True Cost of Limited Liability and High Deductible Plans November 6, 2009

1. True Cost of Limited Liability and High Deductible Plans November 6, 2009

2. Learning Objectives • What is the long term viability and marketability of such products? • What is the financial impact to participating providers? • How should providers analyze risks of these products? • How effective are providers in tracking patients with these types of products? • Are there strategies for dealing with the growing volume of higher patient liability products?

3. Discussion Themes • Environment • Management • Contract • Process • Resolution

4. Environment • Did limited liability and high deductibles benefit offerings exist ten years ago? • Has the volume of limited liability and high deductible accounts increased? • Is the volume of limited liability and high deductible accounts aligned with a certain product offering? • Are patient liabilities correlated with select services? • Do providers/payers see these products growing in the future?

5. Management • Is the role (scope) of contract team clearly defined? • Do you have objective contract performance metrics? • Do you typically get involved in collections and accounts receivable liquidation? • Is success a function of negotiation skills? • Has the financial impact of limited liability and high deductible offerings been quantified? • Is limited liability and high deductible offerings a top priority? • Have limited liability and high deductible offerings adversely impacted portfolio yield?

6. Contract • Do your contracts restrict access based on product or benefit design? • Is there a correlation between benefit design and provider contract rates? • Are products and benefit design clearly defined? • Are there justifications for non-payment? • What are your top three contract language provisions?

7. Process • Are all payers mapped within financial system? • Is an accurate expected payment computed on each account? • Is patient liability segregated from insurance payable in patient accounting system? • Is there a prompt payment notification protocol? • Are payment discrepancies identified upon EOB receipt? • Is there a clear definition for limited liability and high deductible account tracking? • Are there processes in place to capture payment at time of service? • Are these product types changing the patient/provider relationship?

8. Resolution • Have you been successful in resolving payment issues with contract language amendments? • Are payers aware of the providers concerns? • Are payers able to resolve the patient liability collection shortcomings? • Have your ever provided the insurance company a patient specific report of delinquent patient accounts? • Does the employer/member subscription agreements require patient compliance as a term of participation? • Was the demand for limited liability and high deductible plans at the request of the member?

9. Mental Justifications • Product differentials • Audit • Offset • Administrative denials • Pre-certification requirements • Concurrent review • Incorrect coding • Poor documentation

10. Strategic Pricing or Negotiation • Population (Segmentation) • Groupings • Clinical (Severity) • Acute Care (Predictability) • Patient Direct Expenses (Volatility) • Efficiency (Correlation) • LOS • Technology • Patient Liability • Payment Logic • Effectiveness (Validation)