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

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

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.

Providing contact center solutions to hundreds of clients across multiple industries helping them improve customer satisfaction and retention.

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Strategic Issues

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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

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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

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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

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Revenue Cycle Trends

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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

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Healthcare Industry TrendsEconomic 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

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Healthcare Industry TrendsOperating 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)

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Healthcare Industry TrendsOperating 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

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Communication Regulations

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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

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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

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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

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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

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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

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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

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Collector Challenges

Default/Delinquency Definitions

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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

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

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Credit Reporting

Accessing credit reports• Permissible purpose• Consumer transaction• State laws

Reporting negative information• Notification to consumer• State laws

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Electronic Communication

Websites• Terms and conditions• Consent to email, call, etc.

Email

Text Messages

Social Media• Facebook• Twitter

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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

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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

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Questions?

Thank you for your time Additional questions?

Jim Christensen, CEO Wendy Badgerjimchristensen@arraysg.com wbadger@ecmc.org

320-534-3325 651-325-3652