Most companies with more than one branch office have experienced closing a branch. The more branches in a company the more opportunities for closing a branch. There is nothing that a company can do that creates more hostility from employees than closing a branch.

If a company goes out of business, somehow the employees understand that the process - there were not enough patients. But if the company remains in business, and closes down a branch, the downsized employees, and those transferred, find it hard to forgive the management. Yet it is those employees on whom management must rely to minimize the losses.

The losses essentially come from losing track of the files. I know of one company which closed down 30 branches in 3 years ago, and they were unable to collect the receivables that were open at the time of the downsizing. They collected no more than 5% of those open accounts. The branch employees just did not care about the accounts. Some of the reimbursement people found other jobs before the branches were closed. The files were shifted from one storage place to another, then shifted again. By the time the branches were closed, there was nobody in the company who knew where the files had been moved. When the rents were not paid, the landlords simply had the files carted to the dump, or burned. Millions of dollars were simply lost.

When a nursing agency is closed down, the only major asset in existence are the accounts receivable - the insurance accounts, medicare, medicaid, and even the "uninsured" accounts. All these accounts must be handled in a business-like manner. And by an executive.

Long before the branch is closed, every file should be either copied or moved to a central area. Every file in the hands of a collection agency should be retrieved. We have known instances where the collection agency continued to work these accounts, and failed to pass on the money to the provider.

The following documents must be fastidiously preserved, classified, and kept in an accessible central area:

1. All employee records.
2. All invoices and explanations of benefit.
3. All assignments and treatment agreements.
4. All verification sheets.
5. All managed care agreements.
6. All records of telephone conversations.
7. All nurse's notes.
8. All doctor's certificates of medical necessity.
9. All plans of treatment.
10. All correspondence with:
    • doctors.
    • insurers and medicare.
    • patients and families.
    • hospitals
11. All employee comments about the facts in the case, the treatment of the patients, the attempts to deal with the insurers and patients.

Every company should have a plan of action in the event of downsizing. That plan should be prepared by a senior executive, and should be carried out by a lower level executive. Creating such a plan and carrying it out will be done at a very small cost, as compared with the huge losses in accounts receivable in the absence of a well executed plan.