As a joint venture for-profit laboratory, Virginia-based Piedmont Medical Laboratory (PML) saw the handwriting on the wall early in the decade. Formed in 1991 by Virginia's Valley Health, the full-service clinical lab's growth was hampered by a manual billing/AR system and lack of electronic connectivity to its clients. By the mid decade, PML had tackled the connectivity dilemma, but the billing challenges had yet to be fully addressed. "The legacy billing/AR system was all manual operation and tracking in terms of bad debt, days outstanding etc. with few third party payer interfaces, so we had definite concerns about maximized collections, remittances and adequate reporting," said PML CEO Joe Skrisson.
Before Skrisson's arrival in 2004, PML had seen some serious challenges to the billing system's operation that had slowed bill payments for several months. While this was ultimately resolved, the board of directors still harbored major concerns. Once the client connectivity issues were resolved, Skrisson began scrutinizing the continuing challenges to the billing/AR system. "We could not get reports that dealt with medical necessity concerns, rejections and other critical areas that would ensure compliance and increase cash flow," said Skrisson. That prompted us to look for a more automated solution."
PML began a review of billing/AR marketplace offerings and found many solutions that seemed outdated. Others were more forward thinking in terms of technology but provided no verifiable results of collection increases and better compliance. In addition to these attributes, Skrisson felt it very important to find a vendor with a culture of proven knowledge and results in billing/AR.
After reviewing several completely outsourced approaches, PML selected the XIFIN system that blended outsourced functionality and in-house internal control. "XIFIN's Web-based solution provided instantaneous updates, decision support, comprehensive reporting and other important automation functionality," said Skrisson.
PML had been fortunate to find a CFO who also had the experience in billing and collections to be in charge of billing operations. "She had intimate knowledge of everything from monthly financial reports and workstation operations down to the minutia of the billing operation," said Skrisson. This allowed her to work closely with our billing supervisor, thereby minimizing the number of people involved in the evaluation and implementation process."
The CFO's broad billing/AR experience made her the ideal choice for project manager. This allowed Skrisson to concentrate on marketing and sales aspects of the business. Although the XIFIN system provided detailed daily, weekly and monthly reports, Skrisson concentrated on cash recovery reporting while the CFO received and monitored the reports detailing accounts payer mix and line item revenue.
By late 2007, PML was experiencing a 10 percent increase in cash recovery and a significant drop in AR days outstanding that exceeded XIFIN's estimates. The results and the ongoing reporting functionality allowed PML to look forward from a position of stability and growth. "The reports broke things out very conveniently by client and payer, which allows you to analyze what marketing/sales told you the account was going to generate verses what it actually produced," said Skrisson. "This gave us the ability to look at our client portfolio and identify those clients that needed improvements."