Chicago-based CommonSpirit Health is weeks away from completing its exit from revenue cycle vendor Conifer Health Solutions.
CommonSpirit Senior Executive Vice President and CFO Michael Browning said on an Oct. 2 investor call that the system’s Central and Pacific Northwest regions completed their revenue cycle conversions Aug. 28, and the South region is scheduled to follow Oct. 30. More than 1,900 employees have been rebadged from Conifer to CommonSpirit, a transition that was completed Aug. 3.
In February, Dallas-based Tenet Healthcare announced it would regain full control of Conifer. Under the agreement, CommonSpirit will pay about $1.9 billion to Tenet over the next three years, while Conifer will pay CommonSpirit roughly $540 million to redeem its 23.8% equity stake.
“Insourcing our revenue cycle stands to optimize the patient experience just as much as it will improve the cost to collect,” Mr. Browning said.
CommonSpirit executives said on the call that the system has not been able to solve revenue yield problems through incremental fixes. Normalized patient service revenue per adjusted admission fell 1.6% in the fourth quarter of fiscal 2026, which ended June 30, compared with the same period a year earlier. CommonSpirit added vendors, standardized contracts, worked to reduce clinical denials and escalated payer disputes during the year, but those gains were offset by a shift in payer mix away from commercial coverage and lower case acuity, according to Mary Tyren, interim system senior vice president of finance and corporate controller.
“Getting paid appropriately for the care we provide continues to be a critical near-term priority,” Ms. Tyren said.
CommonSpirit expects its cost to collect to fall from roughly 6% to less than 5% by the end of fiscal 2027, putting it on a path toward an ultimate benchmark of less than 3%. Mr. Browning said the transition will break even in fiscal 2028 and generate positive cash flow in fiscal 2029 as the system builds scale and aligns its work with Optum360, its other revenue cycle vendor. Over the next three years, he said, the system expects a 4% impact on go-forward EBITDA, unlocking more than $1 billion in annual recurring net value.
Asked whether investors should expect better collections and a materially lower cost to collect by the end of fiscal 2027, Mr. Browning said the system’s revenue cycle runs on four tracks — the Conifer relationship, the Optum360 relationship, and self-operated functions for both acute care and the physician enterprise — and that he expects improvement across all of them, with some arriving in the second half of the fiscal year.
“We have a plan to improve revenue cycle materially,” he said.
