Nearterm Blog

Hospital Classification: A New Normal For Financial, IT and RCM Professionals

RCM Consultants

Hospitals have been and still are classified in various ways, depending on the purpose of the hospital classification and how it is to be used. Examples include ownership, bed capacity, service capacity, specialty, teaching, acute care, critical access, location, research and there are many others.

A “new normal” classification methodology has emerged and it is referenced early in most any dialogue with Financial and RCM Professionals that references what is going on in their hospital. It is a kind of subset of the conventional classifications referenced above. It addresses where the hospital is in terms of IT Systems. The three descriptors are illustrated below and it seems that today, every hospital is in one of these stages.


  • What is driving the consideration?
  • Which product is best for my facility?
  • Financial impact and budget prioritization?
  • Move forward now or delay the decision?
  • What modules do we need?
  • Vendor selection process?
  • Enterprise integration?


  • How do we handle legacy AR?
  • Existing team migrate to training while we bring in external resources to run the shop or the inverse of that?
  • If we deviate from the conversion implementation plan or get behind as “go live” approaches, how do we get back on track?


  • Does it make sense to conduct an objective post-conversion discover process?
  • How do we recover from the aftermath of the conversion (backlogs, unanticipated conditions etc.)?
  • Do we need to consider “bolt-ons” to accommodate processes that are not well managed by the new system?

Regardless of where your hospital is in this continuum, the body of associated work represents increased demand for resources and expertise. After all, prior to landing in one of the categorizations above, the hospital team was fully engaged managing day-to-day operations. The content summarized above under each categorization must be addressed in addition to managing the routine functions that are required of the RCM professionals, IT and finance team(s).

Most hospitals recognize the increased demand and engage external healthcare management resources to assist them, especially during IMPLEMENTATION as described above. The decision regarding how to use those external resources can depend on the strength of internal resources, desired timeline, budget, operating conditions and other considerations specific to each facility. We commonly see one of two models;

    External resources (e.g. Directors, Managers, Supervisors) serve in an interim capacity to fill leadership roles. Technicians (e.g. billing, customer service, collections) are also brought in. These “backfill” resources maintain operations while the permanent hospital team focuses on build, training, and development of user proficiency.
    External resources (E.G. Consultants, SME’s, Vendor Resources} are engaged to manage conversion activities while existing Hospital personnel continue to lead and maintain operations.

There is often overlap as we look at these models. This overlap can expand and contract as activities progress. It may even change so that we see a blended model. This can occur as a result of turnover, strategic redirection, unsatisfactory performance, and/or cost. However, deviation from the plan may have unintended consequences and should be carefully vetted prior to implementation.

It boils down to the realization that successfully managing hospital RCM, Financial and IT operations requires a multi-disciplinary team of dedicated professionals at various levels even when no conversion is underway. Definitely a “full-time job” for all involved. When we introduce conversions into the mix, we see an incremental increase in resource demand and the need for different kinds of expertise or “another full-time job” in addition to managing the hospital.

The healthcare management consulting experts at Nearterm assist hospitals in every phase of conversion, centralization, and management. We are passionate about sharing the reservoir of applied methodologies and talented resources we have accumulated over the recent 20 years. We are also passionate about learning and we welcome your perspectives so please feel free to comment on this blog or simply give us a call.