Revenue Cycle Challenges with Collections April 27, 2012

1. Revenue Cycle Challenges with Collections April 27, 2012 Presenters: Jim Christensen, CEO, J.C. Christensen & Associates, Inc. Wendy Badger, Director of Corporate Compliance, ECMC Group

2. Array Services Group Family of Companies Ranks in the top 2% nationally among all agencies in placements, size and recoveries with more than 30 years service to the Healthcare Industry. 15 years of professional outsourcing experience with hospitals, clinics and specialty groups – 50% revenue growth in the past two years. - Revenue Cycle Specialists - System Conversions - Complete billing office outsourcing - Customized revenue cycle programs for client needs Providing contact center solutions to hundreds of clients across multiple industries helping them improve customer satisfaction and retention. 2

3. Strategic Issues 3

4. Healthcare Provider Self Pay Strategic Issues • Healthcare Reform Impact • Increasing Self Pay Volumes • Lack of Available Capital for IT and Full-Time Employees (FTE’s) • Media and Regulatory Scrutiny • Increasing Uncompensated Care • Tight Margins and Reduced Reimbursement 4

5. Healthcare Provider Self Pay Strategic Issues • Improve IT Capacity • Collection Systems • Dialers • Call Recording • Caring, Compassionate and Competent Collection Approach • Use of Data Analytics - Work smarter • Improved Security and Compliance 5

6. Healthcare Provider Self Pay Strategic Issues • Increase Outsourcing Capacity • Bad Debt • Self Pay • Medicaid Eligibility • Payment Monitoring • Debt Purchasing • Insurance Resolution • Business Office Outsourcing • Debt Warehousing 6

7. Revenue Cycle Trends 7

8. Current Healthcare Revenue Cycle Trends • Growing levels of uninsured/underinsured – creating higher level of private pay receivables which are less collectible • Higher costs resulting in a greater percent of national expenditures related to healthcare • Growing numbers of E/D visits • Growing levels of bad debt E/D • Current economic conditions exacerbating situation • Increased pressures on healthcare providers to operate efficiently 8

9. Healthcare Industry Trends • Economic Downturn & Impact on Healthcare • Unemployment has grown markedly over the past years with a resultant loss of employer-sponsored health insurance • With many states facing budget shortfalls, programs such as Medicaid, which comprise nearly a quarter of state spending, are a target for budget cuts • Fiscal recovery at the state level is expected to remain slow as property, sales, and income tax revenues are not expected to recover in the near term • Premium increases have lowered the number of people carrying insurance or increased deductibles which are harder to meet 9

10. Healthcare Industry Trends • Operating Pressures - Healthcare • In 2008, healthcare providers received payments of only 91 cents and 89 cents for every dollar spent (not billed cost) caring for Medicare and Medicaid patients, respectively • Healthcare providers have experienced an increase in uncompensated care costs as a result of the economic downturn • 96% of respondents said their healthcare organization is experiencing a rise in the uninsured/underinsured patient population (TransUnion Study) 10

11. Healthcare Industry Trends • Operating Pressures - Healthcare • More than half of Healthcare provider’s revenues come from Medicare and Medicaid • Medicare and Medicaid payment rates already fall short of healthcare provider costs 11

12. Communication Regulations 12

13. Telephone Consumer Protection Act of 1991 • Legislative intent was to curb telemarketing and avoid transferring the costs to consumers • Primary federal law governing the use of autodialers and prerecorded messages • FCC regulations implement the TCPA • Requirements vary • Telemarketing/solicitation calls vs. non solicitation calls • Residential vs. wireless number calls 13

14. Definitions • Automatic telephone dialing system – equipment which has the capacity to store or produce telephone numbers to be called using a random or sequential number generator and to dial such numbers • Telemarketing – initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person • Telephone solicitation – initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person, but does not include a call or message • To any person with their express invitation • To any person with whom the caller has an EBR • By or on behalf of a tax-exempt non-profit organization 14

15. Autodialers and Prerecorded Messages • Restrictions for telemarketers only • Ring duration • Call abandonment • Do not call registry • Restrictions for all users • Prerecorded messages (certain exceptions) • Prerecorded message requirements • Calls to wireless numbers • Caller ID requirements 15

16. Prerecorded Messages to Residential Lines • Prohibition on placing prerecorded message calls to consumer’s residential number without prior expressed consent • Exceptions • Call made for an emergency purpose • Call for a non-commercial purpose • Call made for commercial purpose, but does not include an unsolicited advertisement • Unsolicited advertisement – any material advertising the commercial availability or quality of any property, goods, or services, which is transmitted to any person without that person’s prior expressed permission or invitation • Established business relationship between calling party and the consumer • Call made by tax-exempt nonprofit organization 16

17. FCC Declaratory Ruling • Issued January 4, 2008 • A debt collector is permitted to place autodialed or prerecorded message calls to consumer’s wireless number of behalf of creditor if consumer has provided expressed consent to creditor to be contacted on his/her wireless 17

18. Prerecorded Message Identification • All artificial or prerecorded messages • must state: • Registered name of business initiating call • Debt collector exemption • Telephone number (other than that of the autodialer or prerecorded message that placed the call) of business 18

19. Collector Challenges

20. Default/Delinquency Definitions • FDCPA does not apply when “not in default” • Pre-collect • Early out • Soft Collection • FCRA Date of Delinquency • Dictates how long information stays on report • Three ways to identify 20

21. Adding Fees • FDCPA prohibits: • Collecting any amount unless expressly authorized by the agreement creating the debt or permitted by law; • Falsely representing the character, amount or legal status of any debt; and • Communicating or threatening to communicate credit information which is known or should be known to be false • FCRA amount of debt – accurate and complete 21

22. Credit Reporting • Accessing credit reports • Permissible purpose • Consumer transaction • State laws • Reporting negative information • Notification to consumer • State laws 22

23. Electronic Communication • Websites • Terms and conditions • Consent to email, call, etc. • Email • Text Messages • Social Media • Facebook • Twitter 23

24. Indemnification • Despite the protections in the agreement between the consumer and the creditor, you get sued. You turn to the indemnification provision in the collection services agreement: • Mutual indemnification • Practical implications – what does this mean? • Thinking outside the box 24

25. Telephone Consumer Protection Act • Prior Express Consent Required: • Call cell phone with auto-dialer • Leave pre-recorded message (residential and cell) • Solutions • Consent • Cell phone scrubbing • Maintain original paperwork 25

26. Questions? • Thank you for your time • Additional questions? Jim Christensen, CEO Wendy Badger jimchristensen@arraysg.comwbadger@ecmc.org 320-534-3325 651-325-3652 26