Macon Community Hospital slashes A/R days from 57 to 37 with Cerner RCM
Macon Community Hospital in Lafayette, Tennessee, is a small, rural hospital. With a legacy revenue cycle management system, its accounts receivable days had risen and its collection rate of revenue had dropped.
The system performed the billing function, and while staff tried to work with the technology to make it work, the continued cash erosion made it critical to make a switch, said Scott Tongate, CFO at Macon Community Hospital.
The hospital decided to go with revenue cycle technology from Cerner. It started the conversion process in October 2019 with a go-live date of March 30, 2020.
Continuing implementation despite the pandemic
"Of course, a pandemic outbreak was not foreseen, but we were too far down the path to delay implementation," Tongate recalled. "When the COVID-19 pandemic landed in the U.S., hospital leaders' financial concerns increased. We canceled elective procedures and the hospital faced extra costs for testing supplies, personal protective equipment, and increased staffing to screen patients and visitors."
Underperformance of the legacy billing system was the problem. The legacy revenue cycle system dropped the hospital's collection rate about 14% from the previous collection rate.
"We had growth in volume and expense by 14%, but our overall collection amount remained static," Tongate explained. "With the revenue cycle technology solution offered by Cerner, we would be able to bill claims and collect on accounts ourselves without adding any additional staff."
"Our documentation is better than it was with the previous system. In addition, there is less rework of claims because we have the ability to bill claims ourselves."
Scott Tongate, Macon Community Hospital
There were travel concerns with the pandemic outbreak. Cerner offered the hospital the option to either wait for travel restrictions to ease or implement virtually. Macon Community felt waiting wasn't an option. And it had confidence that Cerner and the hospital's IT staff and department leaders would rise to the challenge of getting the revenue cycle system up and running and clinicians ready to use it.
Virtual training sessions
"We were bleeding cash and just couldn't sustain that another three to six months," Tongate said. "Some of the training to transition to Cerner had already been done in person, but additional training was still planned. Cerner made it easy to shift to virtual training sessions."
On March 31, 2020, the hospital implemented Cerner Revenue Cycle. Following implementation, staff saw positive trends in revenue cycle performance of A/R days and net balance.
"Staff saw some changes and improvements with the new cloud-based system," Tongate noted. "Our documentation is better than it was with the previous system. In addition, there is less rework of claims because we have the ability to bill claims ourselves. We have very well trained staff that are now able to perform their job functions without the impediment of a third party billing incorrectly.
"Had we not done that conversion then, we would be struggling," he continued. "I think with the lower volumes of patients during the beginning of the pandemic, it helped our clinicians get more comfortable with the process. We took more time teaching the clinicians how to document properly so the downstream effects work appropriately."
Within six months, the hospital's average A/R days decreased from 57.24 days on the legacy system to 36.79 days. At the same time, net payments were 3.55% higher compared with the legacy system. In addition, cash as a percent of revenue went from 29.78% to 35.39%.
"I cannot stress enough the importance of training and testing in advance of an implementation," Tongate concluded. "This is especially true when switching to a virtual environment."