Healthcare - National Kidney Care Company

Case Study:

Director Revenue Operations and SOX Compliance

Healthcare Industry

Business Transition and New Compliance Requirement

The Company:  Fortune 500 company is a leading provider of kidney care in the United States, delivering dialysis services to patients with chronic kidney failure and end stage renal disease.

The Challenge:  The parent company acquired one of its two major competitors, forming the largest dialysis company in the United States.  When the acquisition was completed, revenue operations were independently managed at four regional central business office locations, using two distinctly different billing and collection platforms.  The business committed significant capital and leadership resources to manage organizational stress and to effectively merge the four operating environments into a new revenue operations organization while managing operating risks associated with revenue recognition, cash flow, and HHS/OIG compliance. 

During this challenging time period, this publically traded company was also required to document compliance with Sarbanes-Oxley Section 302 and 404 reporting requirements for this new revenue cycle control environment.  The company was not prepared to begin the significant undertaking during the second quarter 2006, and it did not possess the combined internal revenue recognition expertise, internal control over financial reporting expertise, and project management talent required to lead and complete this important financial reporting requirement in a timely and effective manner.

The Solution:  The Company created a new revenue operations (“ROPS”) leadership position and hired Doug Simpson CPA to provide the technical expertise and leadership skills required to meet this special project need.  Reporting to the SVP-Revenue Operations, Doug worked in close collaboration with the corporate finance, internal audit, and SOX compliance teams; the KPMG external auditor; Protiviti and Bain consultants; and the other members of the ROPS senior leadership team. 

The Results:

• Critical assignments were successfully completed while the business focused resources and attention on completing the major acquisition process and on integrating a new billing and collection platform for two regional locations; and then the following year, on implementing software application upgrades and standardizing key processes and controls across the whole organization.

• Facing several individual revenue cycle deficiencies rolling up to two significant deficiencies from the previous year, no deficiencies or exceptions were reported to the Audit Committee by management or the external auditors for the revenue cycle the first full year of SOX implementation under this leadership. 

• When the initial SOX initiative was completed, built and trained a team of 10 SOX auditors and analysts to maintain the responsibility for accurate SOX documentation and for completing monthly and quarterly monitoring control activities

The Outcome:  The ROPS senior leadership team met the immediate requirement of successfully documenting their internal control over financial reporting environment for management and external auditors. As importantly, a quality internal control consciousness was embedded across the four regional central business office locations. This foundation served the company well as ROPS converted to a single billing platform, implemented software application upgrades, and standardized key processes and roles across the whole organization.  Finally, when the transition period was completed, ROPS operation leaders owned the SOX expertise and a solid team of auditors and analysts were in place to support the ongoing task of updating documentation and completing monthly and quarterly monitoring control activities.