From Surviving to Thriving: How We Helped a CAH Transform Their Financial Performance
Delivered $9.4M Boost in 15 Months for a Vital Critical Access Hospital
Challenge
A vital critical access hospital (CAH) is taking proactive steps to address declining financial performance. Like many CAHs, they recognized that grants and outside funding were covering up fundamental flaws in operating income. That's why their team approached Coker for expertise. We initially reviewed their financial management and performance to identify areas of opportunity for improvement. After a thorough analysis, we found significant opportunities and knew we could help transform their financial picture. We are committed to working closely with the CAH to achieve financial success and continue providing exceptional care to their community.
Solution
In just 15 months, we successfully delivered a financial boost of $9.4 million. Our role extended beyond the typical boundaries, acting as an adjunct CFO and covering a broad spectrum of areas. We dove deep into charge master redesign, honed in on cost reporting, and streamlined financial management. We also crafted self-funded benefit plans, provided mentorship, and sharpened vendor management practices.
We took a holistic approach to enhancing revenue cycle performance, focusing on minimizing denials, tightening AR management, improving patient intake procedures, boosting clean claim rates, and enhancing collections at the time of service.
Our negotiations with commercial payers were fruitful, leading to better contract terms. We also implemented consistent contract management reporting and developed efficient claim reconciliation processes.
On the billing front, we ventured into provider-based billing for outpatient clinics, always with an eye toward better provider alignment and exploring affiliation strategies. Our efforts created a robust framework for sustainable growth and efficiency.
Approach
- Step 1Conduct Financial and Operational Review
We initiated a comprehensive review of the CAH’s current financial and operational processes, including evaluating the chargemaster, cost reporting, and overall financial management systems. We compared these against industry standards and best practices to identify discrepancies and areas of underperformance. We pinpointed inefficiencies in revenue cycle management, including patient intake procedures, claim submission practices, and accounts receivable management. - Step 2Identify Opportunities and Recommend Solutions to Improve Financial Performance
Based on our initial review, we proposed targeted interventions such as redesigning the charge master to optimize billing, refining cost reporting for better accuracy, and overhauling financial management practices for greater efficiency. We also suggested improvements in the revenue cycle process, focusing on minimizing denials, improving clean claim rates, and enhancing collections at the point of service. We recommended pursuing more favorable terms in negotiations with commercial payers and enhancing contract management reporting. - Step 3Develop an Implementation Work Plan
We created a structured implementation plan outlining specific actions, timelines, and responsibilities to ensure the smooth execution of recommended strategies. This plan also detailed the allocation of consulting resources and the CAH’s internal teams to various tasks, ensuring adequate support and expertise were available for each initiative. We established key performance indicators (KPIs) to monitor progress and measure the effectiveness of implemented solutions. - Step 4Provide Interim Leadership (CFO) and a Team of Consulting Resources
We provided experienced financial leadership in the form of an adjunct CFO who spearheaded the financial turnaround efforts, working closely with the CAH’s executive team. A dedicated team of consulting experts was deployed to assist in various aspects of the implementation, from financial management to billing practices and vendor negotiations. Our team also focused on building capabilities within the CAH’s staff through mentorship and targeted training sessions to sustain long-term improvements. - Step 5Collaborate with CAH Teams to Implement Solutions and Manage Sustained Results
We worked hand-in-hand with the CAH’s teams across departments to implement the strategic initiatives, ensuring alignment and integration of processes. Regular review meetings were held to assess the impact of the changes and make necessary adjustments. This collaborative approach helped in fine-tuning strategies and maintaining momentum toward financial recovery. We strongly emphasized creating self-sustaining systems, such as self-funded benefit plans and efficient vendor management practices, to ensure the CAH’s ongoing success and independence in financial management.
Conclusion
Our engagement with the CAH has exemplified the transformative power of strategic financial management in stabilizing and enhancing the operations of critical access hospitals. Throughout our 15-month partnership, the CAH experienced a remarkable turnaround, culminating in a financial uplift of $9.4 million. This achievement reflected improved numbers and a testament to the CAH's renewed ability to serve its community more effectively and sustainably.
In conclusion, the CAH's success story reaffirms our commitment to providing tailored and impactful financial management solutions that empower healthcare organizations to thrive. We are proud to have partnered with the CAH and look forward to witnessing their continued progress and success in delivering exceptional care to the communities they serve.
CAH renews ability to serve its community more effectively and sustainably.
Results At a Glance
- 17%Reduced denial rate reduced from 35% to 17%
- 82%Clean claim rate increased from 68%
- 450%Increase to the monthly time of service collections
- 30%Improved commercial payer reimbursement
- $9.4MFinancial boost in 15 months
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