April 2013 Equifax Confidential & Proprietary Information Copyright © 2006, Equifax Inc., Atlanta, Georgia. All rights reserved. Improving Revenue Cycle Performance Through Financial Management Solutions

Equifax Confidential & Proprietary Information 2 Market Challenges Slower Economy –1.5 million NC residents or 17% of population are uninsured (Source – –NC Medicaid/Medicare is 2.7 million or 30% of population –NC Unemployment rate at 9.1%; 5 th highest in US –Collection of self-pay dollars is even more difficultE –Escalating healthcare costs are forcing employees to share more of the burden Government Regulations –Changes in Medicare/Medicaid reimbursement policies reduces income –New revenue models –Uncertainty and rapid acceleration of change

Equifax Confidential & Proprietary Information Information Solutions ID Verification, Fraud Tools, Authentication Financial SolutionsValue Add Patient ID VerificationCredit Information Full Service Data Breach Comprehensive Authentication Solutions Healthcare Payment / Income Prediction Data/Demographic Enhancement Provider Authentication Custom Analytics Data/Demographic Enhancement Employment & Income Verification Skip Locate/Mail Return 3

Equifax Confidential & Proprietary Information Real Time/Online Patient Access Point Of Service Business Office Or EBO TPC Bad Debt Ability to implement custom models ID Verif. - Generic Scoring ID Verif. - Generic Scoring Same as POS + - Income Verif. - Custom Scoring Gen. Scoring - Custom Scoring - Employment - Locate /’; Custom Presumptive Charity Model - Verify Identity -Determine probability to Pay -Pro-Active Financial Counseling -Verify Identity -Determine Probability to Pay -Pro-Active Financial Counseling - Prioritize Workflow -Update Identification -Verify Income -Presumptive Charity - Prioritize Workflow -Obtain Employment -Skip Locate Optimize the Revenue Cycle Batch/Offline 0-90/120 Days 120+ Days Data Breach Connexus Patient Portals Authentication

Equifax Confidential & Proprietary Information Healthcare Payment And Income Prediction

Equifax Confidential & Proprietary Information 6 Credit in Healthcare Permissible Purpose –Typical billing procedures used in healthcare qualify as an extension of credit under the FCRA and ECOA Use of credit information does not impact the patient –Inquiries only viewable by the patient –Not taken into account in credit scoring Strictly regulated to ensure patient privacy –Tough security procedures for membership

Equifax Confidential & Proprietary Information 7 Credit in Healthcare Using traditional credit reports or financial credit scores may not be predictive of a patient’s probability to pay for healthcare services High number of patients with little or no credit history Tools must be unique, effective and built specifically for healthcare industry Traditional financial credit scores focus on propensity to repay financial debt Payment behavior patterns for medical debts are more complex

Equifax Confidential & Proprietary Information 8 Scoring in Healthcare Credit scoring is an analytical methodology used to objectively assist in evaluating patient behavior. It utilizes past behavior to predict the performance of future behavior Objective in healthcare: –Identify of patients likely or unlikely to pay their health care debt aka Probability to Pay –Identify patients’ Capacity to Pay –Consistent evaluation for Charity/Medicaid candidates –Collection/Account Management prioritization –Likelihood to file bankruptcy

Equifax Confidential & Proprietary Information Equifax Confidential, Page- 9 Score / Model Development Process Attributes/Variables Number of public records Utilization ratios Number of unpaid collections Balance of unpaid collections Balance of patient account Previous history with hospital Financial class of patient Income estimation Economic Means Criteria Credit Custom Out of over 600, the most predictable attributes are isolated to analyze and develop the model Models are developed from a sample data set that represents confirmed behavior of what it is meant to predict.

Equifax Confidential & Proprietary Information 10 Equifax patient Credit Database Information + Historical Credit Score Appended Observation Performance or “Present Time” 12-24Month Performance Outcome Period DevelopmentSample Performance Information (Patient paid amounts) Patients Admitted 7/10-12/10 Self-Pay Patient Accounts outcome - 9/11 How do you know scores are predictive? Validations are done to determine how well a score is performing at segmenting accounts receivables to differentiate account management strategies.

Equifax Confidential & Proprietary Information 11 Total Population: Probability to Pay Score Validations Show the Story

Equifax Confidential & Proprietary Information 12 The Scoring Story in Healthcare: Payment Risk Scoring shows providers how to segment their workflow or POS activity “Goods” – top 35% of the total population includes 61% payers and 70% of the direct payments “Extra Effort” – includes 25% of the total population, 27% payers, and 22% of the direct payments “Minimal Effort” – bottom 40% of the total population only has 12% payers and only 8% of the direct payments

Equifax Confidential & Proprietary Information 13 Collect on Healthcare Debt Patient A Higher Probability to Pay and Higher Ability to Pay Prediction: Likely to pay; likely to be able to pay Action: Make maximum collection effort if at point-of- service and bill remaining balance Reduce Collection Efforts Patient D Lower Probability to Pay but Higher Ability to Pay Prediction: Less likely to pay; likely to be able to pay Action: Make minimum collection effort – if not successful, refer patient to Financial Counseling for possible settlement/discount or attempt to get commitment on payment plan Attempt to Collect/Verify Medicaid and Charity Patient B Higher Probability to Pay, but Lower Ability to Pay Prediction: Likely to pay, but are unable to pay Action: Refer patient to Financial Counseling for potential discount and Medicaid/financial assistance evaluation Verify Medicaid / Charity Care Application Patient C Lower Probability to Pay and Lower Ability to Pay Prediction: Unlikely to pay; less likely to be able to pay Action: Refer patient to Financial Counseling – very likely to be eligible for Medicaid / financial assistance Low High Payment Predictor Low Income Predictor Take it a Step Further: Add Capacity to Pay

Equifax Confidential & Proprietary Information 14 Goals in Revenue Cycle Process Discover potential financial problems at point of service – to more effectively manage accounts early Predict the patient’s probability and capacity to pay – to reduce days in accounts receivable and improve cash flow Prioritize workloads of accounts and balances – to get the most from your resources and reduce collections cost Proactively identify potential Medicaid and financial assistance candidates up front – to better determine where to focus your resources

Equifax Confidential & Proprietary Information Equifax Confidential, Page- 15 ID Verification, Fraud, and Authentication

Equifax Confidential & Proprietary Information 16 Goals in Revenue Cycle Process Identify potential fraudulent demographic information – to decrease fraud risk and costly mail returns Verify patient addresses – to decrease returned mail, postage costs and lost dollars from returned statements that become uncollectible Accounts Re c eivable “last check” at 120 days or prior to Third Party Collection for updated contact information

Equifax Confidential & Proprietary Information ID Verification and Fraud Detection Identity Fraud Scores with or without credit data determine the likelihood of a patient application presenting a fraudulent identity to reduce fraud losses, streamline processes and increase revenue. Can delivers specific warning alerts about the patient’s identity like and updated information –Inquiry SSN associated with person reported as deceased –Inquiry SSN is invalid –Inquiry SSN may be a tax ID number Equifax Confidential, Page- 17

These tools are not something simply for organizations with advanced technology or expansive staffs. Every operation can realize improvements by working smarter and maximizing productivity of each employee and asset. The key is to make sure to choose the right solution so you put the right effort into the right account.

Equifax Confidential & Proprietary Information Equifax Confidential, Page- 19 Questions?

Equifax Confidential & Proprietary Information 20 Thank You

Equifax Confidential & Proprietary Information 21 Equifax Predictive Sciences Formed over 20 years ago (1992) The modeling and analytic division of Equifax Solutions for clients in a variety of industries –Financial Services –Telco –Insurance –Healthcare Over 100 custom models or analytical projects completed annually 3-4 generic products created every year

Equifax Confidential & Proprietary Information Equifax Confidential, Page- 22 Equifax Predictive Sciences –Formed over 20 years ago (1992) –Solutions for clients in a variety of industries –10+ years working with healthcare data and providers –Generic healthcare payment prediction scoring Medlytix Custom Scoring –Founded by former Equifax employees to focus further on healthcare –Partnered exclusively with Equifax –3 years working with healthcare data and providers –Proven custom scoring installations