Health Care Reform:The Impact on A/R Performance

August 29, 2012

2

Healthcare Reform: Summary of Changes 1

3

4

Measuring Outcomes

5

Crossroad – Buy or Build?

Does it Matter to You … In-house vs. Partnering?

www.hbcs.org

Agenda

2 Typical Challenges

6

7

How Does it Work?

Things to Look For

www.hbcs.org 3

Summary of Changes■ Largest overhaul since ‘Care and ‘Caid in 1965■ Law calls for:

■ Insurance Industry reform■ Mandates coverage for most Americans■ Creates more insurance options■ Expands Medicaid

Health Care Reform

Source: “The Essentials of Healthcare Reform, Sarah Densmoore,

www.hbcs.org 4

What does this mean to you?

■ Industry:

■ Stress from the unknown

■ Increased burden on patient

■ Higher deductibles / co-pays

■ Financial:

■ Increasing cost to collect

■ Cost shift to front-end focus

■ Costly technology

■ Business Office:

■ Need to do more with less

■ Increased Turnover

■ Costly training & re-training

■ Reporting, Processes

■ Technology:

■ Multiple systems / platforms

■ System conversions

■ Data collection / consolidation

Typical Challenges…

www.hbcs.org 5

The patient is experiencing…

■ Shift to high-deductible consumer directed health plan

■ Increased out-of-pocket maximums

■ Increased share of premium costs

■ Cutting back / delaying medical care

Despite Health Care Reform

www.hbcs.org 6

Notes: Health insurance premiums and worker contributions are for family premiums based on a family of four.

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2011. Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 1999-2011. Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 1999-2011 (April to April).

Cumulative Increases in Health Insurance Premiums, Workers’ Contributions to Premiums, Inflation, and Workers’ Earnings, 2000-2010

Every year since 2000:

Premiums increased between 3 - 13%

Earnings increased within 2 - 4% range

www.hbcs.org 7

Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ .

Notes: This figure omits national health spending that belongs in the categories of Other Public Insurance Programs, Other Third Party Payers and Programs, Public Health Activity, and Investment, which together represent about 20% of total national health spending in 2010. Medicare and Medicaid were enacted in 1965; by January 1970, all states but two were participating in Medicaid.

Cumulative Percent Change in National Health Expenditures, by Selected Sources of Funds, 2000-2010

Rise in out-of-pocket changing A/R:

Increased self-pay

Increased balance after insurance

www.hbcs.org 8

Are you measuring outcomes?Description Measurement

Medical Records Days

Corrected Codes Days

System Up Time %

Front-end Accuracy %

DNFB Days

Billing Days

Cash Posting Days

Credit Balances Days

Late Charges Days

Description MeasurementCash as % of NPR %

Full Adjudication %

Rebilling Days

% of AR Greater than 90 %Bad Debt Write Off %

Denial Rate %

AR Follow-up by FC Days

Feedback Loop Monthly

Call Center Complaint Rate %Call Center Answer Rate Minutes

Call Center Wait Times Minutes

Call Center Hold Times Seconds

Call Center Abandon Rate %

Staff Quality Assurance Weekly

8www.hbcs.org

www.hbcs.org 9

Most are at a Crossroad: Buy or Build?

■ Cost to Collect■ Opportunity costs: what is going untouched?■ Staffing, Training, Turnover, Re-training■ Tools: Charity Care / FAP / Scoring / Segmenting■ Workflow technology to increase efficiencies■ Reporting requirements

Factors to Consider…

www.hbcs.org 10

Taking the Right Approach in OutsourcingAugust 2012 – hfm Magazine

Most are at a Crossroad: Buy or Build?

■ Finding the right partner:■ Seamless integration

■ Deep & current experience

■ Broad capacity

■ Patient-centered orientation

■ Cost considerations

■ The right monitoring tools

■ Running a pilot

■ Systematic monitoring

■ Strategies behind outsourcing:

■ Seizing improvement opportunities

■ Remedying staffing inefficiencies

■ Servicing noncore areas of hospital

operations

■ Accessing the latest clinical &

business technologies

■ Taking advantage of the benefits of

outsourcing specialization

■ Seizing investment opportunities

www.hbcs.org 11

■ Collaborate together on Health Care Reform challenges■ Share the risk – must be a balanced equation

■ Acquire technology “off balance sheet”■ IVR, Web Portal, Scoring, Workflow Tools

■ Extend your current business office resources:■ Manage the staffing flux – allow partner to become overflow for aged

accounts

■ Work together to:■ Improve cash collections■ Improve reporting■ Manage costs

To “Buy” is not for all, but for some…

www.hbcs.org 12

Does it matter to you? If in-house…■ Revenue Cycle Management: Do you have core competency?… Self pay billing and follow-up;

insurance billing and follow-up

■ Industry Experience: Is in-house better for you vs a partner exclusively in healthcare?

■ Charges Processed: Is the amount of global $ handled by a partner an important metric or do you just care about your AR?

■ Performance-Based Pricing: Is the staff “just doing their job” good enough for you?

■ Tenured Staff: What is average tenure of your RCM employees? Are they skills-based?

■ Customer Service: What is incentive to collect (so as to enhance your hospital’s Community Benefit)? … quantity ($); quality (compassionate, sensitive/excellent record of patient satisfaction) or BOTH?

■ Technology: What does it look like? Is IT developed in-house and innovative? Is there full integration with HIS systems? Are you ready for a conversion? Updated propensity to pay and scoring tools?

■ Communications to Patients: What are strategies around unified, consistent patient outreach? … inbound and outbound calls, IVR, statements, web portal

www.hbcs.org 13

Does it matter to you? If a partner…■ Revenue Cycle Management: Understand the core nature of the partner’s business…are they: Self pay

billing and follow-up; insurance billing and follow-up; full business office outsourcing, transitional business office staffing, bad debt, etc.?

■ Industry Experience: Are they exclusively in healthcare?

■ Charges Processed: Ask how much $X billion handled annually.

■ Performance-Based Pricing: Will partner go at-risk and “put their money where their mouth is”?

■ Tenured Staff: Are they US based? What is average tenure of RCM employees? Are they skills-based?

■ Customer Service: What is incentive to collect (so as to enhance your hospital’s Community Benefit)? … quantity ($); quality (compassionate, sensitive/excellent record of patient satisfaction) or BOTH?

■ Technology: What does it look like? Is IT developed in-house and innovative? Is there full integration with HIS systems?

■ Communications to Patients: What are strategies around unified, consistent patient outreach? … inbound and outbound calls, IVR, statements, web portal

14www.hbcs.org

How does it work? You with Partner

Hospital Responsibilities

PartnerResponsibilities

Registration & Pos Cash

Collections

Charge Capture & Entry

Financial Counseling

Insurance Eligibility

Verification

Pre-reg & Pre-cert

Scheduling

Insurance Follow-up

Claim Editing

Submission

Reporting & Analysis

Patient Billing &

Collections

Claim Adjudication

Denial & Appeals

Management

Patient Contact CenterContract

Management

Create Blended Model

15www.hbcs.org

Things to look for in Partner- Patient Contact Center■ Hospital-specific toll-free number ■ 24 / 7 account access (web portal)■ Automated call distribution system■ Multi-Lingual patient service representatives■ Blended predictive dialing/skills based routing■ Recorded calls for training and quality assurance■ Contact center reporting■ Interactive Voice Response (IVR)■ Real-time, on-line credit card processing■ Scoring technology (P2P) & segmenting accounts results

in increased call resolution and identifying Charity Care

Increased collections & Improved patient

satisfaction!

MUST: Extended Hours Inbound and Outbound Patient Contact Center

www.hbcs.org 16

Things to look for in Partner - Insurance Follow-up Account follow-up workflow engine

Workflow Engine (Companionate Accounts)

Real-time Monitoring Automated Follow-up Dashboard Reporting

PROVIDER DATA

www.hbcs.org 17

Target GoalAfter thorough discovery and research, improve your bottom line by leveraging technical and human resources through internal or external services, resulting in increased business office stability and accelerated and increased revenues.

Thank You!Questions?Jeff Porter

847-550-0480porterj@hbcs.org