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Sage Memorial Hospital

Ganado, Arizona

CLIENT

Sage Memorial Hospital is a 45 bed rural hospital in the northeastern corner of Arizona located on the Navajo Indian Reservation. The facility is the only hospital on the Navajo reservation that is not owned by the US Public Health – Indian Health Service. Sage provides a wide range of inpatient and outpatient services. The hospital handles over 50,000 outpatient visits per year and manages three satellite clinics in Wide Ruins, Greasewood and Sanders, Arizona.

PROBLEM

Sage had nearly $10,000,000 in AR with over $6,000,000 over 180 days old. Gross days receivable outstanding was nearly at 200 days. Billing and collection staff had minimal training on Medicare billing and follow-up which represented over half of outstanding receivables. Limited management procedures or instructions had been given to staff.

RESOLUTION

re|solution was engaged in April 1999. Total accounts receivable assigned was over $4,000,000 consisting of accounts over 180 days old and over $250 per account. Included in the assignment were over 4,500 accounts and included accounts that were Medicare, AHCCCS (Arizona Medicaid), Commercial, Blue Cross/Blue Shield, Workers Compensation, Indian Health Service and Managed Care.

RESULTS

By the end of July 1999, re|solution had resolved over half of the dollars through either payment or write-off. Actual dollars collected by re|solution during this period on assigned accounts exceeded $1,000,000. Sage Memorial Hospital had average cash collections of approximately $500,000 during the first three months of 1999. April, May and June’s cash collections were $750,000, $1,000,000 and $1,300,000, respectively.

Averaged cash receipts collection per month remained at $730,000 for over a year after our engagement. The significant increase in monthly cash collections was due in large part to re|solution’s efforts in collecting aged receivables that were over 180 days. In addition, Sage’s business office staff was trained in effective billing, collection and follow-up by re|solution staff. The morale of the business office staff was substantially improved and the hospital administration was ecstatic about the increased cash flow. Cash collections are up, aged receivables are down and days are down significantly. The business office is in a much stronger position than when re|solution was first engaged.