Case Study

Employing Process, Automation, and Clinical Expertise to Recover $140 Million for Diagnostics Leader

Industries
Healthcare
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Objective

Today’s healthcare stakeholders—from hospitals, DME manufacturers, and laboratory services providers to caregivers in every setting—are increasingly turning to business process outsourcer (BPO) expertise to help control the cost curve while meeting capacity and quality demands. In 2003, a healthcare diagnostics company faced challenges of high days sales outstanding (DSO) and excessive bad debt write offs. HGS was engaged to accelerate cash collections and bring down receivables and excessive bad debt write-offs, starting with resolution of insurance accounts receivable (A/R) aged greater than 180 days.

The partnership continued to expand, and by 2007, the client trusted HGS with expanded responsibilities, including A/R resolution of accounts aged greater than 120 days, with staffing increased to a team of 100 FTEs. In 2014, as the client moved into high-end genetic testing requiring clinical expertise and support, HGS was asked to provide specialized clinical expertise and prior authorization services support. HGS has added RNs to the client-HGS team to increase our services scope, as we support this partner’s quest to become a global life sciences and diagnostic leader. HGS’s rightshoring approach for this client includes coordination of work by a core team of professionals, dedicated teams in two HGS sites in India, and a Manila location for a team of RNs and customer service talent. Today HGS employs automation, clinical, and process improvement expertise to drive breakthrough efficiencies for this client partner.

In 2015 as the industry made a shift to ICD10, the client sought our support for expansion into medical coding and other claim edit support, as well as for payer and physician NPI. This team started with 25 coders based out of Hyderabad and since then, this service line has expanded to 100 FTEs operating out of our Hyderabad and Bangalore sites.

 

Over the nearly 15-year partnership, HGS has driven more than $140 million in cost containment as a result of a winning portfolio of solutions including cash acceleration, A/R resolution, workflow innovation, and reporting and analytics.

 

Our Solution

  1. Cash Recovery 

How We Do It

Since the client’s key objectives were to reduce Days in A/R and decrease insurance bad debt, HGS focused first on the commercial insurance accounts aged greater than 180 days from discharge. The client’s key objectives were for us to support achieving their most impactful metrics: DSO decreased to less than 50 days and bad debt reduction.

 Business Result

For the first two years of the partnership, HGS showed 20% improvement in cash over the historical baseline. Over the course of our partnership, our performance on insurance bad debt recovery compounded results, with dramatic recoveries and bad debt reduced from 6.8% to now 1.5%. HGS employed well-trained account reps, clearly defined best practices, and best-in-class workflow tools and technology to significantly reduce DSO. HGS’s more efficient operating model released much-needed working capital for the client. Overall, HGS has made a substantial improvement to the client’s bottom line—for more than $140 million in cash recovery over the course of our partnership.

 

 

  1. Cost Containment

 

How We Do It

When the client partner lost a high-volume contract, HGS came forward with the support that enabled optimal patient engagement at market-competitive prices. The process increased the clerical load, and HGS provided a team of 30 trained reps to help satisfy the client’s customers’ needs. As a trusted resource, we successfully staffed a response team, with an intelligent automation plan to build in efficiencies over time. Our client, their customers, and the patients they served continued at their previous levels of engagement and satisfaction.

 

 

       Business Result

HGS’s fast ramp was followed by a cocreative automation strategy to drive down costs for the client, while simultaneously retaining and engaging their targeted patient demographic. Over time, the client wanted us to reduce the initial 30 team members to less than 10, a 67% reduction. However, we were able to automate using HIPAA transaction sets 270/271 and reduce staff to five FTEs over a period of three months. This has resulted in almost $1 million in savings annually to the client.

 

 

  1. New Business Line Launch

 

 

        How We Do It

In 2014, the client expanded from routine diagnostic testing to high-end genetic testing, starting with the launch of certain cancer screenings and pre-natal tests. However, these expensive tests needed prior authorization from insurance companies. Our client had no experience managing the prior authorization process, so we stepped in to provide valuable leadership, talent, and process innovation. HGS built a team of RNs, based in the Philippines, to initiate this support work and provided the essential market entry into this business with positive impact on profitability. HGS recruits, trains, and supports these RNs with HGS’s standard focus on excellence in delivery. This service line has grown more successful with additions to the type and number of tests requiring this high-level medical and financial screening. HGS developed a core strategic strength for our client partner, as we helped build this business line from the ground up.

 

 

        Business Result

In just three years, HGS helped grow this partner’s genetic testing business line from inception to over $100 million per year in revenue. HGS delivers record levels in CSAT measurement, and our commitment to the highest service levels, ongoing support, and management reporting offers valuable next steps as we see the relationship thriving into the next decade.

 

 

 

      Looking Ahead

The future is bright for this partnership, as HGS continues to deliver high performance with an eye to ever-improving KPIs and greater goals. With a consultative focus, HGS incubates innovation and process improvements, offering over 3,000 insights to the client, resulting in annual savings of over $5 million in labor costs, and regular delivery of services that result in a strong profit margin for our client.