Client Overview

The client is a 300-bed community hospital with approximately $450M in annual net patient revenue, serving a mixed urban and suburban population. The hospital processes an average of 22,000 inpatient discharges and 180,000 outpatient encounters annually, supported by a lean internal revenue cycle team.

The payer mix is weighted toward commercial and Medicare, with Medicaid representing a meaningful portion of volume, introducing variability in authorization, medical necessity, and reimbursement timelines.

Financial Context

At the time of engagement:

AR days exceeded 60, with a growing concentration in the 31–90 day buckets
DNFB levels were trending upward, particularly for inpatient encounters
Preventable denials were contributing to delayed collections and rework
Liquidity and cash predictability were active board-level concerns

The Hospital had to improve working capital performance without increasing staffing levels or creating downstream compliance risk.

Challenges

Slowing Cash Conversion

Despite stable volumes, cash realization lagged behind service delivery. AR days continued to rise, limiting financial flexibility and increasing pressure on short-term cash management.

Preventable Denials and Rework

Authorization and medical necessity denials, particularly across key commercial payers, consumed significant staff time and delayed payment, despite being largely avoidable.

Elevated DNFB

Inpatient DNFB remained high due to documentation gaps and coding throughput constraints, pushing high-value claims further out in the revenue cycle.

Limited Payer-Level Visibility

Leadership lacked a clear, payer-specific view of denial drivers and cash delays, making targeted intervention difficult.

AnnexMed Solution:

Phase 1: Financial Baseline & Diagnostic (Weeks 0–2)

A rapid assessment established a defensible baseline across:

AR aging by payer and service line
Denial rates and preventability
DNFB drivers by encounter type
Cash realization timelines

This phase aligned leadership on where cash was being delayed and why.

Phase 2: Targeted Cash Acceleration & Denial Prevention (Weeks 3–6)

Based on diagnostic findings, focused interventions were implemented:

Payer-specific denial prevention rules for high-frequency denial categories
Pre-bill edits aligned to authorization and medical necessity requirements
Standardized workflows for repeat denial scenarios
DNFB prioritization based on financial impact

These actions reduced downstream rework and improved clean claim submission.

Phase 3: Scale, Governance & Visibility (Weeks 7–12)

To sustain gains and provide executive confidence:

Weekly dashboards tied operational performance to cash outcomes
Denial trends tracked by payer and root cause
Ongoing monitoring of AR aging and DNFB

Hospital CFO Perspective
“I appreciate the phased approach. It has given us early wins, but more importantly, supported us with control and predictability.”

Outcomes

Financial Impact (Within 90 Days)

AR Days: Reduced by 11 days
Preventable Denials: Reduced by 32%
Cash Collected Within 30 Days: Increased from 54% to 67%
DNFB Days: Reduced by 6 days
Net Cash Accelerated: $18.4M

Write-offs remained stable, confirming that gains came from cash acceleration and leakage prevention, not pricing concessions.

Executive Confidence & Sustainability

Improved visibility into payer performance
Reduced operational friction across billing and coding teams
Governance framework established to sustain results

Ready to Get Started?

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