Healthcare Connection

Checklist: Effectively Sunsetting a Legacy Patient Accounting System

Feb. 6, 2018


By Eric J. Boggs; Ryan W. Hartman, CHFP; and Amy R. Scott, MHA

Checklist: Effectively Sunsetting a Legacy Patient Accounting System

In an effort to operate more efficiently and better serve their patients, healthcare organizations are adopting new technologies, including newer, more streamlined patient accounting systems (PAS) – also called electronic health record (EHR) systems. As organizations move to newer tools, they need to have a well-planned transition strategy, including a plan for effectively winding down, or sunsetting, their legacy systems, to make sure vital data is not lost.

Winding down legacy systems will be a challenge that many organizations increasingly will face, as changing systems more frequently becomes the norm. It is estimated that EHR replacement within healthcare systems increased by 59 percent between 2014 and 2015.1 Most healthcare organizations are going to experience a system transition at some point – most likely several as the years go by. Updated systems help organizations meet government mandates, stay compliant with patient safety and quality best practices, and remain competitive.

Sunsetting an old system prior to transitioning to the new system is a major undertaking that needs to be carefully planned to protect important legacy data and comply with government regulations that mandate keeping records for extended periods. Access also is necessary for future audits, appeals, regulatory review, and Medicare cost reporting as well as for providing patients with requested medical records. Follow this checklist of four steps for a successful legacy system wind-down.

1. Plan Ahead

In the planning stage, healthcare organizations should:

  • Assemble a team.
    • Assign ownership to stakeholders, who will be responsible for achieving a successful wind-down.
    • Include staff members from the IT and billing departments and clinical staff.
    • Set up a designated meeting space, and schedule weekly calls or meetings.
  • Establish a timeline.
    • Make sure sunsetting the legacy system is an independent project that takes place before the new system goes live.
    • Plan to start at least six months prior to implementation of the new system.
  • Assess resource needs.
    • Take stock of the financial and clinical data in the legacy system.
    • Make decisions about:
      • Which accounts need to be worked in the organization’s accounts receivable
      • Which medical records should be kept
      • Which records will need to be accessed in the near future, which will need to be accessed indefinitely, and which can be archived
      • Which pieces of the wind-down process can be resolved with internal resources and which can be outsourced

2. Improve Processes and Make Adjustments

Organizations should review all aspects of their current revenue cycle and clinical documentation workflow systems and assess what works, what to update, and what to eliminate. The idea is to not take bad habits from the legacy system when the organization transitions to the new system.

Organizations can ask the following questions to help identify areas for improvement:

  • Are current processes clearly documented?
  • Will these processes be transferrable to the new system?
  • Does the current process include operational gaps?
  • How will the new PAS affect resource allocation and change workflows?

3. Clean Up Existing Accounts

Healthcare organizations should consider the following steps when cleaning up debits in the legacy system:

  • Work down accounts: Only self-pay, self-pay after insurance, and credit balances should remain after debit accounts are resolved.
  • Pick a date: Determine a date – and stick to it – for when no new charges will be added into the legacy system. A best practice is to stop adding charges into the old system before the organization goes live on the new system.
  • Select a vendor: Consider an outside vendor to help the organization resolve outstanding debits more quickly and alleviate the burden on already-stretched staff members.
  • Switch over all electronic data interchange processes that feed into the old system: Electronic claims submissions, payments, and remittances must be switched to the new system. This process can take 30-plus days to complete, so plan accordingly.

To assist with resolving credits in the legacy system, healthcare organizations can either manually handle their credits or choose a vendor that uses technology to automate the process and resolve credits more quickly. Whichever method an organization chooses, it should consider these seven steps for a complete credit balance wind-down:

  1. Conduct exemptions analysis. Review relevant state statutory exemption laws to avoid refunding money the organization is not required to refund.
  2. Check for adjustment errors. Identify dollars not actually due back, such as credit balances caused by overcontractualizations or other erroneous adjustments.
  3. Conduct future (pro forma) exemption analysis. Identify when any remaining nonexempt refunds will become eligible for exemption.
  4. Conduct credit to debit analysis. Find any open debit balance accounts in which a patient refund is identified. Transfer these dollars to debit accounts to lower credit and debit liability.
  5. Identify patient refunds. Use transaction account history and available analytics to identify true overpayments due back to patients.
  6. Conduct address verification. Verify addresses on all remaining accounts in which a patient refund is due. Transfer accounts with invalid addresses to an unclaimed property liability account.
  7. Transfer liability. Through the unclaimed property reporting process, transfer abandoned property to the state custodian when property owners cannot be located after a certain period of time.

4. Migrate Data and Retire the Legacy System

  • Choose an archiving solution for legacy data. Consider moving data to an active-archiving cloud-based storage system rather than importing data directly into the new EHR or keeping the old system running. This approach:
    • Reduces the risk of data loss
    • Assists with state and federal data retention compliance
    • Reduces costs and IT support requirements
  • Move the legacy data to its new home.
  • Shut down the legacy system.

Consider Outside Help

Remember that sunsetting a legacy PAS is a complex process – one that organizations may not wish to tackle alone. Organizational leadership should consider using outside resources to help achieve a faster, smoother legacy system wind-down.

1 Gaby Loria, “EHR Software Buyer Report – 2015,” Software Advice, 2015,

Eric J. Boggs
Ryan Hartman