A large Home Care provider was managing more than 1,000 home care packages for clients across Victoria. The organisation had recently centralised administration and service coordination functions to manage the large volume of packages.
Reasons for change
The CFO was finding significant monthly swings in net profitability for the Home Care program. The CFO believed that with the stability of the client base, monthly financial results should be relatively constant.
What was needed
An independent review of the HCP program to identify the cause of the significant variations month to month.
How we helped
Our thorough research identified the following:
A short-fall in Medicare income of around $400k.
A preliminary difference of $460k paid to brokered Suppliers that was not charged to a client package (client balances were overstated)
Variations were caused by processing broker invoices in irregular batches, month end timing differences and irregular Medicare claiming.
We developed the following capability:
Financial capability to reconcile Medicare online, client statements and brokerage payments to ensure financial balances agree with client statements.
A disciplined month end close process to eliminate timing differences.
New reports for the GM Home Care to properly understand the financial performance of the HCP program.
We identified a surplus of Case Managers was contributing to the loss.
Improved business processes to manage new brokers, broker invoice matching and client statement reconciliation.
Revenue recovery. The organisation was able to recover most of its unclaimed Medicare payments and chase up suppliers to ensure the correct invoices were paid.
Better information. The Finance team could better manage home care package adjustments, closures and claiming with the right information on hand.
Better processes. The month end process was significantly enhanced through reconciliation tools to minimise administration mistakes, Medicare issues and timing differences.
Home Care provider brought an end to persistent program losses
Large Aged Care provider identified the root cause of persistent income variability and improved processes with the right information.