February 18, 2011 Results Delivered. Bottom Line. © 2011 MultiCare Consulting Services; Proprietary and Confidential Oregon HFMA Winter Conference ‘Trends in POS Cash Collections’ Presented by James McHugh

© 2011 MultiCare Consulting Services; Proprietary and Confidential 2  National Trends in POS Collections  Taking the First Step  Advanced Strategies  Questions Agenda

© 2011 MultiCare Consulting Services; Proprietary and Confidential Results Delivered. Bottom Line. National Trends in POS Collections

© 2011 MultiCare Consulting Services; Proprietary and Confidential 4 Oregon HFMA National Trends in POS Collections  Why collect POS Cash?  Increased cost share and high deductable health plans  Increase Patient Satisfaction  Educating patients on cost  Providing financial assistance prior to service  Low self-pay collection rates once in the billing cycle  Average True Self Pay > 10%  Average Self Pay After Insurance > 50%  Avoid high cost to collect  Internal collection efforts are costly  Early Out Collection vendor cost ~ 5-7%  Reduce Self Pay A/R days  Reduce Bad Debt and Charity Write-offs

© 2011 MultiCare Consulting Services; Proprietary and Confidential 5 Oregon HFMA National Trends in POS Collections  Where does your organization stand?  Average POS Collections as % of Net Patient Revenue  If you are a Medium $400M Net Patient Revenue Hospital:  Do you collect < $2M in POS Cash ( < 1%)?  Do you collect between $2-4M in POS Cash (1-2%)?  Do you collect >$4M ( > 2%)?  Average POS Collections as % of Patient Cash Collections  Regardless of your size, what % of Cash do you believe you collect as POS cash?  < 10%  10%  15%  20%  > 20%

© 2011 MultiCare Consulting Services; Proprietary and Confidential 6 Oregon HFMA National Trends in POS Collections  Where does your organization stand? “Does your organization strive to be Average or in the top 25%?” Top 25% National Average Top 10% Top 25% National Average Top 10% POS Collections as % of Patient Cash CollectionsPOS Collections as % of Net Patient Revenue *Source: Point of Service Collection Benchmarks 2008 Q1 Academy of Healthcare Revenue

© 2011 MultiCare Consulting Services; Proprietary and Confidential Results Delivered. Bottom Line. Taking the First Step

© 2011 MultiCare Consulting Services; Proprietary and Confidential 8  Advanced technology isn’t necessary to start collections  Start with organizational policy change  First focus on Co pays and Self-Pay deposits in the ED  ED Co pays for the insured  Set obtainable flat rates for self-pay patients  Track other self-pay areas Oregon HFMA Taking the First Step  Set obtainable deposits for diagnostic procedures  Consider organizational ‘Pay or Delay’ policy for elective procedures  Focus on Coinsurance in low dollar, high volume areas  Target OP diagnostics  Mammograms & X-Rays  Create Coinsurance matrix of top payer plans Hospital Requesting Payments in the ED *Source: Point of Service Collection Benchmarks 2008 Q1 Academy of Healthcare Revenue

© 2011 MultiCare Consulting Services; Proprietary and Confidential 9  Changing Patient & Employee culture  Train staff on customer service and scripting  Ensure compliance with frequent shadowing  Reinforcing patient expectations and behavior  Begin tracking POS cash collections  Track at a high level based on Financials  % of Patient Net Revenue  % of Patient Cash Collections  Track at the service level  Pre-Service Center POS  ER POS Collection  OP Diagnostics POS  OP Specialties POS  Track at the employee level  Incentive performance Oregon HFMA Taking the First Step

© 2011 MultiCare Consulting Services; Proprietary and Confidential Results Delivered. Bottom Line. Advanced Strategies

© 2011 MultiCare Consulting Services; Proprietary and Confidential 11  Only 50% of hospitals can effectively estimate patient liabilities*  In order to master advanced POS collection, your organization must be able to effectively estimate patient liabilities:  Simple Charge Master pricing  Use for self-pay on simple procedures  Uninsured Discounts  Don’t forget to incorporate your organizations’ self pay discount policies  Payer contracts  Plan specific benefits and reimbursement  Useful for low dollar high volume OP procedures  Historical Claim Data  More complex IP procedures  Estimate Lower and Upper ranges  Develop Case Rates based on low ranges  General Rule: Always collect the lower range of estimates to avoid patient refunds Oregon HFMA Advanced Strategies *Source: Academy of Healthcare Revenue

© 2011 MultiCare Consulting Services; Proprietary and Confidential 12  Homegrown Estimation vs. Vendor Tools  Of the hospitals the estimate patient liabilities, 58% utilize a home grown tool rather than a vendor tool*  Vendor tools are only as good as the data that is given  Ensure that your CDM is valid  Validate payer plan build in the contract management system  Building a patient estimation tool (internal or vendor) is not a simple undertaking and requires assistance from multiple departments:  Patient Access  Patient Financial Services  CDM  IT Oregon HFMA Advanced Strategies *Source: Academy of Healthcare Revenue

© 2011 MultiCare Consulting Services; Proprietary and Confidential 13 Results Delivered. Bottom Line. Questions

© 2011 MultiCare Consulting Services; Proprietary and Confidential Results Delivered. Bottom Line. MultiCare Health System Revenue Cycle Consulting Services 737 S. Fawcett Ave Tacoma, WA Phone: Fax: James McHugh St. Charles Health System Interim Revenue Cycle Director MultiCare Consulting Services Consulting Services Director