How to Migrate from Legacy AR to New Revenue Cycle Management Software

Many hospitals are reliant on old legacy systems for health records and billing. These systems have significant issues, especially in terms of security and performance. The need to migrate to a new system is present in many cases; but making the jump can be highly disruptive and cause anxiety for staff. On top of that, a poorly managed transition can result in cash flow problems, with bills being delayed and both patients and staff facing confusion.

Staff must focus on the implementation but keep normal operations running. It is simply not possible to train for the new system, work accounts in the new system and work accounts that have not yet been converted at the same time. Mentally switching between systems is a recipe for reduced productivity and morale.

The answer is to turn to revenue cycle management professionals to assist with the process. Called A/R liquidation, it involves experienced staff who specialize in handling these transitions. They are familiar with multiple legacy systems and with your new system and can ensure that the legacy system is run down without huge cash flow problems and can assist in-house staff in making the adjustment.

The Root of the Problem

The root of the problem is that the same staff must both support the legacy system and implement its replacement. This results in staff being stretched thin and doing neither job well. An increase in mistakes can result in the hospital not getting all the money owed and more bills going to collections. Insurance companies can also end up confused by the changes and send in the wrong data.

The old and new systems generally run in parallel for a while, leading to the issues listed above and an increase in anxiety for staff. Mistakes lead to fear of mistakes which leads to more mistakes.

Instead, hospitals should bring in resources to support the legacy system while staff train on the new one. This ensures:

·         That cash collections equal or exceed existing performance (often, part of the point of transitioning is to increase collection performance).

·         That leadership can focus on implementation and training.

·         That the legacy system is retired as quickly as is possible.

This means reaching out for external resources.

What the Vendor Can Do

Despite this, many hospitals are tempted to handle their legacy transitions alone. This leads to several issues, of which the most significant is a decrease in cash collected. Consistent cash flow is often not maintained during and immediately after the transition. Thankfully, most hospitals realize this quickly, with nearly 80% seeking an external partner to help them manage their accounts. To ease this, the external vendor will:

·         Work onsite (or remotely) at your hospital to support your staff.

·         Transfer AR from the legacy system to the new one as needed, whilst ensuring as fresh a start as is possible.

·         Act as a seamless extension of your Financial Services team.

·         Help create analytics that can direct efforts based on status codes, claim size, and age, prioritizing accounts that can generate reimbursement quickly.

·         Meet with you weekly to track process, monitor performance, and answer questions.

The vendor should be your partner through the process; likely they have gone through it many times before with other, similar providers, and have learned from both their mistakes and those of their past clients.

What is the Time Scale?

You should begin the process at least four months before the go-live date to allow time for cleaning up of old data that does not need to be transferred and accelerate collection on aged receivables. An ideal goal is to reduce the amount of data that must be migrated by getting old accounts paid off or otherwise dealt with; in some cases, this may mean writing off bad date. Pursuing old accounts can also help with any cash flow problems. The goal is to aim for a fresh start, with old accounts dealt with and new ones created on the system. Transferring large amounts of unnecessary data can bring you back where you were before transition, with a clogged system that performs poorly, surprisingly quickly.

This process will continue until three months post go-live, at which point most aged receivables will be processed. Make sure your vendor has experience with both your legacy system and your new one. They should at least be familiar with one or the other, but both is the ideal. A good revenue management vendor will know multiple systems and have the right staff with the right training to help you.

Overall, expect a 16 to 24 month overlap period in which staff must learn and access two systems. Many hospitals realize the need for outside help around 60 days prior to the transition and discover it only after they start struggling to keep solid performance. An even worse case scenario is realizing you need help only after the transition, when it is too late to do anything but clean up the mess and hope that you can get everything together. A poorly handled transition can also result in old accounts being lost and then unnecessarily written off.

Migrating to a new revenue cycle management system requires high levels of due diligence and organization. Best practices require structuring the proper resources, questions, and goals to ensure cash is accelerated and mitigate any regulatory, compliance, and performance risks. Unfortunately, many providers think they can handle their receivables with the old system right up to the point of conversion. They then end up regretting this as they scramble to keep up and then struggle to find the assistance they need.

Rather than being one of those providers, plan to involve an outside vendor in your transition from the start. By involving experts early in the process, you can get sustained assistance to ensure that cash flow problems do not occur and even advice on the best new system to switch to.