Lessons from the field: How CommerceHealthcare® aligns revenue cycle and finance teams

Misalignment between the revenue cycle and finance teams can lead to inefficient processes that are costly for healthcare systems. This problem is often exacerbated when organizations engage in mergers and acquisitions. Innovations such as patient financing options, lockbox consolidation, full automation of accounts payable and automated patient refund processes can help.


At Becker's 5th Annual Health IT + Revenue Cycle Conference in Chicago, CommerceHealthcare® sponsored an executive roundtable to explore different solutions for synchronizing the revenue cycle and finance functions. Leaders from CommerceHealthcare® discussed how alignment can generate valuable efficiencies and help organizations scale for growth.

Case study: Streamlining revenue cycle processes at a nonprofit health system

CommerceHealthcare® recently worked with a nonprofit health system that was acquiring and integrating a significant number of organizations into its corporate structure. The system had over 30 lockboxes and each time they added a hospital to their system, the number of lockboxes grew. The cash team had over 50 members doing payment posting. Significant pain points included:

  • Different payment methods had different costs. Patients and insurance plans pay in a variety of ways, ranging from checks to coupons, online bill payments, merchant services over the phone and more. Each of these payment methods has a different cost for organizations. Credit cards have merchant fees. Checks generate banking and processing fees. If healthcare systems can bundle electronic funds transfers (EFTs), they can get 2 to 3 percent savings. Amy Rinard, CPC, vice president of specialty healthcare payments, noted, "Getting an EFT without the associated revolving fees is what we call the happiest payment."
  • Navigating multiple lockboxes and payer websites hindered cash posting. When organizations do their payment enrollment first, the remittance data is sent elsewhere. This resulted in time-intensive scavenger hunts for employees handling payment posting. The cash team had to navigate over 30 different lockboxes and 15 payer websites to find remittance data, which made it difficult to get funds posted within a day.
  • Access rights to online portals resulted in unposted remittances. Not everyone had access rights to log into some online portals. When employees couldn't find information or figure out where a remit was, they left them unposted. The number of user portals needed to be reduced.
  • Paper-based processes led to errors. The organization tried to scan paper documents into their image repository and reroute them to the right party. It adopted a "skinny 835 process," in which optical character recognition data was classified into the right categories and sent to the EMR. This wasn't a perfect process, however. The organization still had several employees in the mail room dealing with paper.

CommerceHealthcare® found the healthcare system had nearly $1 million of expenses embedded annually in their payments. A primary goal was to move to more efficient payments, which would increase cash flow and enable the accounting and revenue cycle teams to gain alignment around reconciliation.

Credit card and check payment options for insurance plans were essentially turned off. Check payments decreased to less than 10 percent. EFTs became the organization's preferred payment method. Ms. Rinard offered one caveat related to EFTs: "When you move to EFTs, do them directly with your insurance payers or one by one with your insurance payer processor. If you do group enrollments, you will get a ton of fees. Educate end users so they don't accidentally sign you up for those."

CommerceHealthcare® sat down with the cash posting and accounting teams and found a huge disparity in how they defined reconciliation. According to Ms. Rinard, "If you don't do pre-reconciliation in the revenue cycle, you have cash posting and general ledger posting, and you hold onto partner payments. This means the reconciliation will always be partial." The teams reached agreement on a common definition, which enabled them to align their strategies.

To further streamline the organization's financial operations, CommerceHealthcare® is working to help the team make several other changes:

  • The number of lockboxes was reduced from 34 to 10. There is now one lockbox for each tax ID. The reduction in lockboxes, in combination with decreased paper remittances, reduced bank fees by $30,000 per month.
  • Enrollment was outsourced.
  • A centralized portal was implemented so partners can log in with appropriate access and retrieve their information.
  • A splitting technology was deployed for electronic remittance advices (ERAs). To simplify reconciliation, payments are reconciled to the bank first and then split among multiple systems. Ms. Werner cautioned, "If you split the ERA file and then try to reconcile, there will be three pieces to reconcile back to the payment, which is extremely hard."

The results have been impressive. The organization, post phase 1, will recognize a $25 million one-time cash lift from shifting check payments to EFTs. Accounting has the option to invest these funds or use them to offset technology fees. Now when the health system makes a new acquisition, it follows a consistent process in Epic to deal with tax IDs, lockboxes and account structures. The organization is able to reallocate 10 to 15 human resources.

Now that the first phase of streamlining is complete, CommerceHealthcare® and the organization have started to explore what other improvements can be made. The health system is looking for a partner to serve as its clearinghouse, as well as patient finance options that integrate with Epic and online bill payments. Another area of interest is automating workflow exceptions, which are currently a manual process.

Best practices for aligning the revenue cycle and finance

Based on CommerceHealthcare's experience, Amy Rinard, CPC, vice president, specialty healthcare payments manager, and Ms. Werner offered four lessons learned that could benefit other healthcare systems:

  1. Take a close look at lockboxes after acquisitions. In the healthcare industry, many organizations want to minimize disruption after an acquisition. To keep employees happy, they often don’t change the structure of lockboxes. Unfortunately, this creates extra work. Each remit results in multiple general ledger entries.
  1. Ask tough questions about business practices and systems. Why do you have systems configured in a particular way? What should they be like? How should acquisitions be onboarded? Should acquired organizations keep their legacy systems? What structure will enable processes to flow in consistent ways? Ms. Werner commented, "If you're one organization, you need to act like one organization. When we reconcile and deposit like one organization, then the revenue cycle flow is much smoother."
  1. Shift to ERAs whenever possible. Many organizations use an EOB conversion, which is a lockbox function that lifts data from paper documents and sends it into an information system. These posting files always have inaccuracies, even when backfilled with clean data. It is possible to get to around 98 percent electronic EOB documents with ERA connections. Almost every payer offers an ERA. Find a good partner that can help you maintain enrollments and understands how to do them.
  1. Recognize the importance of ongoing surveillance. As new patients come in the door and health plans come on the market, they usually default to paper. Organizations must constantly monitor this and convert patients and payers to electronic payments.


Revenue cycle and finance teams are essential functions in healthcare organizations. Without the processes of these functions, healthcare systems couldn't keep their doors open and deliver patient care. When revenue cycle and finance aren't aligned, however, operational efficiency simply isn't possible.

Addressing this issue can result in significant cost savings, increased cash flow and smoother revenue cycle management overall. As Ms. Rinard commented, "The key is to find incentives and alignments that help with reconciliation and get everyone working toward common goals. We spend a lot of time on that."

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