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9 key questions to ask when managing AR during an IT transition
Healthcare organizations face increasing pressure to adjust to new incentives and business drivers, such as reducing costs and engaging patients. Providers are becoming increasingly reliant on their IT systems to support their efforts, but many times, the systems that are in place can’t get the job done, contends Hayes Management Consulting in a recent article. AR drives an organization’s cash flow and must be managed carefully during a system conversion.

Changing to new practice management systems creates a variety of problems, particularly in the financial arena. Hayes recommends asking specific questions to determine the impact on accounts receivable.
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To transfer AR or not?
The first decision is whether an organization should transfer its AR into a new system or to continue to manage it in the old system until it’s “worked down.” Many healthcare organizations going through a practice management or billing system transition decide not to migrate their accounts receivable from the legacy system into the new system. Most system vendors recommend keeping AR clean in the new system, since reconciling two systems can be complex and messy, Hayes says.
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Can I identify all my AR?
Making sure all receivables are accounted for are the first step in the transition process, Hayes says. Anything that’s been posted and recognized in the system is readily visible through normal reports–a tougher task is finding an managing missing or unbilled revenue. Hayes contends that significant unrecognized revenue can be tied up in unbilled, non-adjudicated revenue, and rejections and appeals.
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How much of my AR can I expect to collect?
Performing a collectibility analysis will help decide what resources to devote to the collection effort. Organizations should start by establishing an aging cutoff, Hayes suggests. Industry standards suggest that 90 percent of accounts that are less than 60 days old can usually be collected, but that percentage goes down as time goes on. Establishing a cutoff enables an organization to determine when writing off older receivables is more cost-effective than trying to collect them, and stalling the complete conversion.
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Should I try to collect everything on my own?
Hayes says the staffing plan for a legacy system work down is often a moving target, so an organization might benefit by assigning a project manager to handle staffing resource allocation. Whether outsourcing or using internal resources, an internal project lead is required to work with both the internal and outsourced teams.
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How much staff do we need?
Staffing for a legacy system work down is often difficult to determine, and a project managercan help handle staffing resource allocation. The greater the portion of the project to be handled internally, the more critical it is to have someone specifically in charge of staffing, Hayes contends. It's important to answer questions from outsourced staff daily so that questions do not build up and create an even older receivable that's more difficult to collect.
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How will the wind down affect my team?
Ultimately, AR reps will be most affected by a work down project. The new system won’t generate receivables for them to manage for 30 to 45 days from go-live. In the short term, there’s no need to reassign staff to the new system. Hayes recommends evaluating the work files after a month or so to determine the resources you will need to transfer.

Others that will be impacted by a switch include payment posters, who will deal with bills from both the old and new systems, often intermingled; cash control reps, who will be challenged to manage changes in bill payments resulting from the transition; and customer service reps, who will interact with customers who may be receiving bills from the new system that may look quite a bit different from what they’re used to.
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How do I minimize patient confusion?
Make patients aware of the changes well in advance by making them aware of what the new bill will look like well in advance of the transition. Providers should plan to work months ahead of any transition to education consumers about the change–it will probably take the use of multiple forms of communication to get the message out, Hayes advises.
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How long must I keep legacy data?
Providers should have a clear understanding of regulatory requirements and internal organizational mandates for record retention. Traditionally, data must be kept for seven years, but some organizations extend retention to 10 years or longer. Clarify your own requirements and level of detail that must be converted well before the go-live date, Hayes suggests.
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How do I handle archiving and storage?
Some organizations choose to manage data internally, but supporting an internal option requires significant resources in people, hardware and software. Many organizations use an outsource partner–they’ll need policies and procedures for the retrieval or archived patient account information.