Best Practices: POS Collections Presented by: Reid Mellott and Brandon Childs

Overview Industry Statistics and Trends Upfront Collection Facts Compliance Issues POS Collection Technology Opportunity Areas Success Factors Scripting

Current Trends The losses for many hospitals’ investment income has caused their executives to look for additional ways to increase net revenue, reduce bad debt and lower cost. Point of service collections no longer an emerging trend – it’s now mainstream for Patient Access best practices Maximizing point of service collections rank in top 10 CFO priorities – Advisory Board Company 2011 Result: rising bad debt and less cash on hand; especially with the continued growth of HSA & High Deductible Health Plans (more financial responsibility put on the patient)

Growth of HSA / HDHP Enrollment Source: AHIP Center for Policy Research, June, 2011

Population Trends Self Pay is the fastest growing payer class 50+ million Adult Americans are uninsured (18.7% ) 25 million Adult Americans are underinsured 75 million working-age adults uninsured or underinsured Fastest growing group of uninsured aged 25 – 34 with income > $70K Figures increase significantly when including children or undocumented individuals Employer-based health coverage continues to decrease 2008 2009 2010 2011 49.2% 46.8% 45.8% 45.0%

Unemployment and the Uninsured impact * * *1% increase results in 1M new Medicaid/CHIP enrollees and 1.1M uninsured Bureau of Labor and Statistics and the Kaiser Family Foundation

Increasing patient out-of-pocket Percentage of Covered Workers Enrolled in a Plan with a General Annual Deductible of $1,000 or More for Single Coverage Note: These estimates include workers enrolled in HDHP/SO and other plan types. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2006-2010.

Increasing PO$ Collections: Why the Focus? Significantly improve the bottom line of your organization through: Reduce cost to collect Reduce uncompensated care Reduce self-pay receivables Increase overall cash flow Improve patient satisfaction Reduce call volumes Reduce patient confusion about their bills

PO$ Collection Facts Cost to collect is typically reported between 2-3% of revenue Front-end processes are important … due to increase in patient out-of-pocket Post discharge, cost to collect increases, likelihood of collection decreases Educating the patient of their financial obligation in advance improves patient satisfaction

Example Medium size hospital Radiology department with 5,000 visits Average liability $389 Potential to collect $1,945,000 Result: Without collecting at POS, the hospital can typically lose up to 60% of the potential amount, or $1,167,000

PO$ Collections – Best Practices, is this possible?   Outpatient Inpatient Surgery ED (not admitted) Total Annual Monthly Total Annual Visits 52,200 4,500 13,800 27,000 97,500 % Commercial Visits 31% Annual Commercial Visits 16,182 1,395 4,278 8,370 30,225 Average Patient Responsibility $169.00 $1,225.00 $798.00 $122.00 Total Collection Opportunity at POS $2,734,758 $1,708,875 3,413,844 $1,021,140 $8,878,617 $739,885 Annual Net Patient Revenue $57,015,738 Current Annual Collections at POS $480,000 Current Monthly Collections at POS $40,000 Current Collections as % of Net Patient Revenue 0.84% Current Collections as % of Total Collection Opportunity 5% HFMA Best Practice 2-3% of Net Patient Revenue Best Practice Monthly Collections at POS Current Monthly Collections Monthly Increase from Current Annual Increase from Current % Total Opportunity POS Collections at 1% 47,513 7,513 $90,156 POS Collections at 2% $95,026 55,026 $660,312 11% POS Collections at 3% $142,539 102,539 $1,230,468 16%

Compliance EMTALA Medical Necessity ABN HIPAA Compliance Hurdles

Potential compliance risks while engaging in financial activity HIPAA Health Insurance Portability and Accountability Act Disclosure of information must be limited to the minimum necessary for the purpose of the disclosure PO$ IMPACT Potential compliance risks while engaging in financial activity

EMTALA Emergency Medical Treatment and Active Labor Act The hospital cannot delay in providing a medical screening examination or stabilization services in order to inquire about the individual payment method or insurance status. PO$ Impact Collection activity ONLY AFTER medical screening examination and stabilization

Potential patient liability if not medically necessary Medical Necessity Social Security Act 1862(a)(1) is defined as: Consistent with symptoms or diagnosis of the illness of injury being treated and not for the convenience of the patient, attending physician, or supplier Within generally accepted professional medical standards (not exploratory or investigational) PO$ Impact Potential patient liability if not medically necessary

ABN / Notice of Non-Coverage Advance Beneficiary Notices or Notice of Non-Coverage Before services are provided Medicare/select commercial payers will not pay for some or all of the services because they may not be reasonable and medically necessary Patient/representative must be informed of non-coverage and liability in the event Medicare does not pay PO$ Impact Potential patient liability

Collection Technology Detailed eligibility – 271 data is not enough Medical necessity verification ABN notification Financial responsibility estimator On-line payments Integrated credit card authorization system ATM accessibility Propensity to pay score Scripting

Collection Readiness Training Scripting Policies and procedures Set expectations and accountability Communicate goals and expectations Measure potential vs. actual cash Develop incentive plan

PO$ Collections Opportunity Areas Registration/ED Pre-registration Scheduling In-house/ Discharge Other ancillary departments

Scheduling / Pre – Registration / Registration Potentially the first point of contact with the patient! Verify eligibility Consistent pre-registration process Obtain benefits (coverage, co-pay, co-insurance and/or deductible, YTD accumulators) Inform patient of liability in advance Offer debit/credit card payment option

Financial Counseling Plays key role in protecting the hospital’s cash flow and exposure to bad debt and collection expense Medical assistance screening Alternative state funding application process Charity care screening Credit scoring (propensity to pay) Establish financial arrangements

In House / Discharge Make in-house visits to patient rooms for third party coverage, collect patient financial responsibility, and/or payment arrangements Implement financially focused discharge control process for all point-of-service areas Ensure every account is financially evaluated prior to discharge

Success Factors Hospital PO$ collections policy Financially focused Patient Access Department Financial Counseling best practices Medicaid eligibility vendor Physician and physician office manager education Staff education and incentive program Consistency in front end process

Key Contributors to Success Senior Management buy in; CEO, CFO, CNO CIO supporting integration of technology Physician communication Clearly defined policies and expectations Training program Consumer education and satisfaction Establish goals and measure performance

Best Performers – Hospital wide CFO/CEO communicates organizational efforts to hospital directors CNO adopts organizational efforts and level set clinical depts CIO provides access to currently technology and provides resources to implement HR incorporates cash collection responsibilities in job description Patient Access documents Policies and Procedures Scripting and role playing Discuss and publish goals and expectations Track and publish actual vs goals

Best Performers – Non ER Relationship with physician community Provides specific information at scheduling Provides insurance information at scheduling Provides maternity list Strong Preadmission dept Insurance eligibility Medical necessity evaluation Generates patient liability Access to propensity to pay data Access to prior balances Communicates and collects patient liabilities

Best Performers – Non ER cont. Strong Financial Counselor dept Evaluates ER admits, direct admits and transfers Established relationship with case management Generates and communicates patient estimates Access to prior balances Access to propensity to pay information Access to financial assistance resources Established prompt payment guidelines Established uninsured discounting Decentralized dept adopt and implement existing polices and procedures

Best Performers - ER ER: Clear and timely communication of MSE completed Clinical team assisting with acuity level Financial Counselors and Discharge Process Calculate and collect patient liabilities Insurance letters with self addressed envelopes Established prompt payment and uninsured programs

Tips to Motivate Payment Use Here are some options for you… Did you know you could May I suggest… We have always encouraged Avoid I want you to… I need… We require… Our policy states

Overcoming Objections #1 Patient Objection “I’ve never been asked to pay before.” Registrar Response “Historically we have encouraged patients to pay their patient responsibility upfront. We now have a program in place that helps patients know their expected patient responsibility upfront. What payment method would you like to use to pay your responsibility?

Overcoming Objections #2 Patient Objection “Why wasn’t I told in advance that I would have to pay today?” Registrar Response “We do our best to try to inform patients prior to their arrival. If you are not in a position to pay the total amount in full today, we will set up a payment arrangement for the remaining. How much will you be paying today?

Overcoming Objections #3 Patient Objection “I don’t have any money.” “I can’t afford it right now.” “I am not working. How can I pay if I don’t work?” “I’m going to file bankruptcy.” Registrar Response “I understand. Why don’t I have you talk with our Financial Counselor and complete a Financial Analysis Statement. This will help us determine how we can assist you in resolving your account balance” **Although we want to collect from this patient, it is equally important to help the patient understanding other funding mechanisms. Ensure that all critical data elements are verified and document your account to help the business office.

Overcoming Objections #4 Patient Objection “I like to wait until my insurance pays, then I’ll pay.” “My insurance pays first and then I pay when I receive the bill.” “I don’t even have a Deductible/Co-Pay –my insurance is wrong.” Registrar Response “As a service to you, we’ve contacted your insurance company and confirmed your eligibility and current. We verified that your annual deductible is $____ and you’ve already met $_____. Your co-insurance percentage is ___% or $____, etc, etc. The great news is, we have a contract with your insurance company which means you receive a discount.

Overcoming Objections #5 Patient Objection “I don’t have my checkbook/cash/credit cards with me today.” “They told me not to bring valuables with me so I left my purse/wallet at home.” “I just wrote my last check.” Registrar Response We’d like to have your payment method identified prior to your procedure. What method do you expect you’ll be able to use? Is there a way we can obtain that today or later in the week?

Overcoming Objections #6 Patient Objection “It’s not right to pay for a service before you have it done!” “I’ll stop back at discharge.” Registrar Response “I understand this may be something new for you. We have found that it is best to discuss this upfront so that there are no surprises later on. Also, once you’re finished with your test/procedure, you’ll be ready to go home and you won’t have to worry about stopping back here.

Overcoming Objections #7 Patient Objection “My ex-spouse is responsible for paying these bills.” Registrar Response “I understand. Unfortunately we cannot become involved in divorce decrees. As the presenting parent you are the responsible party for this account. We do have several payment methods available.”

Overcoming Objections #8 Patient Objection “I’m always overcharged and it takes forever to get your money back.” Registrar Response “I understand how frustrating that can be. We’ve done our very best to make sure we’ve verified and estimated correctly. If you find that you are due a refund, please call me directly and I will follow up and ensure your credit balance is promptly refunded. My name is ______ and my direct line is _____.

For additional information regarding Who to Contact: For additional information regarding today’s presentation please contact Terry Truman 303.974.2815 terry.truman@recondotech.com