Cash Reconciliation and Work Flow Case Study€¦ · Outcomes and Learnings Proprietary &...

Cash Reconciliation and Work Flow Case StudyColburn Hill Group

Proprietary & Confidential 1

Agenda

• Reconciliation Project• Reconciliation Barriers and Solutions• CAMS Implementation• Learnings and Outcomes


Reconciliation Project: Situation• At a $500m community hospital in the Midwest, Revenue Cycle and Finance

teams historically had difficulty reconciling bank account deposits within the various patient account and general ledger systems

• Under the legacy process, staff attempted to maintain 23 different spreadsheets covering 5 facilities and 3 Medical Groups with 9 different bank accounts

• The recent transition to Athena for pro fee billing added to the complexity of the reconciliation process

• Transition also shed light on the scale of compliance and audit risk under that manual process

• Due to the Athena transition and provider based billing, payments and remittances are more likely to contain payments from a variety of patient accounting systems, adding complexity to reconciliation of the deposit, in addition to a significant amount of time lag between the date of deposit and cash posting to relieve the account receivable (A/R)


Reconciliation Project: Goals

• Colburn Hill Group (CHG) was engaged to reconcile cash back to Athena implementation (12 months earlier) as well as ongoing reconciliation

• Project scope included documenting current processes, as well as making process improvements and implementing technology solution

• The project led to a number of process changes and implementation of CHG’s Cash Application Management Solution (CAMS)


Process MappingPayment Paths

✓ Bank Deposits✓ Hard Copy Checks✓ Insurance Credit Cards✓ Patient Credit Cards✓ Point of Service Cash and Checks✓ Checkless BCBS ✓ Cashier payments✓ Incentive and program payments✓ Meaningful Use

Athena Work ✓ Unpostables✓ Confirming Deposits✓ Correspondence✓ Adjustment Requests✓ Associating Deposits

Legacy Work✓ Credit balances


The project started by mapping each process involved with collecting and posting payments

Barriers to Reconciliation


1. Historic Bank Transactions• PNC bank transactions were not easily accessible• US bank transactions only go back 45 days in web portal• US bank transactions in Athena do not tie to bank statements

2. Reconciliation Excel Files• Only concerned with professional deposits, no one responsible for all bank transactions• Missing professional deposits in excel tracking• Unstructured data and missing verification of posting in patient accounting systems

3. Time of Service Payments• Cash and Checks combined in Athena to create deposit amount• Main site cashiers separate cash and checks for individual deposits breaking the matching

deposit amount in Athena, leaving staff without the ability to reconcile

The project identified 3 significant barriers to reconciliation

Barrier 1. Historic Reconciliation Work Plan

1. Define bank account scope - What accounts will be reconciled?2. Define historic look back - Where is the “line in the sand”?3. Identify and assign staffing/resource needs4. Document processes and cash paths5. Selection of non-excel reconciliation tool (CAMS)6. Bank Transactions

• Load historic banks transactions back to line in the sand date• Define go forward daily bank transaction load

7. Reconciliation• Auto Reconciliation• Manual – identification of process break downs


Barrier 2. Time of Service (TOS) Payments

• Early in the process mapping sessions we identified that Athena “deposits” for time of service payments from patients do not have a 1 to 1 match in the bank, with no path for reconciliation

• Shadowing multiple clinics and meeting with the main site cashiers, we developed a plan to solve reconciliation break downs going forward

• The main change impacted the cashiers, as the new TOS process only added bank deposit slips to the existing policy


Barrier 3. Excel File Data Structure


Process mapping also highlighted the enormous task of reconciling by excel sheet

US Bank – 3 Bank Accounts3 excel files per month X 14 months = 42 excel files

42 excel files X 32 sheets = 1,344 sheets

Old PNC – 6 Bank Accounts6 excel files per month X 14 months = 84 excel files


New PNC – 6 Bank Accounts20 payer files per month X 6 bank accounts X 14 months = 1680 excel files


Reconciliation Solutions


1. Historic Bank Transactions• PNC bank transactions were not easily accessible• US bank transactions only go back 45 days in web portal• US bank transactions in Athena do not tie to bank statements

Solution: updated PNC access and defined a US bank statement-to-transaction comparison

2. Reconciliation Excel Files• Only concerned with professional deposits, no one responsible for all bank transactions• Missing professional deposits in excel tracking• Unstructured data and missing verification of posting in patient accounting systems

Solution: historic data load in CAMS for source of truth and ability to search data

3. Time of Service Payments• Cash and Checks combined in Athena to create deposit amount• Main site cashiers separate cash and checks for individual deposits breaking the matching

deposit amount in Athena, leaving staff without the ability to reconcile

Solution: completion of deposit slips at each department with cashiers logging data in CAMS

Cash Application Management Solution

(CAMS)


CHG’s Cash Application Management Solution

Proprietary & Confidential

CAMS is a user-authenticated web portal, which provides an ‘at-a-glance dashboard’ to display pendingor completed batches of transactions, to quantify posting backlogs, and to automate cash reconciliationon a daily basis. The software’s simple interface with your treasury function ensures that the cash yousee in your billing system is the same as that you see in your bank accounts.

CAMS Data Structure

Deposit4/1/2016 5,000.00


Payments3/26/2016 2,500.00

4/1/2016 2,500.00

Batches4/8/2016 MPAC $2,500.00

4/8/2016 Athena $2,000.00

4/8/2016 Vision $500.00

1. Data should be stored in a relational database, not separate excel workbooks

2. All deposits, regardless of bank and location should be collected and tracked with this data model

Ticket/Deposit

Outcomes and Learnings


Project Milestones


Project Milestone StatusInterviews and process mappingRecommend backlog reconciliation process (CAMS)Identify and load historical bank transactionsCreate daily ongoing best practice for bank depositsImplement Time of Service ChangesReconcile backlog

CAMS Auto ReconciliationThe CAMS auto matching engine successfully auto reconciled 70% of deposits, this includes the backlog of historical deposits in addition to deposits going forward. This is equal to 5 full time employees worth of time.


Deposits

Patient Accounting System Financial Transactions

CAMS Matching

Engine

User data

70

30

0%

20%

40%

60%

80%

100%

Deposits

Auto Reconciliation Results

Auto Reconciled Manual Review

As process improvements mature, auto-reconciliation rate expected to climb to 85%-90%

Learnings from Project1. Documenting process and cash paths

2. Define bank account scope

3. Eliminate deposit tracking in excel workbooks, track by deposit

4. Implementation of CAMS application to replace excel

5. Process Changesa. Change Time of Service Deposit Processb. Build communication with Finance for non-patient accounting system

transactions, examples: meaningful use, EHR incentives, etc.

6. Create centralized cash tracking and reconciliation group

7. Implement OCR and Remit Splitting

8. Athena should start forcing deposit location and bank when creating deposit batch IDs

9. Athena should stop rolling multiple bank deposits into deposit batch IDs


Conclusions• Client had a complex environment, where various entities

and payment streams made it difficult to accurately reconcile

• Process mapping uncovered specific challenges and problems that required a combination of process changes and technology to resolve

• Client replaced thousands of spreadsheets that were not fully reconciling with CAMS, which created a source of truth, automated much of the process, and provided analytics and reporting

• CAMS allowed client to reconcile historic cash, create a process for ongoing reconciliation needs, and reduce labor costs to complete accurate, comprehensive, and reliable reconciliation.


Results, Not Reports.For more insights on this Case Study and assessing

your Cash Reconciliation and Work Flow, please contact us:

www.colburnhill.com/contact.html

or

by e-mailing [email protected]

We look forward to hearing from you!

19- Proprietary and Confidential -

Cash Reconciliation and Work Flow Case Study€¦ · Outcomes and Learnings Proprietary &...

Documents

Transcript of Cash Reconciliation and Work Flow Case Study€¦ · Outcomes and Learnings Proprietary &...