5.2 million in process. The 11% Recovery Rate includes accounts recently placed; the ultimate resolution per placement is approximately 17%. Therefore, it is expected that an additional $800k will ultimately be recovered—just on the $5.2 Million currently being processed. This program yields an ROI of $3.00 for every $1.00 of Physician Group 1’s collection expense.1

1 One of the biggest challenges for any revenue cycle group is keeping a “clean A/R.” As indicated by the column entitled “Total A/R Reduction,” ARMC’s process not only collects money, but facilitates accurate and timely write-offs to improve A/R and revenue valuations, ensuring that reserve requirements can be more accurately calculated.  


 

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