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Operational Decision Points for Legacy A/R Conversions

Sponsored by Parallon
Article | Revenue Cycle Technology

Operational Decision Points for Legacy A/R Conversions

Hospital leaders with system conversions on the horizon should plan for the critical strategic decision points at pre-conversion, implementation, and post-conversion.

This article is part II of a series for hospitals that migrate legacy accounts receivables (A/R) to new platforms. In last month’s issue, Parallon addressed enterprise-level considerations around the decision to outsource. In part II, Parallon will provide a high-level overview for what a successful legacy A/R project will require from pre-conversion to post- conversion at the operational level.

Hospital leaders facing system conversions have multiple operational challenges around legacy A/R management during the transition to new revenue cycle platforms. The right team, the right planning, and the right execution are critical to achieve the desired outcomes while maintaining revenue streams and protecting cash reserves.

For hospital leaders with system conversions on the horizon, or with a conversion quickly approaching, what are the critical strategic decision points for legacy A/R? Knowing what you need to do and when you need to do it is crucial to being prepared to manage legacy A/R demands. The following decision points will guide leadership from pre- to post-conversion and help avoid the potential calamitous pitfalls that can shorten careers.


The year immediately preceding a transition of revenue cycle systems creates daunting operational challenges. Management and subject matter experts will be pulled from the operational realm into the planning processes, leaving substantial operational holes only to be followed by line resources being tapped for new system training. The resource drain is one of the leading causes of conversion-related revenue shortfalls. The best conversions start well in advance of go-live dates for new platforms. One year out is a good rule of thumb for providers to begin the planning process.

Determine your resource capacity (one year out from go live). It is important to rally the relevant leadership of your hospital, including the CFO and revenue cycle leadership, to assess the following:

  • What revenue cycle resources can you dedicate to the conversion project while also maintaining billing and insurance follow-up performance?
  • What subject matter experts will you take out of production, and how will you backfill those roles?
  • What are specific plans for training?
  • What time frames will be impacted?
  • Can you repurpose staff to build an interim legacy A/R operation if you are consolidating operations and building a centralized business office?
  • What is your retention plan for interim legacy staff, and what is your back-up plan if resources prematurely resign?
  • What are your contingency plans if your project is on a smaller scale, and you plan to keep it in-house?
  • Are you prepared for the risk of the swivel-chair strategy—when staff must toggle between old and new systems—and the possible impact?
  • Is everyone on board with the risk on revenue and cash reserves?
  • What are your contingency plans for claims follow-up, issue resolution, and denial management?
  • What is your budget, and has it been approved if you are going to hire a vendor?

Locate and secure a vendor (1 year to 9 months out from go live). If you decide you need help managing your legacy A/R conversion, then it’s time to identify and secure a partner. You will need to put the project out to bid about nine to 12 months before the go-live date. Some introspection will help guide you:

  • Will you issue an RFP or request proposals from current partners and industry leaders? If yes, do you have the right RFP to issue for this job and enough lead time to put out an RFP and receive bids?
  • How important is local market knowledge of your payers?
  • Are your vendor choices market leaders, and will they collaborate with you on building key performance indicators (KPIs) to measure success?
  • Do your vendor candidates have hands-on experience with your legacy platform?
  • Are the candidates a good cultural and operational fit?
  • Do you have a clear plan for the work you intend to outsource (pre-conversion clean up, post-conversion run down, a combination of both)?
  • Have you provided an aged trial balance and other reports so quoted pricing is accurate and free from assumptions?
  • Do you have clear definitions around the scope of work such as inventory age, financial class exclusions, and grace period?
  • When will inventory be assigned, and will it be cascaded pre-conversion?
  • Will the A/R follow-up work be performed remotely on the legacy system, or will you use an electronic data interchange (EDI) approach to the vendor system? What is the upside or downside of each approach?
  • Once there are finalists in the process, have you checked references?
  • Once selected, do you have adequate time built into the process to accommodate legal, IT/EDI, and project-management-resource demands?
  • Will the vendor support interim remote resources during the implementation process?
  • What reporting is available, and what KPIs will be benchmarked?
  • What’s the best approach to fees to meet your objectives?
  • What is the proposed rate and overall cost of the program?
  • Does the vendor have a robust implementation planning document and process, and formal project management infrastructure and protocols?


Once a vendor has been selected, the project can start. Allow for at least six to eight weeks to complete the implementation.

  • Be sure to engage with the vendor’s project management team and hold an on-site kick-off meeting for team introductions and relationship building.
  • Provide relevant policies and procedures to the vendor.
  • Be prepared to provide a managed care contract matrix that provides contractual information or copies of contracts.
  • When available, provide access to electronic health records (EHR), imaging and contact management software.
  • Depending upon automation levels, assess if there is a need for an on-site vendor resource.
  • Establish a file transfer protocol (FTP) connectivity to share large files.
  • Establish the plan and timeline for system access.
  • Establish the plan and timeline for EDI- file testing and validation.
  • Refine reporting requirements and establish performance goals.


During and following go live, you will need to assess the success of the project and the value of the outsourced team.

What does success look like? (Moving forward from go live).

  • Did the vendor achieve the desired liquidity for the inventory they targeted?
  • Were other critical KPIs achieved?
  • What was the impact to patient satisfaction?
  • Is there enough value with the vendor engagement, and their knowledge of your facility and its market, to continue engagement beyond the conversion?

Timely decision-making and partnering with the right vendor can provide a smooth legacy A/R conversion and be the difference between success or failure. In addition to ensuring a hassle-free patient experience, the bottom line is the bottom line.

About the Authors

Robert Cato

is a regional vice president of sales at Parallon, and a member of HFMA’s Massachusetts-Rhode Island Chapter.


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