Increasing revenue through A/R recovery, revenue-cycle redesign

After experiencing operating losses of more than $15 million and a growing number of days in accounts receivable and payment denials, Capital Health System implemented a multidisciplinary recovery program to redesign its revenue cycle. The system reorganized its business office staff, outsourced some collection activities, and stepped up its efforts to review coding, analyze billing errors and edits, update its charge description master, and track payment denials. Although this work is ongoing, during the initial revenue-cycle redesign, the system increased its cash flow by more than $30 million and increased patient-service revenue by 7 percent annually between January 1999 and July 2001. Capital has received more than $10 in new collected revenue for every dollar spent on accounts-receivable recovery and revenue enhancement.