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AmSurg Centralizes Payments with EZPayManager,
SmartStream, and Citrix Metaframe;
Takes Disbursement Control in High-Growth Situation for ACH Payments and Positive Pay
THE BACKGROUND
A predecessor company to AmSurg Corporation provided
physicians in surgery centers (single-specialty, practicebased
outpatient, or ambulatory) with consulting services for
practice development, licensing and Medicare certifications.
Often, doctors expressed interest in a partner company that
could handle business, risk and financial management,
leaving them free to focus on their specialties. AmSurg
became that partner. Formed in 1992, the company had
grown to 119 specialized operating facilities in 29 states,
with 12 more in development as of September 20, 2004.
AmSurg enters into partnerships with existing practices or
establishes a new surgery center in association with a
medical center or private practice. The centers vary greatly in
staffing and capabilities and not surprisingly, each typically
has had its own way of doing things in the back office. Each
surgery center paid its own bills using methodologies ranging
from handwritten processes to PC-based applications like
QuickBooks, and sophisticated enterprise solutions such as
MAS-90. As acquisition momentum gathered, the company
became concerned that it needed to standardize the payment
process.
THE PROBLEM
One person used to spend two days writing out monthly
checks to vendors that supply the two AmSurg specialty
surgery centers in Louisville, Kentucky. Today, a single
individual has the checks in the mail in less than one day.
The difference is an innovative application of ACOM’s
EZPayManager payment management solution, working in
tandem with two Citrix Metaframe servers at AmSurg
headquarters in Nashville.
THE SOLUTION
Management knew something had to be done. Standardization would be necessary if the company was to
fulfill the mission it had established for itself. Its payment
process called for each center to pay its own bills, and then
send the data to Nashville headquarters to be re-keyed into
the corporate accounting system. The company began to
consider alternatives, including remote processing and
rolling out the corporate payment process in use for
replication at the surgery centers.
The company assembled a team comprised of Controller
Kevin Eastridge, Accounting Manager Kristy Rutherford,
and Financial Systems Analysts Mark Guinsburg and Jody
Tootle, who together devised an “e-payable centers”
strategy, under which remote locations could access
SmartStream to perform their payment processing remotely.
“Our controller saw Citrix as an aggressive technology
concept and one that could be useful in setting up the new
payment strategy,” said Guinsburg. “It is a broadly
applicable solution that allows our employees to access
information on a need basis from any place in the field. For
example, when I travel, I can access the e-mail, our
corporate network, application files like Word and Excel,
and so on.”
The Citrix MetaFrame XP Presentation Server allows the
management of applications from a central location, with
access to them from anywhere, using virtually any device.
At AmSurg, it resides on a two-unit server farm at Nashville
headquarters, with each of the two servers accommodating
up to 50 users in a load-balancing configuration.
While SmartStream has payment capabilities, they are
limited, according to Rutherford. Its check-production
features require the use of preprinted check stock and the
associated handling processes – both of which are expensive
and inefficient. With input from the migration team,
management decided that it would be preferable to eliminate
the use of expensive preprinted stock in favor of checks
generated on plain security check stock and an office laser
printer.
The SmartStream consultant working with the migration
team during the accounting conversion previously had been
exposed to ACOM’s EZPayManager payment management
solution at other SmartStream clients, and she suggested
that the team explore implementing the advanced payment
solution at AmSurg.
EZPayManager is a universal payment platform that allows
users to perform disbursements by MICR laser check and
by electronic direct deposit, using the banking industry’s
Automated Clearing House (ACH) network, with both
checks and direct deposits executed during the same
payment run. A choice of the following payment notification
options can also be included in the mixed payment run:
printed copies, automated fax, automated secure e-mail,
automated secure web posting, and F-EDI (which allows
greatly expanded remittance details to be inserted into the
ACH envelope).
AmSurg purchased EZPayManager in spring 2002 and the
SmartStream migration team implemented three pilot
centers in July. Impressed with the performance, they
began a “full bore” roll-out in August, Rutherford says.
“In the implementation, surgery center personnel can have
two views, SmartStream and EZPayManager,” she says. “If
they just want to make a payment, they log-on to
EZPayManager and print a check on their local printer. If
they want to process invoices, they log-on to SmartStream
and perform the necessary processing. Then, after the
invoices are approved for payment by the financial
representative, the SmartStream files are moved to
EZPayManager for printing at the local surgery center.
THE IMPLEMENTATION
Payment volume among the centers varies from as few as
40 to as many as 200 and more checks per month, with
each center employing two to four bank accounts.
SmartStream and EZPayManager each work with their own
SQL Server databases and one implementation challenge
concerned extending the SQL Server limit of 255 records to
accommodate the continuously growing number of bank
accounts that would be used as the company expanded.
Beyond that, however, implementation was quite simple,
Rutherford says. ACOM’s professional services
implementation team developed standard check formats.
The e-payables team was then able to modify them with
account specifications obtained from centers’ banks using
the EZPayManager design tool. Security is an inherent
feature of the system.
Currently, about 85 percent of AmSurg’s surgery centers
have implemented the new system. The centers that are
now live with EZPayManager participate in a simple tenstep
process:
- Surgery center logs-on to SmartStream
- Invoices are keyed-in and scanned to the scanning
software
- Scanned file(s) are released to Filenet in Nashville
- Accounting staff reviews invoices with the attached
images
- Accounting staff creates check file
- Appropriate funds are transferred to the center’s
account
- The check file is transferred to EZPayManager
- Accounting confirms the funds transfer
- The center prints checks from EZPayManager on its
printer via Citrix
- The checks hit the mail.
The corporate office follows the same process, but with an
enhancement – the use of the ACH module, which the
company acquired as part of the initial EZPayManager
purchase. AmSurg uses the ACH module for two functions:
- Direct deposit of employee expense reimbursements.
- Accounts payable to vendors that have agreed to
accept ACH payments.
“All of our employees are set-up for direct deposits, and
they are pleased with this procedure because it saves them
trips to the bank and they are able to know exactly when the
money will arrive in their accounts,” Rutherford says. “Vendors have been similarly receptive to direct deposits,
and for the same reasons. Corporate used to send out
about 100 vendor checks per week and now we’re down to
about 35. The remittance advice details goes out using
EZPayManager’s automated email module, generated
concurrently with the payment run. The only glitch we
encountered concerned getting the e-remittance files into
Lotus Notes, but that was not an EZPayManager problem
and it was easily solved.”
Some vendors felt that they were not well set-up for receipt
of ACH payments, but most were, she said. The conversion
process was very straightforward: “An accounts payable
processor simply called each vendor and asked if they
would be willing to accept electronic payments. Most were
pleased with the idea that their money would be posted to
their accounts automatically and that they would be paid
faster.”
The benefits of the centralized-distributed accounts payable
system have been numerous, Guinsburg says. “It was
largely a standardization issue,” he says, “and the new
process is easier both for the centers and for corporate.
Our reports are timelier and more accurate and we’ve
gained a great deal of flexibility. Each center pays on its
own schedule, and at corporate, we can go into the system
and view any expenditure at any time. We can identify cost
savings through bulk buying, and eliminate the need for
locally preprinted stationery.”
The company has also dramatically reduced the tendency
towards end-of-month accruals says Guinsburg. And
having a “second set of eyes,” reviewing each invoice has
led to greatly increased accuracy. Moreover, the new
solution makes it easy to view the costs of non-routine items
purchased across the network of centers, enabling vastly
improved financial benchmarking.
SUCCESS
All in all, the diagnosis was sound, the treatment has been
successful, and the prognosis is excellent for a healthy and
effective accounts payable process at AmSurg -- just what
the doctors ordered!
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