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General Session – Watch List for 2013 – Roundtable – May 17, 2013

General Session – Watch List for 2013 – Roundtable – May 17, 2013. Current State of Our Industry; Strategic Partner Process and Options; Denial Management. John Yeager , WV United Health System Lisa Simon, Ohio Valley Medical Center Sonja Raddish, Fairmont General Hospital. Agenda. 1.

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General Session – Watch List for 2013 – Roundtable – May 17, 2013

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  1. General Session – Watch List for 2013 – Roundtable – May 17, 2013 Current State of Our Industry; Strategic Partner Process and Options; Denial Management John Yeager, WV United Health System Lisa Simon, Ohio Valley Medical Center Sonja Raddish,Fairmont General Hospital

  2. Agenda 1 Major Transformation in the Business of Healthcare – are you Prepared? 2 OVHS&E Facts; Turnaround; and Strategic Partner Process 3 Denial Management 4 Closing Comments/Questions “We are what we repeatedly do. Excellence, therefore, is not an act but a habit.” Aristotle 2

  3. Major Transformation in the Business of Healthcare – are you Prepared? 3

  4. OVHS&E Facts • Ohio Valley Health System and Educational Corporation is located in Wheeling, WV • Two main facilities: • Ohio Valley Medical Center Wheeling, WV (founded 1890) 150 acute beds & 84 psych beds • East Ohio Regional Medical Center Martins Ferry, OH (founded 1906) 80 acute beds & 50 SNF beds

  5. OVHS&E Facts • $165M operating revenue for 2012 • 1,432 FTEs in 2012 • Provides acute, psych, SNF, oncology, ortho and other services • Older age of plant • 45% inpatient; 55% outpatient • Older patient base of abut 250,000 • 75 min. to Pittsburgh – 120 min. to Columbus • 1.353 case mix • 10,057 discharges • No endowments

  6. OVHS&E Historical Financial Performance • OVHS&E Consolidated Income Statement 2008 – 2010

  7. OVHS&E Historical Financial Performance • OVHS&E Consolidated Income Statement 2008 – 2010

  8. OVHS&E Historical Financial Performance • OVHS&E Consolidated Balance Sheet 2008 – 2010

  9. OVHS&E Historical Financial Performance • OVHS&E Consolidated Balance Sheet 2008 – 2010

  10. Areas Reviewed During Organizational Assessment • Leadership • Employee Relations • Physician Resources • Financial Condition • Labor Cost and Productivity • Patient Safety and Quality • Facility Utilization • Current Market Position/Competition • Service-Line Utilization • Communications and Public Relations • Community Wellness • Board Structure

  11. OVHS&E Original Findings • Lack of strategic direction • Insufficient accountability • Declining cash balance • Ineffective revenue capture • Increasing market competition • Rising operating expenses • Lack of cost-containment • Outdated Third-Party Payment Contracts • Lack of Physician Support

  12. Key Interventions

  13. 2010 – Where we were… • Depleted investments • Major losses • No bidding out of vendor items • No staffing model • Old third-party contracts • Non-productive employed doctors • STARK violations • Poor banking, management and auditor communication • Low automation • Costly debt structure • No cash on hand • Considering bankruptcy

  14. 2013 – Where we are now… • Operating profit margins • Depleted investments • Lower CSR cost and three-bid protocol • Staffing model; 200 less FTEs • Updated contracts (with continual opportunity) • Non-productive employed doctors • Stellar compliance program & IRO reports (30 mos. remain) • Restructured board with much better board, auditor and management oversight • Moderate automation • Bridge financing; but restructure on the table • No cash on hand • Improved wages • Actively pursuing strategic partner • Expanded service lines and physician support

  15. OVHS&E Historical Financial Performance • OVHS&E Consolidated Income Statement 2010 - 2012

  16. OVHS&E Historical Financial Performance • OVHS&E Consolidated Income Statement 2010 - 2012

  17. OVHS&E Historical Financial Performance • OVHS&E Consolidated Balance Sheet 2010 – 2012

  18. OVHS&E Historical Financial Performance • OVHS&E Consolidated Balance Sheet 2010 – 2012

  19. Key Balance Sheet Data • Improvements Continue • Accountability is Key

  20. Strategic Partner Objectives • Develop a consensus understanding of the current situation • Determine a clear vision of future opportunities/alternate scenarios • Understand the potential benefits/risks of partner(s) • Determine different approaches to partners • Identify and approach potential partners

  21. Strategic Partner Objectives and Process (continued) • Evaluate Partnering Options • Determine Next Steps

  22. Prospectus of the Company • Executive Summary • Introduction • Mission and Values • Vision for the Future • Current Position and Challenges • Critical Success Factors • Key Partner Attributes • List of Potential Partners • Next Steps

  23. Contact Potential Partners/Due Diligence Process • Contact Potential Partners • Review Other Transactions/Formats • Enter into NDAs • Due Diligence/Letter of Intent • Due Diligence Process (on site visits/VDR)

  24. Some Questions That You Might Ask • Are we sustainable on our own? • If so, what do we need to achieve this and for how long? • Is it likely that we can find a capital partner? • If not, what are our other options? • How do they differ? • Is the local option always the best option? • Play one, as to play two?

  25. Denial Management

  26. FGH Denial Facts • FGH average charges for the year 2011 $15,794,526 • FGH average denial amount for the year 2011 was $1,817,672- 12% of the average charges • Average recovery rate $1,388,245- 76% • FGH average charges for the year 2012 $15,793,512 • FGH average denial amount for the year 2012 was $1,015,742- 6.4% of the average charges • Average recovery rate $899,917- 89% • 2011 to 2012 denials were decreased by an average rate of 56%

  27. FGH 2011-2012

  28. FGH Denial Reports • Denial spreadsheet • Contains denials by month • Controllable and Uncontrollable breakdown with continuous totals • Comparison of the last 5 years • Remittance Code Report - Daily report for Follow up - Daily report for Registration

  29. FGH Denials • No process for tracking for Registration denials • No process for checking medical necessity at the time of service • No process for catching procedural changes in surgery

  30. FGH Action Plan • Created a team with members from multiple departments • Develop an action plan • Education/Ongoing Training • Meet on monthly or bi-monthly depending on the denial issue(s) • Report to Corporate Compliance a summary of denial issues • Report to Physicians a quarterly summary of inpatient denials

  31. FGH Action Plan

  32. Closing • Pull the important players together and get their buy in • Develop a tracking report • Develop a working action plan • Educate/train

  33. Questions? Thank you

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