Best Practice Revenue Management Strategies

| 2 | 2 Presented By Christy L. Pehanich, CPC, FHFMA, MHSA, Associate Vice President, Professional Operations Revenue Management, Geisinger Health System Lori J. Masters, CPC, Director Accounts Receivable Management, Professional Operations, Revenue Management, Geisinger Health System | 2 The content of this presentation represents the views of the author and presenters. GE, the GE Monogram, Centricity and Imagination at work are trademarks of General Electric Company

Agenda About Geisinger Geisinger Revenue Management Environmental Backdrop People Process Technology ETM Case Study Results | 3

Geisinger Health System An Integrated Health Service Organization | 4 Physician Practice Group $948M Managed Care Companies $2,167M Provider Facilities $1,924M

| 5 Provider Facilities $1,924M  Geisinger Medical Center and its Shamokin Hospital Campus  Geisinger Wyoming Valley Medical and its South Wilkes-Barre Campus  Geisinger Community Medical Center  Geisinger Bloomsburg Hospital  Geisinger Lewistown Hospital  Marworth Alcohol and Chemical Dependency Treatment Center  4 Outpatient Surgery Centers  2 Nursing Homes  Home Health and Hospice, services covering 18 counties  86,000 Admissions, Observations and SORUs  1,745 Licensed Inpatient Beds Geisinger Health System An Integrated Health Service Organization

| 6 Physician Practice Group $948M  Multispecialty Group  1,110 Physicians  675 Advanced Practitioners  83 Primary and specialty clinic sites  1 Outpatient Surgery Center  2.5 Million outpatient visits  430 Resident and Fellows  335 Medical Students Geisinger Health System An Integrated Health Service Organization

| 7 Managed Care Companies $2,167M  477,000 Members, including 100,000 Medicare Advantage members and 132,000 Medicaid Members  Diversified Products  50,000 Contracted Providers and Facilities  43 Pennsylvania Counties  Offered on Public and Private Exchanges  Members in 5 states Geisinger Health System An Integrated Health Service Organization

Geisinger Revenue Management | 8

Environmental Backdrop | 9 Shrinking Payer Reimbursement Increased Patient Obligations Reduce Cost-To-Collect ACA, Insurance Exchange, Medicaid Expansion

Environmental Backdrop – Shrinking Payer Reimbursement | 10 Provider-Payer Relationships Underpayment Recovery Allowance Adjustments Denial Management

Environmental Backdrop – Patient Obligations | 11 Propensity to Pay Pre-Service Collections HDHP BAI TSP POS Collections

Environmental Backdrop – Cost to Collect | 12 Demographic & Financial Data Collection Coding AR Management Claims Processing

Environmental Backdrop – ACA | 13 CAC Medicaid Expansion Presumptive Eligibility Uncompensated Care

| 14 Operational Accountability Charge Capture CodingReconciliation Claim Submission

Planning | 15 Defined desired outcomes Identified each operational step and its components Assigned accountability & escalation procedures Measured performance daily Resolved exceptions

Desired Outcomes | 16 Error-Free Processing Reduced & Sustained Cycle Time Cash Acceleration Accurate and Compliant Processing Improvement in Cost to Collect & Employee Productivity

Action Planning | 17 Created template to measure charges posted vs. budget Developed acceptable charge capture thresholds (charge lag) Electronic charge files vs. manual data entry Automated charge transfer – next day Manual data entry – 3 days Created automated alerts for exceptions & validation Transactions > $ threshold Transactions > # units threshold Monthly reconciliation of services to charges entered

Billing | 18 Daily report on reasons for ‘not yet submitted to payer” Assigned accountability for resolution Modified claims generation logic within legacy patient accounting system toward “clean-claim generation” Measure and trend “Days to Payment” on primary-payer claims Address unwanted variations

Third-Party Payment Patterns | 19 Understand managed care contractual terms and reimbursement o Review Unbilled (TES) reports daily o Establish outlier threshold (total charge) for management review and action With payer payment schedule, determine last day of the month claims should be submitted to achieve payment within the same period; review and adjust weekly

Billing – Managing Claim Submission | 20 Manage exceptions on transmissions with clearing house Invest in technology that allows custom edits for error free processing, minimizing the total number of human “touches” to a claim Use this technology to edit all claims, including claims submitted hard copy to payers Technology should retain audit trail of claim changes to: Identify opportunities for pre-billing edits And employee training

Achieving Results | 21 Convergence of: o People o Process o Technology Managing key performance metrics to achieve desired results

People | 22 Investment in Education Career Development Providing Career Paths – with longitudinal opportunities Employee Engagement

People | 23 Financial incentives aligned with desired outcomes Performance driven reporting delivered daily – actual vs minimum incentive threshold Visibility into operational effectiveness Motivational tool to achieve highest level of performance

People | 24 Established career paths Revised job descriptions – aligned with market competitive compensation Established incentive compensation plan Educated work force on their respective role in achieving desired outcomes Communicate forecast of monthly performance daily Promoted employee certification (CRCR, CHFP, CPC, ICD-10) in desired field of study

| 25 People Defined roles Delivered tasks Assigned accountability for performance outcomes Line employees – performance/productivity standards Management – scope of authority “Accountability breeds response-ability” – Stephen Covey

| 26 Process Leverage Technology Mitigate Opportunities for Human Error Design a Streamlined Process

| 27 Technology  Must be scalable  Intelligent/Intuitive workflows  Drive processing decisions  Must contribute to cost-efficiency  Return on investment

| 28 Technology Case Study ETM

| 29 Enterprise Task Manager (ETM) is a web application that integrates with the Centricity Business Billing & Accounts Receivable (BAR) ETM supports Geisinger Clinic Revenue Management activities 1 st workflow went live on August 25, 2014 Subsequent workflows started to be deployed on February 9, 2015

ETM | 30 Immediate benefits include: Real time productivity reporting for employee and supervisor System generated exception based assignments Increased accountability and effective identification of training needs (return feature if work performed failed to resolve the receivable)

Projected ROI | 31 Annualized Return on Investment: % ROI to be achieved through: 0.5 reduction to Days in AR 12 month ramp up required for a 0.5 reduction to Days in AR, additional $55,000 per month in increased collections Increased cash collections Year 1 = $4,290,000.00

Results to Date | 32 Actual FTE’s Professional Insurance Collections = 47 pre ETM (Oct 2013) Actual FTE’s Professional Insurance Collections = 38 post ETM (Feb 2015) 9 FTE reduction valued at $364,680 annually (salary + benefits)

Results to Date | % increase in staff productivity % Cash in first 30 days % Cash in first 60 days DRO trending

Summary | 34 Create an infrastructure that is transparent with employees and other customers Educate stakeholders Manage exceptions for error free- processing Understand external forces (payer mix, payer behavior and payment patterns) Measure and course-correct promptly Hold people accountable for results and Get out of their way!

Cost to Collect | 35

Bending the Curve Impact | 36

GE Metrics | 37 TES GSSGeisinger System ServicesComparative Data Region: Eastern ClientYearQtrTotal Charges Median Post Lag Days Median Extract Lag Days Extract Same Day % Median Post Lag Days 90th Percentile Post Lag Days Median Extract Days 90th Percentile Extract Days Median Extract Same Day % GSSFY20141$530,502, GSSFY20142$544,629, GSSFY20143$536,529, GSSFY20144$573,141, Transactional Editing System (TES) Metrics compared to GE peer groups

| 38 BAR GSS Geisinger System ServicesComparative Data Region: Eastern ClientYearQtrTotal ChargesTotal A/R Claim Lag Days Days in A/R Percent A/R > 90 Days Median Claim Lag Days 90th Percentile Claim Lag Median Days in A/R 90th Percentile Days in A/R Median % A/R > 90 Days GSSFY20141$524,394,945$169,324, GSSFY20142$543,208,341$155,615, GSSFY20143$538,311,227$164,953, GSSFY20144$572,419,043$159,910, Billing & Accounts Receivable (BAR) Metrics compared to GE peer groups GE Metrics

| 39 Questions?