One entity per location, consolidated by hand
Group practices commonly run a legal entity per site. Consolidating them monthly in a spreadsheet is where the close goes, and intercompany between them is eliminated from memory.
ERP by industry
A healthcare group's finances are decided by two things the practice management system reports badly: what each location and provider actually contributes after loaded cost, and what proportion of billed charges ever becomes cash.
Tell us your location count and how you consolidate today. We will show you what changes.
The problems
These are consequences of a stack where the practice management system holds clinical and billing data and the accounting system holds almost nothing useful about either.
Group practices commonly run a legal entity per site. Consolidating them monthly in a spreadsheet is where the close goes, and intercompany between them is eliminated from memory.
Gross charges, contractual adjustments, denials, write-offs, and patient responsibility sit between what was billed and what arrives. Most groups can state the first and last and not the path between them.
Collections attributable to a provider, less their loaded compensation, less their share of staff and facility cost. It determines compensation and it is computed annually at best.
Shared staff, shared supplies, and centrally negotiated contracts allocated by a formula nobody has revisited, which makes site comparison unreliable in exactly the analysis it is used for.
Clinical supplies bought across locations from several distributors with no consolidated view, so volume leverage is unused and cost per procedure is unknown.
A single average that hides which payers, which locations, and which claim types are slow. The remedy differs for each and the average points at none of them.
Where the money goes
A representative shape for a multi-site group practice. The first two deductions are usually larger than every other line combined.
Contractual adjustments are the difference between chargemaster rates and negotiated payer rates — expected, and not recoverable. Denials and write-offs are recoverable revenue that was not recovered. Reporting them as one line makes the recoverable portion invisible, and it is usually the only part of the forty-seven points that anybody can do something about.
Your stack
Your EHR and practice management system keep doing clinical and billing work. What changes is that the financial layer above them stops being assembled by hand.
Benchmarks
Drawn from our own engagements with multi-site practices between $10M and $60M. The bar is a typical erp.io customer after two quarters; the marker is the segment median.
Protected health information does not enter our system and we do not want it to. What we read from the practice management or billing system is financial: charges, adjustments, payments, and payer, at the level of a transaction rather than a patient.
That boundary is deliberate and it simplifies your compliance position considerably. A financial system holding no PHI is not a system your HIPAA risk assessment has to treat as clinical, and it removes an entire category of question from the evaluation.
The single most useful reporting change for most practices is splitting the forty-seven points between charges and cash into its two components. Contractual adjustment is expected and structural. Denials, underpayments, and timely-filing write-offs are recoverable revenue that was not recovered.
The second number is typically five to seven points of gross charges and it concentrates heavily — one payer, one claim type, one location, or one coding pattern. Concentrated problems are fixable; averaged ones are not.
In most groups, provider compensation is set against production or collections and reviewed annually against a model built in a spreadsheet. That model determines the largest cost line in the business and very few people can reproduce it.
Collections attributable to a provider, less loaded compensation, less an allocated share of clinical staff and facility cost, computed monthly from the same data everyone can see, makes that conversation evidential rather than negotiated from memory.
Groups that grew by acquisition frequently buy the same clinical supplies from three distributors at three prices, because each site kept its existing relationships. Total spend with each vendor across the group is invisible when each entity is its own book.
Consolidated vendor spend is one of the faster returns available here — it is visible within weeks of connecting and it converts directly into a negotiating position.
We are not an EHR, a practice management system, or a revenue cycle management platform. Claim submission, coding, clearinghouse workflow, and denial appeals belong with your RCM vendor and we read the results rather than competing. Hospitals and health systems with cost accounting, DRG analysis, and regulatory cost reporting requirements need a healthcare-specialist system — we serve group practices, not institutions.
Questions
Five to seven points of gross charges are usually recoverable and concentrated. Averaging hides both facts.