Improving credit balance management with automation

By Jamshid Ebadi, Alex Boone, and Chad Oakley
| 12/1/2020
Improving credit balance management with automation

Rapid industry changes and economic stressors brought about by the COVID-19 pandemic have left healthcare provider organizations seeking ways to streamline operations and increase efficiencies. Applying automation within the healthcare revenue cycle is one path to achieving these goals. The repetitive and consistent nature of managing credit balance processes can make this an ideal place to start.

Why credit balances?

Credit balances are ubiquitous in hospitals’ patient accounting systems. A typical revenue cycle employee at a medium-size hospital takes approximately 15 minutes to resolve a single credit balance account.1 With organizations needing to resolve thousands of credit balance accounts each month, the result can be countless staff hours devoted to researching, pulling data, and reviewing accuracy of accounts. This is often on top of employees’ normal day-to-day workloads and can easily be addressed in more efficient ways. Incorporating automation into credit balance management can help revenue cycle teams resolve large quantities of credit balance accounts in less time, freeing up the workforce to work on resolving the more complicated accounts that have a greater level of uncertainty and ambiguity.

By not resolving credit balances in a timely fashion, organizations leave themselves vulnerable to several risks, including missed revenue (credit balance accounts might hide funds that could be collected from secondary, tertiary, or self-pay payers) and misstated revenue on financial statements.

In addition, organizations could be subject to financial penalties resulting from noncompliance with regulatory requirements, or even legal action. Organizations also could increase their risk of being subject to third-party audits, such as costly multistate unclaimed property examinations. Automation can help revenue cycle departments resolve credit balances faster and potentially mitigate these and other risks.

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Where automation can help

The credit balance area of the revenue cycle presents numerous opportunities for organizations to incorporate automation. Some examples include:

Replacing legacy systems. Often, when health systems move to a new patient accounting system (PAS), credit balances that need to be resolved remain in the legacy system. Automation can reduce the amount of manual work required to resolve existing credits in the legacy system and can enable the deployment of the current workforce to work full time in the new PAS or on other, more pressing business needs.

Accelerating cash collections. A one-at-a-time approach to working credit or debit balances can result in dollars that are slow to come into the organization or even cash being sent out that shouldn’t be. Automation can help streamline the resolution of these accounts, resulting in faster cash collections and fewer misallocated disbursements.

Improving analytic capability. A key step on the journey to incorporating automation into the revenue cycle is determining which business processes are most successful, standardizing those best practices, and applying automation to them. When an organization knows it has automated its best practices, it in turn is able to better trust its own analytic reporting, which can result in higher overall reliability and more consistent results moving forward.

Start the automation journey

Successful implementation of automation starts with staff buy-in. It’s important for staff members to know exactly how incorporating automation will affect them and their day-to-day jobs. Healthcare leaders should communicate transparently with staff and seek their input on automation initiatives, including showing staff members what automation will look like and involving them in testing automation protocols.

In challenging times, healthcare provider organizations are looking for more areas to improve efficiencies. Automation can help drive success within the revenue cycle, the entire business office, and the organization overall. The credit balance area presents an array of opportunities for automation and is therefore a great area to jump-start automation in the revenue cycle.

For help getting started with incorporating automation, leaders can consider engaging with third-party specialists to determine a path forward to more streamlined, efficient, and automated credit balance management workflows.

1. According to data from Crowe client engagements. 

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Jamshid Ebadi
Principal
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Alex Boone
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Chad Oakley