Case Study #4Problem analysis and strategic solutions, Computer technologies and infrastructureSituationA health center running the dental software that BTree specializes in needed a special billing module. While most of the activity on individual patient accounts was paid for by the state, some elective restorations needed to be invoiced directly to the patients. It was not clear how much of the Accounts Receivable was attributable to the elective services and how much of it was still owed by various state programs or private insurance. The information system did create an insurance claim for some but not all of the state programs. This made it a challenge to determine which charges were owed by one of the state programs and which were indeed elective services owed by a patient. Since the system was not double entry, payments and credits are not applied directly each specific charge so it was not be clear what each credit or payment was meant to pay off. This information was necessary in order to accurately group the Accounts Receivables into its various components. HindranceIt always had been done in a way that was manual. Sorting through 2 Millions dollars of accounts receivable overwhelmed the staff and they were behind. They needed an immediate analysis of the problem and a very quick solution for reducing the Accounts Receivable. ActionsBTree had a programmer write a script program to attribute patient charges to particular payments and credits. This helped determine what had been paid and what was still outstanding. Then the program determined the category of each outstanding charge. We determined for each charge if it was to be paid by one of four different state programs or by private insurance or by a particular patient directly. Finally, each outstanding charge was put in an aging category. An aging report was created with all of this information and it showed conclusively that the two of the four state programs owed the bulk of the Accounts Receivable. ResultsThe patients were billed for their elective services and the state programs were re-billed for the services that were still outstanding. The health center collected or appropriated at least $300,000 of its Accounts Receivable to these state programs. EvaluationAn investment in automation is expensive and some managers still prefer manual systems. Properly tuned technology is critical to efficiency. It can also be less expensive than manual processing when that manual processing is subject to a high error rate and when there is not enough staff to do the manual processing. |
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