north carolina hfma educational webinar

Breakthrough StrategiesLeading Practice Self-Pay SolutionsPresented by: Phil C. SolomonNC HFMA Chapter – March 17, 2009

Proprietary and ConfidentialThis information is not to be copied or otherwise utilized without the written consent of UCB, Inc.

Session Overview

Learning Objectives:

Healthcare industry financial overview

Review the economic factors causing the rise in self-pay

Identify new tools, technologies and strategies to help you to address the increasing self-pay patient population

Breakthrough Strategies

Session OverviewBreakthrough Strategies

“If you think you can….. or if you think you can’t….. you're right”

~ Henry Ford

Question

The new healthcare bill will eliminate all self-pay accounts?


TRUE or FALSE?Chat

Answer

Expect increase co-pays deductibles

Premiums increases

Patients look to reduce premiums


Healthcare Industry OverviewBreakthrough Strategies

2009U.S. $ 14.2 Trillion GDP

Gross Domestic Product (GDP)consumption + investment + government spending + (exports – imports)

U.S. Healthcare $2.7 Trillion

UK Total GDP $2.67 Trillion

Healthcare Industry OverviewBreakthrough Strategies

U.S. Healthcare $4.5 Trillion

CMS Estimates by 2019…………

Healthcare Industry Overview

From 2006 to 2015

CMS estimates health spending growth will exceed 7.2%

(three times faster than U.S. GDP)


Self-Pay DriversBreakthrough Strategies

Economic Crisis

High Unemployment

Government Cuts

Payment Slowdown

Costly Insurance

Capital Tightening

Sluggish economy creates loss of sales

Higher unemployment reduces taxes and premiums to insurance companies

Government reduces subsidies-business’s reduced ability to offer health care coverage

Less available dollars and reduced borrowing power

Government slows payments to Providers

Increased premiums force patients to take more risk – higher deductibles & co-pays

Self-Pay Factors

Nationally, 17% of the population under 65 has insurance – North Carolina 18% (source U.S. Census Bureau)

25 million adults under age 65 were underinsured in 2008 (source Commonwealth Fund)

Underinsured population increased over 60% from 2003 to 2009

Uninsured equals approximately 48 million Americans (source U.S. Census Bureau)


Self-Pay Factors

How large is 48 million…….

All Americans age 65 and older (35.9 million) (source Center for American Progress)


North Carolina Self-Pay FactorsBreakthrough Strategies

North Carolina

Self-Pay FactorsBreakthrough Strategies

Operational Budgets

Do More with Less

Self-Pay FactorsBreakthrough Strategies

Distribution of Deductibles for Employee-Only PPO Coverage

48%

Source: Kaiser Family Foundation and Health Research & Educational Trust, 2000-2008 Survey of Employer Health Benefits Report.

Self-Pay Dilemma Breakthrough Strategies

70% of Hospital Systems Report Increase in Uninsured Self-

Pay Patients(source HFMA View Live Poll June 2009)

Self-Pay Dilemma

The Good News:

The Healthcare Industry is Growing


An Uncertain

Future

QuestionBreakthrough Strategies

What are the solutions…

QuestionBreakthrough Strategies

What do we focus on first?

No Risk – No RewardBreakthrough Strategies

Don’t be afraid to try something new

Engage in pilot programs

Seek new technologies

Think “outside the box”

No Stop Gap Band-Aid SolutionsBreakthrough Strategies

Registration ChallengesBreakthrough Strategies

Registration input accuracy rate (National Average 30%)

Incorrect insurance information entered at pre/registration

Insurance eligibility and pre-cert not verified at pre/registration

Costly to administer charity

No collection at POS - Co-pays or deductibles

Red Flag and acts of fraud

Registration Cause-EffectBreakthrough Strategies

Missed Medicaid/Medicare/Commercial eligibility

Denials

Additional Rework

Excess Bad Debt

Missed Cobra 60 day rule

Increase in A/R – Days

Other Registration Quality Effects?

Chat


Improve registration accuracy with real time demographic validation

Enable POS collections by utilizing patient payment estimation tools

Validate past due payment history with real time systems – Ask for money pre & POS

Real time screen for charity – consumer behavior tools

Real time technologies identify COBRA – unemployed

Real time registration quality monitoring

Registration Solutions


Registration Tracking

Eligibility Cascading WaterfallBreakthrough Strategies

Real time eligibility checkFlat fee pricingWaterfall cascade check:

Medicare/Medicaid Commercial Commercial propensity Prime, second, tertiary Patient historical data Employer Other demographics

POS CollectionBreakthrough Strategies

Institute for Health Care Revenue Cycle Research - A Division of Zimmerman, LLC. National Pledge to Reform Uncompensated Care Reform Underway: Adopting Best Practices to Reduce Uncompensated Care and Improve the Patient Experience. a special supplement to PATIENT PAYMENT BLUEPRINT™

POS Collection ToolsBreakthrough Strategies

POS Action Strategy Breakthrough Strategies

Financial Assistance

You may qualify for Medicaid? Let me help you You may qualify for our charity care program?

Let me help you

Patient Pay

Will you be paying cash, check or credit card? Do you have a credit card on file with us? Let me show you how you can take advantage

of our prompt payment and self-pay discount Let’s set you up on a payment plan………..

Self-Pay Processing ChallengesBreakthrough Strategies

Hard to identify potential charity account

Costly to process charity accounts

Lack of participation by patient

Issues in the ER

Systems lacking to track patient payment history

Where is the money? – Who can pay?

Red Flags

Self-Pay Cause-EffectBreakthrough Strategies

Spend too much to give away free care

Patient apathy – learned behavior

Excessive mail returns

Excessive Bad Debt

Missed collection opportunity – vendors lacking latest tools

Increase in A/R – Days

Other Self-Pay Effects?Chat


Self-Pay Processing Solutions

Use Self-pay modeling solutions

Automated charity screening

Screen all self-pay at POS and BAI accounts

Real time systems assess a patient’s financial situation

Use Medicaid Wizard Questionnaire to determine eligibility

Adherence to Red Flag Policy with CRA

Self-Pay Modeling Validation

Who should qualify for charity?

Without Self-Pay Modeling


Who will pay their bill?

Self-Pay Modeling Validation

Who will pay their bill?

Charity – High – Medium – Low – Unlikely– Need Data

With Modeling & Analytics


Know how much they can pay

Automated Charity Tools

Consistent fair evaluationUnbiased and defensibleTax-exempt - accurate classification and reporting

of community benefit for IRS Form 990 Cost reduction strategyScrutinize patients total financial profileGuard against charity fraud


WHY?

HFMA Statement 15 Section 3.7 supports credit validation

Charity Processing

Consider this: “Manual Charity Processes = variable

interpretations and applications of policy”


Financial Counselor

Financial Counselor

Financial Counselor

Financial Counselor

Financial Counselor

Financial Counselor

Charity Processing

What does it cost to process a single charity application?


Chat

The Answer Is?

Financial Counselor

Financial Counselor

Financial Counselor

Financial Counselor

Financial Counselor

Financial Counselor

Best Payment Likelihood ModelBreakthrough Strategies

Customized Model Blending Patient Payment History

Actual Patient Payment History & PatternsSimilar Patient Profile History and Patterns

Generic Propensity of Payment Model, Including: Credit Bureau Report

Demographic Profile Non-Credit Lifestyle Profiling

Segmented Collection StrategyBreakthrough Strategies

80/20 Rule

Work Flow OptimizationBreakthrough Strategies

Qualify & Process

Maximum Resources

Modified Work Flow

Accelerate to Bad debt

Skip Trace & Process

Red Flag QuestionBreakthrough Strategies

What is a Red Flag Alert?

Notification of a possible terrorist threat

A continuous non paying patient

A warning from the government

An activity which indicates actual identity theft

An activity indicating the possibility of identity theft

Chat

The Answer Is?

AnswerBreakthrough Strategies

A pattern, practice, or specific activity that indicates the possible existence of identity theft

What is a Red Flag?Breakthrough Strategies

Red Flag Categories Alerts, notifications or warnings from a CRA Suspicious documents Suspicious personal identifying information Unusual use of, or suspicious activity relating to, the

covered account Notices from customer, victims of ID theft, law enforcement

authorities, or other persons regarding possible ID theft in connection with covered accounts held by the organization

Best Practice Self-Pay ModelingBreakthrough Strategies

Patient Demographic DataZip+4 Census DataActual Collection Performance ValidationPatient Payment History – Custom ModelFinancial Credit Bureau DataNon-Credit Economic DataRed Flag AlertsSkip Trace Data ValidationDual Validation Income EstimatorCharity Lifestyle Evaluation

Must be delivered in real time

Other Collection SolutionsBreakthrough Strategies

Recourse – Non-recourse funding

Good or bad?

Healthcare Credit Cards

Personal lines of credit

Self-Pay Bad Debt ChallengesBreakthrough Strategies

Cultural behavior and lack of control slows placement to agency

Stigma about placement – conflict with mission

Myth - must use multiple agencies to maximize performance

Self-Pay Bad Debt SolutionsBreakthrough Strategies

With new processes, only “true” bad debt accounts get placed

Know which accounts to write off sooner with modeling

Analytics and segmentation minimizes the need for champion vs. challenger

Minimize the need to work accounts too long

Self-Pay Bad Debt Strategies

Lowest scored accounts average 50%

Reduce statement cost by accelerating placement

Low scored accounts – accelerate to collection agency

Treat each segment similarly, accounts can be reported on Medicare cost report sooner, leaving “collectable” accounts with agency longer


Question

In order to meet Medicare cost reporting guidelines, you are

required to work accounts internally for 120 days?


TRUE or FALSE?Chat

Self-Pay Reporting ChallengesBreakthrough Strategies

HIS lacks self-pay focused tools

No real time collection statistics available

No patient payment analytics readily available

Limited address validation reporting

Limited POS collection performance tracking tools available

Self-Pay Reporting SolutionsBreakthrough Strategies

New tools designed specifically for Self-Pay

Provide instant feed back to internal staff

Identify trends and act rapidly for cost containment

Leverage dashboards to track performance

Performance Real Time DashboardBreakthrough Strategies

Identify MeasureAdjust

Overall BenefitsBreakthrough Strategies

Collect 5% to 10% of total self-pay inventory at POS

Reduce internal cost for government eligibility programs by 25%

Reduce charity administration costs by over 80%

Reclassify up to 20% of bad debt accounts as charity

Reduce statement cost by 25%-70%

Overall BenefitsBreakthrough Strategies

Reduce mail returns by over 40%

Improve liquidation by 25% to 40%

Add 10% to 15% in incremental revenue through eligibility cascade

Accelerate Medicare cost reporting on bad debt segmented accounts – allowing collectable accounts to remain at agency longer

Phil SolomonChief Client OfficerUCB, [email protected]

Do You Have Any Questions?

Thank you

north carolina hfma educational webinar

Documents

selfpay accounts

risein selfpay

pay solutionspresented

strategies tohelp

registration accuracy

anthe healthcare industry

new healthcare bill

real time systems