Optimizing Reimbursement

1. Optimizing Reimbursement Tools that help improve front-end collections October 30, 2004 Tary Kaylor Director of Product Management 503-601-3804 tarykaylor@provider-advantage.com

2. Today’s Agenda • Overview of financial risks for healthcare providers • Common procedures used for determining payment and assessing risk • Automated tools that help reduce A/R days • Case studies • Rutland Regional Medical Center • Allina Hospitals & Clinics

3. Provider Advantage • Develops, installs and supports patient insurance and financial EDI solutions for healthcare • Established in 1991 • Headquartered in Portland, OR with offices in Seattle, WA and Jacksonville, FL • Customers in 36 states and Puerto Rico • Strong customer service

4. Our Focus Optimizing revenues by establishing responsibility for healthcare services using automated tools that: • Confirm insurance coverage & benefits • Facilitate point-of-service collections • Identify high risk accounts • Reduce bad debt write-off • Provide information when you need it, where you need it

5. Financial Risks for Healthcare Providers are Increasing • Greater complexity to accurately prepare insurance claims • Medicare and Medicaid payments declining • Commercial insurance deductibles increasing • Reluctance to collect at point-of-service • Inaccurate patient information • Increase in self-pay and patient portion of bill

6. Resulting in: • Greater exposure to non-payment (*82 million in U.S. have lacked health insurance - 2002-2003) • Over $22 billion in healthcare write-offs in 2002 (has increased 20% over the past five years and continues to grow) • Hospitals losing out on 4-6% of revenue that they should collect as a result of flaws in the revenue cycle procedure and related work issues *Washington Post – June 16, 2004

7. What we found Accurately determining demographics, insurance coverage, and patient financial status at the point of service is becoming more important for my hospital. • 96% Agree • 2% Neutral • 2% Disagree

8. What we found At what point do you collect eligibility and benefit information? 66% Registration 50% Scheduling 48% Admission 34% Pre-registration 18% Discharge 16% Post visit 12% Other

9. National Average Registration Errors • 21% Invalid member identification number • 18% Invalid group number • 16% No valid referral • 15% No pre-certification and/or authorization • 12% Member ineligible • 11% Service not covered • 9% Invalid diagnosis/revenue code Source: Revenue Cycle Management: Industry Key Performance Indicators 2004 These are preventable!

10. What does this cost?

11. Why does this happen? • Eligibility and benefits not verified • Staff too busy to verify for each patient • Trust that the patient will present with correct information • Using manual procedures to verify eligibility and benefits can be time-consuming or complicated • Calling payers for benefits • Using web sites or manual software • Using paper based systems for storing information • Information not readily available to all areas that need it

12. The key is knowing your patient Eligibility Status • Who pays? How much? Who do I bill? Self-Pay • Will patient pay for services? How? Is this a charity care case? Do they have Medicaid? Demographics • Correct address? Phone number? Name? Ability to Pay • Are they credit worthy? Qualify for charity care? Line of credit available?

13. How do you do this? People Processes Technology

14. The right tools can help Incorporate automated procedures, at the earliest point of patient contact, to obtain complete and accurate: Patient insurance eligibility information Patient demographic information Patient financial (credit) information

15. Why Automate? • Eliminates steps from a time-intensive process • Establishes standard business rules throughout the organization • Helps to ensure business rules are followed • Allows for easier access to stored data by multiple departments

16. We thought HIPAA would help • Standardized transaction sets = easier communication? Not really . . . • Payers practice varying levels of adherence to the standards • Communication protocols are not standard • Automation is not as easy as we thought it would be • More payers making more transactions available • Payers are slow to embrace new transactions • More payers making web sites available for new transactions – prevents automation

17. Let’s look how automating: • Eligibility and benefit verification • Patient demographic checks • Ability to pay informationcan help with your reimbursement processes.

18. Where tools can help Scheduling Quality Monitoring Pre-Registration/Registration Customer Service Pre-Authorization / Referrals Credit Balance Resolution Revenue Cycle Financial Counseling and Time of Service Collections Cash Posting Denial Management Charge Entry/Coding Collections and Follow-up Billing

19. What if, up front, you could instantly... • Verify that your patient has eligibility and benefits? • Verify the patient data the health plan has on file for that patient? • Determine the patient’s financial obligation for services (deductible, co-payments)? • Determine the insurance company’s financial obligation for services? • Determine whether your self pay patient has Medicaid coverage? • Have this information available on your system?

20. You might put procedures in place to … • At Registration/Scheduling • Request payment for the patients’ financial obligation • Focus on the exceptions only • At Billing • Bill the patient earlier for their estimated portion • Move Billers to Registration due to the decrease in re-worked claims! • At Collections • Focus on collecting from patients who truly do not have insurance

21. Information Sent Name: Glen Gross SSN: 123-45-6789 Address:3907 Fairbanks Forest Dr.Jacksonville, FL 32223 Information Received Name: GlennF Gross SSN: 133-45-6789 Address: 397 Fairbanks Dr Jacksonville, FL 32223 What if, up front, you could instantly… Verify and/or update demographic information?

22. You might put procedures in place to … • At Registration • Update files with the correct patient information • Resubmit correct patient data for re-verification of patient eligibility • At Billing • Bill the insurance company with the correct patient information more often • Reduce amount of returned patient mail • At Collections • Locate the patient more easily

23. PAYMENT ADVISOR SCORE: 764 Available Credit Cards Account # Available Credit Master Card xxxxxxx0011 $ 10,000 Visa xxxxxxx1122 $ 6,000 Chase Visa xxxxxxx2201 $ 4,000 Action message: Please bring a check or credit card to registration. We accept Master Card and Visa. A financial counselor will be available to answer any questions you have. What if, up front, you could instantly… Determine a patient’s ability to pay based on credit information returned

24. What if, up front, you knew instantly … • From which patients you would never collect money? • Which patients to offer charity care? • Which patients are eligible for discounts? • Which patients are the most able to pay? • If credit lines are available?

25. You might put procedures in place to … • At Registration • Request payment: “Cash, check or charge?” • Forward the patient to a financial counselor when appropriate • Complete documentation / application for charity care • At Billing • Apply appropriate discount policies for uninsured patients • At Collections • Actively collect on “collectable” accounts • Send harder to collect accounts to to an outside collections company

26. Getting good information is the key to quick reimbursement • Obtain information quickly and with little impact on the staff using automated tools: • Eligibility and benefit data • Patient demographics • Ability to pay • Integrate the use of tools into the front end of the revenue cycle • Make information available at all necessary points in the revenue cycle

27. Rutland Regional Medical Center Integrating Automated Eligibility with their Front-end Processes

28. 188 beds 32,000+ ER visits annually 38,000+ O/P rehab visits (PT, ST, OT) 120,000+ O/P registrations 7,000+ Inpatient admissions 1,350 employees Rutland Regional Medical Center

29. Vision To be the best community hospital and health system in New England

30. Rutland’s Goals • Achieve the Baldridge Award of Excellence • Improve patient relations (participate in Patient Friendly Billing) • Decrease the A/R days • Increase cash collections • Reduce bad debt

31. #1 Obstacle to collecting at POS:Getting good patient information on time • From patients: • Cards not always available or correct • Information on cards is incomplete • From Admitting: • Web based tools too time-consuming and complicated (different systems, passwords, interfaces) • Didn’t own the process • After registration: • Can’t find the patient information in the paper filing system

32. Planning for POS Collection • Put in place automated eligibility • Automatically request eligibility/benefits • Post back to the HIS • Establish new guidelines for affected departments (financial counseling, emergency department, pre-registration, patient accounting, utilization management) • Train train train train train! • Monitor and assess

33. New Procedures:Financial Counseling • Financial counselor contacts self pays • Using pre-scheduled patient lists to review eligibility/benefits for co-pay and attempts to collect • Letters/phone calls

34. ED Patient Flow Prior to Bedside Registration Patients are triaged Patient are registered but often not seen by Registrar Eligibility verified with POS device or Internet; usually done the day after service

35. ED Patient Flow with Bedside Registration Patient presents in Triage Patient taken to treatment room Fast Track Patient goes to Registration Registrar goes to treatment room with laptop – Registers patient Registrar verifies eligibility before patient is discharged ED directs patients to Registration at time of discharge for “checkout” Registrar discusses eligibility status (or lack of) with patient ED collects copay based on information from eligibility response

36. New Procedures: Pre-registration • Registration calls patient - insurance cards never seen • Patient information is gathered during the call • Eligibility verification is done and reviewed while patient is on the phone • If eligibility cannot be verified, registrar requests corrected information • Notify financial counseling if needed

37. New Procedures: Patient Accounting • Immediate eligibility verification when the patient is on the phone • Improved accuracy on patient ID’s and group numbers • Commercial review before sending bill out • Review info if eligibility denial is received 270/271 best thing next to sliced bread

38. New Procedures: Utilization Management • Heavy user of 270/271 • Scheduled surgical patients • Review 270/271 for coverage info to determine need for pre-cert call • 271 Response will differentiate between HMO/PPO (i.e. CIGNA)

39. Education – Registration • Reviewed at monthly team meetings • Registration Specialist position created to manage reports and work with registrars on 270/271. Responsibilities include all training and education of staff. • Patient Account rep attends team meetings on a quarterly basis

40. Education – Patient Accounting • Very easy to learn • Well received by staff • Trained them in groups by team—about 20 minutes for each team

41. The Results so far • 98% reduction in no coverage for commercial insurances • O/P Medicaid days dropped from 56 to 39 days • O/P Commercial days in A/R dropped from 62 to 55 • Reduction in incorrect ID’s(often the patient ID is made returned)

42. Patient Satisfaction Press Ganey Courtesy of person collecting personal/insurance information 3rd quarter 2003 3rd quarter 2004 Mean 85.8 Mean 88.4 Rank 46 Rank 70 Privacy during collection of personal/insurance information 3rd quarter 2003 3rd quarter 2004 Mean 84.9 Mean 87.1 Rank 49 Rank 66 Ease of giving personal/insurance information 3rd quarter 2003 3rd quarter 2004 Mean 85.7 Mean 87.9 Rank 45 Rank 70

43. 270/271 easy to use Reduced eligibility denials Reduced days in A/R Improved patient satisfaction Improved employee satisfaction Rutland Summary

44. Demographic verification • Study of a single group of patients • 3,787 accounts with incorrect address, phone, insurance data • $12,279,000 in outstanding A/R • 120+ days old • Could not locate the patients

45. Demographic verification • Results from study: • Corrected demographics on over 80% of patients • Collected $126,000 from patients • Collected $6 million from insurance companies • Sent $2,300,000 to collections($9.7 million less)

46. Know your patient – Know how you’ll get paid Obtaining up front, automated patient information is critical to the revenue cycle Eligibility & Benefits Patient Demographics Patient Ability to Pay

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