Case Study

Recovering $140 Million for Diagnostics Leader



Today’s healthcare stakeholders—from hospitals, DME manufacturers, and laboratory services providers to caregivers in every setting—are increasingly turning to business process outsourcers (BPOs) to help control the cost curve while bringing process, negotiating, and customer care expertise inherent to collections success. A healthcare diagnostic company was facing challenges of high days sales outstanding (DSO) and excessive bad debt write-offs. The company approached HGS to regain financial health with acceleration of cash collections and receivables and debt write-offs reduction, to help recover the cash required to grow and compete in a competitive marketplace.


From day one, HGS delivered enhanced collections, starting with resolution of insurance accounts receivable (A/R) aged greater than 180 days. As the partnership continued to expand, 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.

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.

HGS has a nimble approach to our business requirements, as well as a robust knowledge base that comprises system expertise and capabilities to create an Oracle database and stellar tracking and reporting. Additionally, HGS leveraged our clinical and rightshoring partnership strengths, with 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.

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.

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