Case Study: Healthcare

Improving cash flow collections by more than $35 million annually

Increasing propensity to pay, reducing loss ratio, streamlining labor costs, and dramatically improving provider abrasion for leading payer

Overview

When one leading payer needed to do more to recoup overpayments, Sagility provided the answer via propensity-to-pay analytics. Sagility not only captured critical data on overpayment trends—we mastered the challenge of making it actionable to support this client partner’s growth. Today, Sagility provides analytics, along with impactful process reengineering, and automation to enhance capital and reduce leakage.

+80%Improvement in forecasting accuracy

90-dayClaim collection window target met

$35MIn capital freed up

Client background

The client is a leading payer in the United States working with tens of thousands of medical, vision, and dental care providers.

Business challenge

According to Kaufman Hall, 96% of healthcare chief financial officers think that their organizations need to do more to leverage financial and operational analytics, and 94% said they have experienced increased pressure to have more insight into how financial results impact business strategy.

With these types of statistics as a backdrop, the client hoped to:

Reduce the loss ratio
Increase cash flow and free capital
Improve forecasting accuracy
Improve turnaround times
Recover overpayments

The solution

An analytics model focused on forecasting and overpayment

Sagility account leadership refined focus beyond collections to planning and forecasting. We created and piloted an analytics model focused on less than 90-day (within client collection window) claims overpayments. With this data mining by age of receivable, we earned client trust to build another model that delves deeper into overpayment costs, recoup, and forecasting. This more mature and client-aligned model collects and forecasts provider collections and overpayment data to increase per-day savings and determine solutions by weighing against overpayment volume, to address amounts owed to client, by provider. This model calculates interest on overpayments and flags possible escalations.

An understanding that extends much, much further than collections

Today, Sagility provides the power of several thousand FTEs across 11 facilities and 5 countries (India, Philippines, United States, Jamaica, and Colombia) to the payer. We manage more than 95 separate processes for the client, across voice, non-voice, front office, back office, fulfillment, and knowledge management. The client trusts Sagility with a wide scope that spans medical, dental, life, vision, LTD, STD, pharmacy, and worker’s compensation across Medicare/Medicaid groups and commercial plans.

Results

With this days-sales-outstanding (DSO) model focused on receivables age, interest, and day-window collection probability, Sagility has tightened up the loss ratio for this client, to reduce leakage and free capital of more than $35 million.

With Sagility’s precise focus, financial recovery forecasting accuracy has improved from 80% to 95%. The uplift in recovery results from faster payment turnaround time and more pragmatic overpayment process focus. Annualized predictions will yield increased cash flow in the future.

Global locations

USA • India • Philippines • Jamaica • Colombia

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