CommonSpirit to finish Conifer exit Oct. 30 as RCM moves in-house
- CommonSpirit’s South region converts off Conifer on Oct. 30.
- More than 1,900 Conifer employees have been rebadged to CommonSpirit.
- CommonSpirit will pay Tenet about $1.9 billion over three years.
- CommonSpirit targets a cost to collect below 5% by the end of fiscal 2027.
ILLINOIS, UNITED STATES — CommonSpirit Health expects to finish bringing its revenue cycle in-house from Conifer Health Solutions on Oct. 30, when its South region converts.
The cutover comes two months ahead of the Dec. 31 termination of a contract with a vendor CommonSpirit has used since 2012.
The final weeks of the exit
The 136-hospital system is in the final weeks of the transition, according to Becker’s Hospital Review.
Its Central and Pacific Northwest regions completed their revenue cycle conversions on Aug. 28.
More than 1,900 employees have been rebadged from Conifer to CommonSpirit, a transition completed Aug. 3.
“Insourcing our revenue cycle stands to optimize the patient experience just as much as it will improve the cost to collect,” Senior Executive Vice President and CFO Michael Browning said on the system’s Oct. 2 earnings call.
What the exit costs
Under a February agreement, CommonSpirit will pay Dallas-based Tenet Healthcare about $1.9 billion over three years as Tenet regains full ownership of Conifer.
Conifer will pay CommonSpirit roughly $540 million to redeem its 23.8% stake.
At the time of the deal, CommonSpirit’s cost to collect ran about double the industry average.
Executives now expect it to fall from about 6% to below 5% by the end of fiscal 2027, with an ultimate benchmark of less than 3%.
They project the transition will break even in fiscal 2028 and turn cash flow positive in fiscal 2029.
Most of the system’s $2.8 billion in fiscal 2026 special charges were tied to the Conifer exit.
“We’re not afraid of making deliberate, long-term strategic investments, even if it means incurring short-term costs and headwinds,” Browning said.
Layoffs on the vendor side
Tenet will lay off 1,037 primarily remote Conifer employees by Nov. 2, according to a WARN notice reported in September.
The notice said the layoffs are expected to be permanent and are partly attributable to CommonSpirit’s decision to end its contract.
Browning said CommonSpirit will build scale and align its work with Optum360, its other revenue cycle vendor.
What health systems can take from it
For health systems, CommonSpirit’s exit shows that unwinding a long revenue cycle management (RCM) contract runs for months, from rebadging staff to converting one region at a time.
Leaders weighing healthcare outsourcing against insourcing can benchmark cost to collect before and after a switch.
They can compare vendors on the top healthcare outsourcing companies in the United States list.
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Disclosure: Outsource Accelerator uses AI tools in the backend of its editorial workflow. Every article is reviewed and verified by a human editor before publication.
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