Patient Engagement Strategies Collect or Charity Maximize reimbursement

Patient Engagement Strategies: Collect or Charity Maximize reimbursement from those who can pay. Find financial assistance for those that can’t. October 22, 2012 Kim Thompson Patient Access Manager Basset Healthcare Network David Dyke VP Revenue Cycle Relay. Health

Your Presenters • Kim Thompson Patient Access Manager at Basset Healthcare Network • David Dyke VP Revenue Cycle at Relay. Health 2

Agenda Transformational Times Collecting Early is Easy… Right? The Financially Engaged Patient Presumptive Charity Considerations Q&A 3

PPACA and Regulatory Reform Healthcare’s Transformation Event? • PPACA is transformational to healthcare – as with other industries – 1996 – Telecommunications Act – 1978 – Airline Deregulation – 1999 – Financial Services Modernization Act • Transition to be tumultuous • Consumerism – new factor 4

Trending Growth in Patient Responsibility $1404/Person • Patient OOP to exceed $460 Billion by 2019 – Hospital OOP >$35 B – Continues to outpace inflation and wage growth Source: CMS National Health Expenditure $778/Person Hospital All Other 5

Trending Insurance Premium Put Pressure on Families 62% of Employees with insurance spend $14, 000 or MORE on annual premiums for family coverage Source: Kaiser Francis Family Foundation, 2012 HEBS 6

Trending The steady but slowing march of HDHP 0% 20% 40% 60% 80% 100% 2005 0 % 4% 2006 2007 5% 2008 8% 2009 8% 62% Growth 2010 13% 30% Growth 2011 17% 2012 19% 12% Growth Conventional HMO PPO POS HDHP Source: Kaiser Francis Family Foundation, 2012 HEBS 7

Patient Attitudes toward Payment Balance Matters, Upside with Small Balance Patient Liability Willingness & Ability to Pay Typical Collection Rate <$500 92% 65% - 75% >$500 54% 50% - 60% Source: 2008 Mc. Kinsey consumer healthcare payment survey 8

Industry Trends Cost Up and Collections Down Over Time Cost to collect $1. 00 As receivables devalue over time the cost to collect increases. $0. 95 $0. 80 $0. 75 Cost to Collect $0. 60 $0. 50 $0. 40 $0. 25 $0. 20 $0. 05 Today 30 Days 60 Days 90 Days 120 Days 6 Months 1 Year Source: Relay. Health estimates & US Department of Commerce 9

Trending Broad Consumer Internet Access Strong usage across • ALL geographies • ALL incomes • ALL ages Source: Pew Internet & American Life Project, Generations 2010, 12/2010 10

Trending Online Account Management Online account management continues to grow across all demographics for all markets 70% Regularly Paying Bills Online By Age Group 60% 50% 40% 30% 20% 10% 0% 18 -33 34 -45 45 -55 55 -64 65 -73 74+ Growing 10 -14% per year Continued steady usage Source: Pew Internet & American Life Project, Generations 2010, 12/2010 11

Trending Broad Consumer Mobile Internet Access • 46% of Americans Own Smart Phones (11% YOY growth) • 66% 18 -29 age • 68% in $75 k+ households 12

Agenda Transformational Times Collecting Early is Easy… Right? The Financially Engaged Patient Presumptive Charity Considerations Q&A 13

Polling Question How are you doing with meeting your monthly pointof-service cash collection goals? (A) We don’t have a monthly cash collection goal. (B) We often fall short (C) We consistently exceed it 14

Primary Reasons for Patient Non-Payment 100% Lack of financing options 80% Just received statement 60% Forgot or confused 40% Should not have to pay 20% Other Reasons 0% <$500 >$500 Addressable Factors Source: 2008 Mc. Kinsey consumer healthcare payment survey 15

Barriers to Point-of-Service Collection Difficulty Estimating Cost 55% Constraints Related to Current Technologies 41% Difficulty gaining INTERNAL buy in to ask for payment at time of service 28% Difficulty accessing data from Payers 26% Constraints related to staff capabilities 22% Source: HFMA’s Healthcare Financial Pulse % indicating “ 4” or “ 5” on 5 -point scale where 5 = “extreme barrier” and 1 = “no barrier” http: //www. hfma. org/pulse/ 16

Emerging Revenue Cycle Model Moving from post-service Patient Accounting focus… 17

Emerging Revenue Cycle Model …to pre-service Patient Access focus to improve overall performance 18

A Road Too Far Not so Minnesota Nice… 19

Minnesota v. Accretive/Fairview “A hospital emergency room is a place of medical trauma and emotional suffering for patients and their families. It should be a solemn place, not a place for a financial shakedown of patients. ” Attorney General Swanson. 20

Not the kind of headlines you want… • Mother told to pay $500 before she could return to her daughter’s bedside. • Won’t discharge a newborn baby unless mother paid $800. Which she did and overpaid and had to fight for months to get the $800 back. • A pregnant mother who was asked to pay money in the emergency room in the midst of miscarrying her first baby. 21

The Social Network Effect 22

Finding the Right Balance • Tools – Most complete data – Defensible estimates • Training – Staff – Community • Monitoring – QA – Exceptions 23

Tools • Complete data – Physician Order Entry – Accurate & complete eligibility benefits • Defensible collections – Co-Pay – Percentage of Deductible Deposits – Patient Specific Estimates 24

Training • Interpersonal Communication Skills • Revenue Cycle 101 for Front End Stafff – What is a Copay and how do you find it? – What is Co-insurance and how is it calculated? – What is a Deductible and what does it tell you? – What is a High Deductible Plan and is it scary? • How does my role fit into the big picture… 25

Community Education • Community Outreach example: Newman Regional Hospital, Emporia, KS • Principals • Policy • Practices http: //www. emporiagazette. com/news/2012/ aug/31/because-you-asked-nrh-charity-care/ 26

Monitoring • The Registration Quality Assurance Renaissance • Disparate systems (Bolt On) – Three to Four Primary Vendors – Some acquisitions, but most are independent • Qualities to look for – Rules Based, Measure Quality & Collection – Real Time & Batch Integration – Proactive Staff Reminders – Individual Report Cards 27

Agenda Transformational Times Collecting Early is Easy… Right? The Financially Engaged Patient Presumptive Charity Considerations Q&A 28

What Is a Financially Engaged Patient? • Understands their treatment • Understands their responsibilities • Is not surprised • More likely to pay their bills • Engages in ongoing, online communication with provider 29

We’ve been doing this… Traditional “patient checklists” focus is being clinically ready for an encounter… 30

We also need to be doing… New patient checklists help bring focus to the financial readiness and help create the Financially Engaged Patient… 31

Together = “Engaged Patient” When combined the Financially Engaged Patient is more likely to: • Understand their treatment • Understand their responsibilities • Not be surprised • Meet their financial obligations 32 32

Verify Every Patient “Verify” = more than just eligibility 33

Stratify and Verify Every Patient Pre. Service 34

Polling Question Do you provide pre-service out-of-pocket estimates today? (A) We do not create any pre-service estimates for patient. (B) We do estimates for select services, but don’t try to collect. (C) We do estimates for select services, and use the estimate to determine how much we collect. (D) Estimates and collections are standard operating practice for us. 35

Maximize collections from those that can pay… Precise calculation of patient financial obligation – Contract driven – Patient driven Location, Provider and Patient Specific – Physician Preference – Variable Length of Stay – Location specific Benefits: – – Create credible estimates Move beyond “flat rate deposits” Make payment easier and more feasible Increase Patient Engagement and patient satisfaction 36

Improve collections from those that can pay… Use Patient-Friendly Communication – All language should be relevant, clear and targeted – Use best practice design to ensure print statements are easy to read Provide financial payment plans – Offer recurring payment plans – Utilize pay-in-full or early pay discounts Offer Online Payment Options – Leverage consumer preferences – Help patients engage clinically and financially – Strengthen relationships with patients to facilitate sense of obligation and urgency to pay 37

Stratify and Verify Every Patient Pre. Service 38

Collecting Critical Information Up To 31% Self-pay bad debt written off that meets standard charity-eligibility guidelines. Empower staff to: – Start or complete screening and enrollment process – Obtain completed and signed charity application at registration – Go Mobile Improving: Add mobility to improve collection of time sensitive data – Self-pay / Charity classification – Reducing escalations to Financial Aid Counselor – Improve patient experience 39

Agenda Transformational Times Collecting Early is Easy… Right? The Financially Engaged Patient Presumptive Charity Considerations Q&A 40

Polling Question Do you today use a “Presumptive Charity” process to assign charity status to patient accounts? (A) I’m not really sure what “presumptive charity” is. (B) We are familiar with it, but don’t use it. (C) Yes – we use patient’s FICO score. (D) Yes – we use a vendor’s product/process. 41

Charity Drivers • IRS 990 – Schedule H • Community Benefit and Charity Care Valuation • Must separate charity from bad-debt 42

More Headlines… that no one wants Some Illinois Hospitals Losing Tax-exempt Status • Insufficient Community Benefit • $1. 2 M Property Tax Assessment 43

Presumptive Charity Key Considerations Timing (i. e. , when to assign charity status) “Process” Options – Traditional Credit Score – Income Predictors – Manual Review – Custom Charity Criteria 44

Too Early? To Late? Charity too early, and you can’t collect from a patient or third-party (Medicaid) down stream… Charity too late and you’ve adding expenses that may have a low rate of return…. AND forego collections/recover revenue… 45

Presumptive Charity Progressively Better Data Custom Charity Care Criteria • • Automate the manual review Easily understood (hospital specific) Objective and defensible 100% coverage Best Approach Manual Review of Credit File • • Intuitively correct Labor intensive – not scalable Problem with “no hits” Subjective Income Predictors • Directional, not absolute • Problem with “no hits” • Black box (i. e. , vendor proprietary process) Traditional Credit Score • Should never be used • Measures character not ability to pay • Millionaire late on Tiffany’s bill – low score Limited Approach 46

Presumptive Charity How to make the right choice? • There is no substitute for verified information. • Timing is key decision – culture and cost. • Important vendor considerations – Does their process intuitively make sense? – Is process open or proprietary? – Is process objective or subjective? – Is it defensible? – Can you describe it to your boss? 47

Agenda Transformational Times We Have Seen The Enemy – and it is us What Is a Financially Engaged Patient? Presumptive Charity Considerations Q&A 48

Thank You! Kim Thompson David Dyke 607 -547 -3506 918. 481. 4291 Kim. Thompson@Bassett. org David. Dyke@Relay. Health. com www. bassett. org www. relayhealth. com @Bassett. Network on Twitter @Relay. Health on Twitter 49