We’re not in Kansas anymore!

1. We’re not in Kansas anymore! Healthcare has changed and we need courage, knowledge and a big heart to survive the change!

2. How did we get here Toto? CMS MEDICARE Changes the rules to restore $60 billion to the Medicare Trust Fund • DRA – Deficit Reduction Act 2005 • Created Medicaid Integrity Program (MIP) • Dramatically Increased Resources of CMS & HHS-OIG to Fight Medicaid Fraud • Funding - $560M over 5 Years • Medicare Contract Reform (MCR)

3. How did we get here Toto? Medicare Contract Reform (MCR) • POA’s – Present on Admission Indicators • HAC’s – Hospital Acquired Conditions/Infections • RAC’s – Recovery Audit Contractors • MAC’s – Medicare Administrative Contractors MS-DRG’s – from 500+ to 745 • Adds Severity Levels • DRG w/ no cc/mcc – $2500 • DRG w/cc - $3500 • DRG w/cc & mcc - $5000

4. How did we get here Toto? • In Georgia – Bottom Lines began to shrink due to: • 2008 – Medicare Changes Bad Debt Rules BCBS of GA– Ruled - No more bad debt write offs on active accts. • 2009 – SHBP Plan Changes to High Deductibles • - CAHABA Part A – MAC on May 4th • - Medicaid Reimbursement cuts – 5% • - Connolly RAC coming in August 09

5. Growing Uninsured • For the sixth consecutive year, the number of Americans living without health insurance has risen, according to new U.S. Census Bureau data. Approximately 2.2 million people were added to the uninsurance rolls in 2008. • Annual Census Bureau estimates released in August show 47 million people, or 15.8 percent of the U.S. population, are without health insurance

6. Growing Uninsured Rank   StatesAmount # 1   Texas: 825,635  # 2   Florida: 630,042  # 3   Pennsylvania: 408,822  # 4   California: 394,784  # 5   Georgia: 360,563  # 6   New Jersey: 291,238  # 7   Maryland: 263,616  # 8   Michigan: 258,653  # 9   Virginia: 245,525  # 10 North Carolina: 231,465 

7. Growing Underinsured • DEFINITION • Having insufficient insurancecoverage. http://www.investorwords.com/5122/underinsured.html

8. Growing Underinsured • "It's harder to define the underinsured," Collins said of the The Commonwealth Fund, who defines underinsured as those who incur high out-of-pocket costs - excluding premiums - relative to their income, despite having coverage all year. Using that measure in consumer surveys, Collins' firm estimates that 25 million adults under age 65 were underinsured in 2007. More importantly, Collins pointed out that the number of underinsured increased 60% from 2003 to 2007. That compares with a 5.1% increase in the number of uninsured Americans - to about 46 million - over the same period, according to the U.S. Census Bureau. "The 25 million [number] can still be an underestimate," Collins said.

9. Growing Underinsured • What's also troubling, she said, is that the ranks of the underinsured are spreading across income levels and have seen the most rapid increases lately in middle-income households earning between $40,000 to $60,000.

10. SHBP Changes • New plans effective 1/1/2009 – SHBP • Offers only two options to new employees • HDHP – High deductible Health Plan • HRA – Health Reimbursement Account • HDHP with United & Cigna • Single Deductible - $1150 • FAMILY with 2 children - $2300

11. The Bad Witch RESULT: Increasing Bad Debt and Uncollectible Self Pay Balances

12. So What Is the Answer? CHANGE!! Remember the Definition of Insanity?? Doing the same thing over and over and expecting different results!

13. So What Is the Answer? CHANGE!! Remember the Definition of Insanity?? Doing the same thing over and over and expecting different results!

14. So What Needs to Change? Processes Are your current processes effective? How are you managing self pay? Are you getting the same collections rate on 20% of your Self Pay A/R as you were when it was only 10%??

15. Example In 2007 10% of $5 Million A/R = Self Pay $500,000 sent to Early Out Vendor Collections Rate – 10% = $50,000 In 2009 20% of $5 Million A/R = Self Pay $1 Million sent to Early Out Vendor Collections Rate – 10% = $100,000 $900,000 Written Off

16. End of Part One Part Two CMS has changed the meaning of the term - BAD DEBT - So now what do we call it? - The new definition is Early Out - Done the Right Way - Patty Rowland, DAS

17. End of Part Two BREAK Part Three How Does the Hospital Manage the New Early Out Process to Increase Overall Collections? - Tracey Frederick at Southern Reg Med Center

18. Part Four So How Do We Get Started?   Review Process Mapping Tool, Results Tracking Tools, New Policies & Procedures, Benchmarks - Kathy Whitmire

19. The Good Witch GA HFMA HomeTown Health DAS With the Solutions to help you make the necessary changes!

20. Map Your Current Processes LEAN – Six Sigma There has probably never been a process map developed where someone has not said, "Do we still do that?" or "Why does X happen there?" or "Why are we doing it that way?" or "I did not realize...."

21. Process Mapping Tools

22. New Policies & Procedures Integrate Process changes into Policy & new procedure including: -Screening for ability to pay or Credit score -Payment Arrangements on all balances due with signed promissory note -Better Identification of Accounts - Financial Class or Category -More Timely Placement -Monthly reporting on collections

23. Benchmarks Early-out Vendor Benchmarks • Contingency rates range between 7% - 12% • Recovery rates range between 8% - 25%. Know your area. • Track / Trend data monthly

24. Create A Strategy for Success Map Your Current Processes Analyze your current results Set a goal for improvement Check out new solutions Outsource to a proven vendor Track your Results!!

25. Best Practices Success Stories & Best Practices Questions & Answers THANKS FOR BEING A PART OF TODAY’S MEETING!!!