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Collecting Every Dollar – Contract Management & Collecting from

Patients

March 14, 2014

2©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.

Introductions

©2012 Experian Information Solutions, Inc. All rights reserved.Experian Confidential.


Economics of self-pay

Maximize Revenue with Contract Clarity

5 tips for increasing self-pay patient collections

► Develop custom collections strategies

► Analyze in-depth reporting and benchmarking

► Evaluate in-house and agency collections performance

► Monitor patient financial status insights

► Manage the outsource crossroads

Impacts and lessons learned

Questions and answers

Today’s Discussion


Less Revenue, More Work



Economics of Self-PayIncreasing Patient Responsibility


11 million people will be covered by Medicaid or CHIP1

25-28 million people will be covered in the health insurance exchanges (high deductible health plans)1

Hospital readmission penalties – reduced revenue

Value based purchasing program – reduced revenue

Insurance carriers taxes for ACA passed onto providers and patients

Economics of Self-PayAffordable Care Act

1Source: CBO. “Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision.” July, 2012.

$155 billion in provider payment cuts to Medicare over 10 years to pay for the legislation


Economics of Self-PayFederal Deficit Spending Cuts

Source: Office of Management and Budget. “More than Half of All Federal Spending Will be on Entitlement Programs in 2012.” heritage.org. 2012.


For FY13, federal government expects to collect $2.9 trillion

FY13 estimated budget spending at $3.8 trillion

Mandatory programs such as Social Security, Medicare and Military retirement benefits are estimated to cost $2.293 trillion in FY13

Social Security is currently funded today

Medicare is underfunded as Medicare taxes do not pay for all of the benefits


Source: U.S. Budget Breakdown, Understand All the Components of the Current Budget, Kimberly Amadeo, About.com, February 20, 2012

$0.00

$1.00

$2.00

$3.00

$4.00

FY13 Budget FY13 Revenue ManadatorySpending Programs

$3.80 $2.90 $2.29 $T

rill

ion


January 2013 Deficit Deal – over next 10 years, additional $30 billion reduction in reimbursements

► $15 billion in Medicare cuts over the next ten years (physician SGR fix)1

► $10.5 billion overpayment recoupment over next three years1

► Medical disproportionate share payments to rural hospitals of $4.2 billion over the next decade1

► $4.9 billion reduction in end stage renal disease funding over the next decade1

March 2013 Sequester

► 2% cuts in Medicare payments to all providers estimated at $10 billion over the next year2


1Source: Kaiser Health News. Jordan Rau. “Behind the Fiscal Cliff Deal, a Prolonged Hospital Finance Fight.” January 2013. 2Source: California Medical Association. “Sequestration FAQ, How Will the Cuts Affect California Physicians?” March 2013.



Obama proposes $400B in Medicare payment cuts over the

next decade for his FY 2015 budget


Economics of self-payOutlook for providers

Increasing consumer liability

Declining insurance payments

Increasing cost pressure

Negative financial

pressures

Increasing consumer out of pocket

Rising deductibles

Medicare costs rising and reimbursements dropping

Declining margins while patient copays are increasing

Aging populations / baby boomer effect

Increasing chronic disease costs

$200 Billion cut from federal reimbursements

Estimated that 30% of

revenues will come from patient out of pocket


Maximize Revenue with Contract Clarity



Improve Payer Contract Performance

Improve Payer Contract performance by verifying the accuracy of payment received from third-party payers

Validate Reimbursement Accuracy

Monitor payer compliance with contract terms Value claims and audit remittance based on the latest payment

rules and adjudication logic

Recover Underpayments

Conduct contract-based appeals and recover lost revenue Identify sources and patterns of errors so any recurring issues

can be promptly resolved

Maximize Revenue with Contract ClarityContract Management


Category CPT RangeClaim Error Rate

Nat’l Average

Radiology 70000-79999 14.8% 4.1%

Path/Lab 80000-89399 13.9% 4.5%

Medicine-Immune/Vac/Inf 90000-90799 15.8% 3.7%

Medicine-Psychiatry 90800-90899 21.8% 7.0%

Medicine-Dialysis 90900-90999 13.1% 4.5%

Medicine-Gastroenterology 91000-91299 18.7% 6.7%

Medicine-Ophthalmology 92000-92499 21.2% 3.8%

Medicine-ENT 92500-92700 24.8% 3.4%

Medicine-Cardiovascular 93300-93990 18.4% 4.2%

Medicine-Pulmonary 94000-94799 17.6% 4.6%

Medicine-Allergy 95000-95199 16.0% 2.3%

Medicine-Neurologic 95800-95975 15.1% 3.4%

Medicine-CNS 96000-96155 13.7% 4.0%

Medicine-Chemo 96400-96549 14.2% 4.2%

Medicine-Dermatology 96900-96999 33.5% 11.7%

Phys Medicine, Rehab & Osteo 97000-98943 16.3% 3.4%

Special Services-Generic 99000-99142 18.9% 5.4%

E&M 99201-99499 19.8% 1.9%

Category CPT RangeClaim Error Rate

Nat’l Average

Anesthesia 00100-01999 26.5% 6.1%

Integumentary 10000-19999 18.7% 6.1%

Musculoskeletal 20000-29999 18.8% 5.7%

Respiratory 30000-32999 21.0% 4.9%

Cardiovascular 33000-37799 19.2% 6.8%

Lymphatic 38000-38999 19.4% 7.8%

Mediastinum 39000-39999 21.5% 5.5%

Digestive System 40000-49999 16.9% 4.6%

Urinary 50000-53999 16.9% 6.9%

Male Genital 54000-55899 18.6% 5.5%

Intersex Surgery 55900-55999 0.0% 0.0%

Female Genital 56000-58999 16.4% 3.5%

Maternity 59000-59999 13.0% 2.1%

Endocrine 60000-60999 18.8% 3.4%

Nervous 61000-64999 17.9% 5.6%

Eye 65000-68899 23.4% 6.9%

Ear 69000-69989 15.8% 4.7%

Microsurgery 69990 10.6% 4.4%

National Underpayment Rate 3.0%

Maximize Revenue with Contract ClarityContract Management


Negotiate More Favorable Terms

Model proposed contract terms and tailor your negotiation strategies to the factors that impact reimbursement the most

Strategically evaluate overall contract performance and assess the potential introduction of new lines of business

Leverage claim logic and historical claim data Accurately value claims by taking into account all line items and

associated claims, bundling and payment rules Apply a proposed contract change to your actual historical service mix

& entire claims history to get a more precise picture of the impact

Analyze the financial impact of policy changes

Any potential new policy changes should be compared to your actual historical service mix, to determine the financial impact

Maximize Revenue with Contract ClarityContract Analysis


Best Practices for Increasing Self Pay Collections


Patient Data Insight

Advanced Reporting &

Analytics

Communication Strategies


Tip #1 – Develop custom collections strategies

Tip #2 – Analyze in-depth reporting and benchmarking

Tip #3 – Evaluate in-house and agency collections performance

Tip #4 – Monitor patient financial status insights

Tip #5 – Manage the outsource crossroads

5 Tips for Increasing Self-Pay Patient Collections



Tip #1 - Develop Custom Collections StrategiesScreen Patient Accounts

Bankruptcy; 1.70%Deceased; 0.30% Insurance; 3.20%

Charity; 27.00%

Cleansed AR; 67.80%


Tip #1 - Develop Custom Collections StrategiesSegment Patient Accounts

Prioritize receivables with a highly predictive healthcare collections score to prioritize inventory and produce optimal segmentation and treatment strategies.

What is it?

10% of accounts make up 50% of self- pay revenue

50% of accounts make up 90% of self- pay revenue

Work most collectable accounts first to accelerate cash

Why is it important?

How does it work?

50%-85% increase in collections per account for high segments vs. simple segmentation

Up to 2-4% negotiable reduction in agency contingency fees

Significant reduction in cost to collect

What is the value?

He

alth

care

sco

re

2

1

3

4

Op

tima

l strate

gy

Cleansed

A/R


Credit data model

Based on credit report data

Higher no hit rate

Behavioral model

Uses account-level payment data

Takes months to truly perfect the model

Demographicmodel

Uses demographics data

Not as precise and higher hit rates than credit data

Optimalmodel

The optimal model uses all three above to maximize predictiveness and collections




High Profit AccountsLow Profit Accounts


Segment 1 (most collectable) represents 10% of the accounts and 50% of the revenue Segments 1 and 2 represents 50% of the accounts and 90% of the revenue



Segment

Number of Accounts

% of Accounts

Initial Patient Responsibility Total Payments

Avg Initial Patient Responsibility Avg Payments

Recovery Rate

Segment 1 7,852 19.63% $645,027.46 $458,588 $82.15 $58.40 71.10%

Segment 2 4,411 11.03% $7,078,861.34 $2,195,787 $1,604.82 $497.80 31.02%

Segment 3 8,556 21.39% $26,209,369.22 $1,473,026.00 $3,063.27 $172.16 5.62%

Segment 4 7,517 18.79% $15,441,376.84 $397,309 $2,054.19 $52.85 2.57%

Segment 5 11,664 29.16% $19,525,497.01 $170,650 $1,674.00 $14.63 0.87%

Grand Total 40,000 100.00% $68,900,131.87 $4,695,360.00 $1,722.50 $117.38 6.81%



Once segmented, assign and transfer accounts to the most appropriate internal or external servicing channel. Reconcile inventory and recall accounts.

What is it?

Assigns accounts to in-house or external agency that is best positioned to collect that type of account

Ability to quickly add/replace agencies

Better inventory management through real-time reconciliation


How does it work?

Improved recovery rates due to using most effective collection channels

Elimination of reconciliation costs and errors

Reduction in IT and file management costs due to automated transfers

What is the value?

In-houseAgency

1

Agency 2

Agency 3

Tip #1 - Develop Custom Collections StrategiesRoute Patient Accounts


Experian HealthcareData Feeds for scoring, collection triggers reconciliation & Agency offloading

AR File for Scoring &

Segmentation

AR Feed

SegmentUpdate

Segment 1(High, Med-High)

Segment 2(Medium)

Segment 3(Med-Low, Low)

Outsourced to Early Out Day 45



DataFeed

Agency

DataFeed

Agency

DataFeed

Agency

PrimaryBad Debt

Agency

Active A

R C

ycle Co

mp

lete

DataFeed

Agency

Sample Account Routing Workflow Optimization

Tip #1 - Develop Custom Collections StrategiesRoute Patient Accounts


Tip #1 - Develop Custom Collections StrategiesAccount Routing Workflow Optimization

Basic

• Charity & Medicaid

• Return mail

Intermediate

• Segmentation code

• Call file in-house group

Advanced

• Complete agency routing

• Payment & adjustment

Example


Collect the dots by capturing the right information

Connect the dots by leveraging the data

Decipher the dots to transform data into actionable information

Tip #2 – Analyze In-Depth Reporting & BenchmarkingManage Account Performance



Tip #2 – Analyze In-Depth Reporting & BenchmarkingManage Account Performance

Detailed provider reporting

► Payer scorecard

► A/R aging report

► A/R inventory report by site

► Payment plan analysis reporting

► Return mail analysis reporting

► In-house performance & inventory reports

► Segmentation performance & inventory reports

► Executive dashboards


Benchmark against organizational and industry metrics

Analyze effectiveness of in-house and agency collections

Monitor agency performance and access performance reports

Agency Monitor Benchmark Scorecard DATA &ANALYTICS

Experian’s Agency Management Platform

EXPERAIN HEALTHCARE

Tip #3 – Evaluate In-House and Agency PerformanceManage Agency Performance



Tip #3 – Evaluate In-House and Agency PerformanceManage Agency Performance

Detailed agency reporting

► Agency production reports

► Dynamic agency reconciliation

► Agency inventory reports

► Collection analysis

► Performance & contact reports

► Account monitoring performance reporting

► Executive dashboards


Perpetually monitor unpaid accounts for changes in a patient's ability to pay and timely updates to contact information.

What is it?

Immediate notification when patient’s ability to pay has changed

Important to quickly contact patient to get “wallet share”

Aged inventory usually doesn’t receive much attention


How does it work?

150%-200% increase in collections per triggered account

2-3% of consumers have some sort of impacting change to their contact information or ability to pay per month

Increased collections in aged inventory

What is the value?

Updated address/ phone

New job

Paying off debts

Tip #4 – Monitor Patient Financial Status InsightsMonitor Unpaid Patient Accounts


No ability to pay

Diminishing ability to pay High ability to pay

A Patient’s Cycle of Delinquency

Patient overextended

Health issues

Job lossBankruptcy Employment

Paying off debts

Shopping for credit

New credit line

Be immediately notified when a patient’s ability to pay changes




Trigger Description Recovery RateNew Auto Lease 11.60%New Home Equity Loan 10.79%New Mortgage Loan 10.19%Bankcard - Secured Line 9.02%Flexible Spending - Bankcard 8.69%Bankcard - Revolving Terms 7.30%Closed Zero Bal was 150 6.63%Paid Collection 6.45%Home Equity Inquiry 6.40%New Bank/Credit Card 6.30%Settled 6.25%New Retail Loan 4.98%


Insourcing Model

Keep all collection activities in-house. Dedicated staff

members.

Co-Source Model

Top tiered accounts are kept in-house. Middle Tier

accounts are sent to outsource vendor.

Outsourcing

Complete outsourcing of early out collection

activities any where from day 1-60. Activity done in the name of the provider.

The outsource crossroads


Determine appropriate staffing levels


Work underpayments aggressively to collect the missing payments

Determine the financial impact of contract and/or policy changes to reimbursement

Self-pay dollars will become a main component to profitability

Become an expert at collecting self-pay dollars – Expertise is available

Develop a seamless and flexible collections strategy

Screen patient accounts for bankruptcy, Medicaid eligibility and charity

Segment patient accounts to determine which accounts to target first

Route patient accounts to the most effective collections team

Analyze the performance of internal collections staff and outside vendors

Monitor unpaid patient accounts for changes in financial situations

Determine the appropriate staffing levels

Technology does not have to be a deterrent to working accounts internally

Determine where you are at today and where you want to go for next steps

Impacts and Lessons Learned


Questions and Answers


Thank You

Shawn YatesVice President, Consulting Services

[email protected]

www.experian.com/healthcare

©2013 experian information solutions, inc. all rights reserved. experian and the marks used herein...

Documents

experian public

experian confidential

patient responsibility

selfpay patient collections

patients economics of

pay affordable care

federal spending

budget spending