Case Study Update
At Cimarron Memorial Hospital, in Boise City, OK, the Board and a new CEO brought in 3rd parties to provide hospital management and Central Business Office (CBO) services as part of the hospital turnaround. In the process, cash on hand increased from 1.5 days to 75 days and all of this was done with no staff reductions.
Cimarron had suffered through years of declining results. The rural hospital’s situation was dire – it was down to just 1.5 days of cash flow on hand with mounting accounts payable to vendors. The Board engaged NewLight Healthcare, a rural hospital management and consulting firm, to lead the turnaround and recruit professional leadership. NewLight recruited Lee Hughes as the new CEO in large part due to his Revenue Cycle Management expertise.
One of Lee’s first actions was to garner Board support for difficult changes in the Health Information Management (HIM) and CBO departments. Lee realized that an entirely new direction was needed and proceeded to partner with EqualizeRCM, a Revenue Cycle Management firm.
After only seven months of overcoming cultural and work process changes, Cimarron has dramatically improved its revenue cycle management performance. Outstanding insurance AR reduced by 62% and today the hospital is on much stronger financial footing with over 75 days of cash on hand.
THE PROCESS
The critical first steps in transforming the Revenue Cycle included:
- Securing Board buy-in on Day 1 – Although the Cimarron Board saw the need for radical changes and acted to bring in NewLight Healthcare and a new CEO, there were concerns about bringing in new vendors that might either replace local jobs or increase the hospitals expenses. Lee and his team worked to secure support for the changes through one on one conversations to explain the benefits. EqualizeRCM was brought before the Board to make an in-person presentation. The contract was presented to the Board, not just to the executives, and the Board made the final decision. This upfront commitment was critical to ensuring Board support of the initial expense and challenges.
- Securing buy-in of change adverse, hospital employees – Perhaps the biggest challenge was gaining and continuing over time the buy-in of the key hospital staff. The staff had not had strong leadership and had worked diligently for years to keep the hospital viable. The seemingly sudden changes in leadership combined with outsourcing functions for which they had been responsible for years was challenging to accept. In addition to small group discussions, Cimarron engaged NewLight’s leadership development and culture alignment expert to spearhead a cultural transformation process that led to securing employee buy in.
- Finding the right partners – Many vendors can promise but not all can deliver. In making its choices, the Cimarron team leveraged its relationship with NewLight Healthcare to find the right partners. Specifically, Cimarron needed a partner that brought a combination of performance-based focus, commitment to rural health care, and proven capabilities. EqualizeRCM brought over eight years of direct experience, over 500 RCM associates and a passion for achieving excellence for each client – regardless of size or location.
KEY FINDINGS
In the process of turning around the RCM performance, the Cimarron and EqualizeRCM teams relied on three key premises.
- Tension can be harnessed to deliver optimal results. One of the overlooked but most critical benefits of engaging an outside 3rd party in CBO operations is that a natural tension is created between the teams as they identify mistakes or roadblocks created by the other side. Very simply, this can result in either negative or positive results. EqualizeRCM and Cimarron continuously communicated the joint goals and benefits of working together to ensure that any tension would be harnessed to benefit the hospital.
- Feedback loops must be in place and utilized. Cimarron’s patient accounting system is antiquated and required multiple workarounds that have been implemented and learned by the Cimarron team over the course of many years. The EqualizeRCM team jumped right in and started learning their system. Because of the expected learning curve, the Cimarron team had committed to performing Quality Assurance of EqualizeRCM and providing continuous feedback until the EqualizeRCM team could match and exceed their performance. Likewise, EqualizeRCM produces weekly “Classification Reports” that classify the root cause of all rejections, denials and AR worked in the prior week. These reports are used by the Cimarron teams to fine tune their front-end processes to eliminate issues and increase the clean claim percentage.
- Success requires the setting of aggressive goals with weekly and monthly reports. At the outset, EqualizeRCM set ambitious goals to reduce outstanding insurance AR by half and reduce the % of insurance AR > 90 days to less than 20%. The goals are purposely set to be meaningful, measureable and makeable. All team members knew the goals and EqualizeRCM publishes detailed weekly Key Performance Indicators and Monthly Operating Results to Cimarron and the entire team at EqualizeRCM for complete transparency in performance. As success started to build, Lee Hughes set an even more aggressive goal to cut Days In AR by half from 110 to 55.
RESULTS DELIVERED
The results have been dramatic. The outstanding insurance AR dropped by 62% and the % of insurance AR greater than 90 days reduced to as low as 12%–below the goal of 20%.
While the work is ongoing, the Cimarron Memorial Hospital is on a new path to prosperity with the people, partners and processes in place to better withstand the ongoing changes and challenges in rural healthcare.
ABOUT THE ORGANIZATIONS
Cimarron Memorial Hospital is a 25-bed Critical Access Hospital serving the medical needs of Boise City, Oklahoma residents and the surrounding areas. Services include Diagnostic Imaging, Dietary Services, Emergency Care, Pathology, PT & Rehabilitation, Rural Health Clinic, Endoscopy Services, Sleep Study Lab and Swing Bed Program. Learn more at www.CimarronMemorialHospital.org.
NewLight Healthcare is a hospital management and consulting firm based in Austin, Texas focused on serving the unique needs of rural and small community hospitals. NewLight offers a vast array of consulting services designed to improve the health of your hospital such as; financial services, online financial benchmarking tool, cultural transformation, marketing services, and more. Our professional team has extensive experience and is inspired to ensure the long term success of your hospital.
EqualizeRCM provides outsourced Revenue Cycle Services to community hospitals and large physician groups. EqualizeRCM’s services include outsourced CBO services as well as Early Out and Bad Debt Collections. The Company is headquartered in Austin, Texas and leverages its team of over five hundred RCM associates on behalf of customers in over sixteen states. Learn more at www.EqualizeRCM.com