Patient Engagement Strategies: Collect or Charity

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

Your Presenters • Kim ThompsonPatient Access Manager at Basset Healthcare Network • David DykeVP Revenue Cycle at RelayHealth

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

PPACA and Regulatory ReformHealthcare’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

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

TrendingInsurance 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

TrendingThe steady but slowing march of HDHP 62% Growth 30% Growth 12% Growth Source: Kaiser Francis Family Foundation, 2012 HEBS

Patient Attitudes toward PaymentBalance Matters, Upside with Small Balance Source: 2008 McKinsey consumer healthcare payment survey

Industry TrendsCost Up and Collections Down Over Time As receivables devalue over time the cost to collect increases. $1.00 $0.95 $0.80 $0.75 Cost to Collect $0.60 $0.60 Cost to collect $0.50 $0.40 $0.25 $0.20 $0.05 Today 30 Days 60 Days 90 Days 120 Days 6 Months 1 Year Source: RelayHealth estimates & US Department of Commerce

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

TrendingOnline Account Management Online account management continues to growacross all demographics for all markets Growing 10-14% per year Continued steady usage Source: Pew Internet & American Life Project, Generations 2010, 12/2010

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

Polling Question How are you doing with meeting your monthly point-of-service cash collection goals? • We don’t have a monthly cash collection goal. • We often fall short • We consistently exceed it

Primary Reasons forPatient Non-Payment Addressable Factors Source: 2008 McKinsey consumer healthcare payment survey

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/

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

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

A Road Too Far Not so Minnesota Nice…

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.

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.

The Social Network Effect

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

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

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…

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/

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

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

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

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

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

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

Stratify and Verify Every Patient PreService 34

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

Maximize collections fromthose 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

Improve collections fromthose 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

Stratify and Verify Every Patient PreService 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: • Self-pay / Charity classification • Reducing escalations to Financial Aid Counselor • Improve patient experience Add mobility to improve collection of time sensitive data

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

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

More Headlines…that no one wants Some Illinois Hospitals Losing Tax-exempt Status • Insufficient Community Benefit • $1.2M Property Tax Assessment

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

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…

Presumptive CharityProgressively 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

Presumptive CharityHow 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?

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

Thank You! Kim Thompson 607-547-3506 Kim.Thompson@Bassett.org www.bassett.org @BassettNetwork on Twitter David Dyke 918.481.4291 David.Dyke@RelayHealth.com www.relayhealth.com @RelayHealth on Twitter

Patient Engagement Strategies: Collect or Charity