Third Party Billing Days Sales Outstanding: A Case Study

Affinity Health Services was recently engaged to provide third-party billing services for a senior living community consisting of two large nursing facilities and independent living apartments. The facilities struggled with attracting and maintaining skilled billing specialists, which led to significantly high Days Sales Outstanding (DSO), cash flow issues, and bad debt.

Specific challenges included limited billing specialist personnel, minimal corporate support to stay current on industry updates and on-going training, lack of business office billing and collection policies and procedures, and years of inaccurate aging balances with no formalized bad debt policies . These challenges resulted in $14,212,432 in Accounts Receivable.

Affinity conducted a comprehensive business office assessment, evaluating business office roles and responsibilities, offering training opportunities, establishing billing and collection policies and procedures, implementing bad debt reserve practices, and conducting an audit of billing software setup.

After completing the assessment, the following steps were initiated:

• Affinity Health Services assumed the third-party billing for skilled residents and Part B services on an interim basis to backfill open positions
• Revision of business office staff roles and responsibilities
• Training in billing practices and collection policies and procedures Implementation of a comprehensive aging review process
• Revamped Triple Check process
• Corrected billing set up in Point Click Care
• Reviewed accounts for bad debts and established a proper bad debt reserve
• Rebilling of old account receivable

Through this effort, the facility saved money while significantly increasing cash flow—an impact of more than $4 million. Read more in the Third-Party Billing and Days Sales Outstanding Case Study.