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Revenue design thinking: constructing an accelerated cash /phased write down story


Felker, Christopher (2018), Revenue design thinking: constructing an accelerated cash /phased write down story, v5, DataONE Dash, Dataset, https://doi.org/10.15146/R3696S


A well-designed data story is a launch point for revenue cycle professionals using analytics to manage accounts receivable according to portfolio principles.

In the last 100 (one hundred) days before the close of a fiscal year, holding accounts receivables too long poses an inordinate risk on the perceived value of UCSD Health's trial balance inventory.

In April 2018, we started to design a Tableau dashboard that would more accurately forecast two things


Future free cash flow growth FCFFwhere t = 100 calendar days


Cash expenses resulting from variable LGDt where t = 100 calendar days

The incentive to hold on to accounts receivable inventory is diminishes starting on 03 22.

This is because there is a compressed schedule for adjudicating accounts with outstanding balances. Before this date, claims and payments can be qualified as future cash flows that are risk adjusted along a spectrum from probability of default PD, exposure at default EAD and loss given default LGD.

Claims that are submited to payers between 07 01 and 03 22 have from 001 - 264 days to complete the health care payment revenue cycle [1].

For example, this 264d period we determine that only 5% of a certain class of trial balance accounts default. However, after 264d, without vendor led recoveries, those same classes of accounts might incur 30% LGD.

The really interesting question is whether there are UCSD interventions that might alter this increased rate of LGD rates. With a full historical data set same class of payer and plan accounts may help trace IFRS 17 default behaviors.

For now, we used this dashboard to identifiy the payers and plans most likely to be engaged in accellerated cash or LGD accounting entries. 

We set out to collect timely information from a prior fiscal year (FY2017) that incorporated claims volume [2], payment history [3] and account trial balances [4] from independent data brokers.

These data sets were combined (full union) to create a dashboard for these 100 critical days that exemplifies thoughtful planning, informed design, and a critical eye for details that translate into verified accounting entries.




Electronic (or paper) health care claims may create data as a result of one or several ANSI X12 INS 100  insurance / health code transactions [4]. The accounting level description of an individual account's 'trial balance' might involve the notification to UCSD Health of a probable default PD in a returned 835. Some of this data may triggers a system action (in Epic) to place the acount into an exceptions work queue. In other cases, there may be administrative decision making related to denials reviews or inquiries like 277 health care claim status notification that will trigger an assignment to a work queue.

A person at UCSD Health could engage the payer personally, or designate the account for engagement by a vendor. The decision to assign or retain the liability might be made after a certain threshold number of UCSD Health initiated sequential actions. When assigned to a revenue recovery vendor, the accounting description of the account changes to exposure at default EAD. At the end of the fiscal year, EAD accounts are qualified for inclusion / exclusion from the balance sheet for UCSD's fiscal year. 

IFRS 17 [5] is a comprehensive international accounting financial reporting standard than can be used to analyse these accounts, their payers and the plan designs reflected in contracts.


d/279a 2018 14 095 c1992801 claim detail r3696s 2017 d 081 112

d/279a 2018 14 095 c1992801 claim detail r3696s 2017 d 113 144

d/279a 2018 14 095 c1992801 claim detail r3696s 2017 d 145 176

These data sets contain ~195,450 claims and US$ 559.5M in anticipated FFCF revenue.





The Accredited Standards Committee X12 ASC X12 is a standards organization. Chartered by the American National Standards Institute ANSI in 1979, it develops and maintains the X12 Electronic data interchange (EDI) and Context Inspired Component Architecture (CICA) standards along with XML schemas which drive UCSD Health's business processes.

270 eligibility, coverage or benefit inquiry; 271 eligibility, coverage or benefit information; 274 health care provider information; 275 patient information; 276 health care claim status request; 277 health care claim status notification; 278 health care services review information; 500 medical event reporting (government program worker's compensation); 820 premium payments (payer accounts payable); 834 benefit enrollment and maintenance; 835 health care claim payment / advice; 837 health care claim

The critical path for a claim that returns with a rejection, denial and / or an under payment might be as follows: 837, followed by 835, UC San Diego Health follow on activities, assignment to a revenue recovery vendor, measurement of that vendor's performance (return data), then administrative determination for final accounting treatments. 

See Health care in the United States, 'System efficiency and equity' <http://bit.ly/2H4At3L> last accessed 2018 04 03.

According to the insurance industry group America's Health Insurance Plans, administrative costs for private health insurance plans have averaged approximately 12% of premiums over the last 40 years. There has been a shift in the type and distribution of administrative expenses over that period. The cost of adjudicating claims has fallen, while insurers are spending more on other administrative activities, such as medical management, nurse help lines, and negotiating discounted fees with health care providers.

Young P and Olsen L 2010. Roundtable on evidence-based medicine; Institute of Medicine. The healthcare imperative: lowering costs and improving outcomes: workshop series summary  <http://bit.ly/2HbEnYU> last accessed 2018 04 03.


IFRS 17 Insurance contracts 05 2017.

For UCSD Health

present value of future cash flows + risk adjustment + unearned revenue = insurance obligations avoided

Accumulated impairment, accumulated changes in fair value due to operational risk and provisions

For payers

present value of future cash flows + risk adjustment + unearned profit = insurance obligations

Allowances for collectively assessed financial assets

This standard is issued by the IFRS Foundation and the International Accounting Standards Board IASB. The standard allows investors and analysts to (a) identify which groups of insurance contracts are profit making or loss making; and (b) analyse trend information about insurance contracts.

Usage Notes

Produced and disseminated by UCSD Health administrative staff ('employees') under the 2015 10 23 University of California Presidential Open Access Policy <http://bit.ly/2ptLzaU>. Last accessed 2018 03 20. The authors do not own the copyrights for this work, but grant to the Regents of the University of California a nonexclusive, irrevocable, worldwide license to exercise any and all rights under copyright, in any medium, and to authorize others to do the same, for the purpose of making their articles widely and freely available in this open access repository. See policy text 3(B)(1). There is no embargo period that would delay this publication. See procedures 5(C).


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