A critical component of legacy system retirement is how outstanding Accounts Receivables (A/R) are handled. Hospitals and other healthcare organizations must weigh collection of outstanding A/R reconciliation when replacing legacy systems. Important components of success include: providing a cost-effective alternative to working post-sunset A/R with limited disruption to staff, users, and patients, ensuring cash collections remain at or exceed current performance, allowing revenue cycle leadership to focus on successful implementation and training of the new system, and expediting the legacy system retirement.
Break-even and ROI must be assessed when deciding on the timing and approach for legacy patient accounting (PA) retirement, which is not dissimilar to weighing the benefits of keeping a legacy clinical system running versus archiving with an on-premise solution (where the ROI is likely unjustified) or with a cloud-based solution (which can deliver significant ROI). There are several considerations in determining how long the PA system should be kept running, namely, the ability to collect, value of liquidating old A/R, as well as the cost of properly collecting all old A/R. Other factors include insurance take-backs, claim denials and reprocessing, and legal disputes.
Contrary to common perception, in most cases, an active archival system is unnecessary to achieve successful resolution of the outstanding A/R portfolio. Alternatives, such as maintaining the legacy system for a period while collecting outstanding balances or selling off debt to collection agencies can prove to be more cost effective.
More often than not, A/R reconciliation in tandem with maintaining the legacy system provides the most cost-effective solution to legacy patient accounting system retirement. Preparing A/R for conversion with the right acceleration/liquidation strategy up front will help protect cash flow and avoid financial catastrophe. Hospital executives are turning to experienced partners to provide an A/R reconciliation and data archival solution to save costs and ensure record retention and compliance.
Download the free whitepaper, where we delve into legacy system retirement ROI, evaluation of the different approaches to legacy RCM A/R reconciliation and payment reconciliation best practices.