2. Revenue Enhancements and Cost Reductions Sherry Jensen, MBA VP, Finance and Clinic Operations Halifax Regional Medical Center August 14, 2013 Sherry Jensen, MBA VP, Finance and Clinic Operations Halifax Regional Medical Center August 14, 2013

3. Who are We? Halifax Regional is a 204 bed hospital Located in the second poorest county in North Carolina Have learned how to live on Medicare and Medicaid reimbursement—problem now, it just keeps going down 55 % Medicare, 19% Medicaid 8% Self Pay Halifax Regional is a 204 bed hospital Located in the second poorest county in North Carolina Have learned how to live on Medicare and Medicaid reimbursement—problem now, it just keeps going down 55 % Medicare, 19% Medicaid 8% Self Pay

4. Medicare/Medicaid Opportunities or Challenges? Medicare and Medicaid reductions to inpatient and outpatient services Bad debt reductions in current years and cost report years from 2008 Sequestration RAC audits on one and two day stays with no way to bill after one year MRI/GAP reductions Meaningful Use Medicare and Medicaid reductions to inpatient and outpatient services Bad debt reductions in current years and cost report years from 2008 Sequestration RAC audits on one and two day stays with no way to bill after one year MRI/GAP reductions Meaningful Use

5. Benefits Pension Contributions — 2% reduction - $668,000 - Savings 4 Tier Health Plan — Wellness Program Participation. If not participating in wellness program, the employee insurance costs are higher — Spouse exclusion implemented Workers Compensation Plan changed to Self Insured $54,815 – Savings One Time PTO sell back at 70% Pension Contributions — 2% reduction - $668,000 - Savings 4 Tier Health Plan — Wellness Program Participation. If not participating in wellness program, the employee insurance costs are higher — Spouse exclusion implemented Workers Compensation Plan changed to Self Insured $54,815 – Savings One Time PTO sell back at 70%

6. Partners Program Emergency Care Center Project Multi Disciplinary Committee meets weekly Evaluated all job functions in ECC based on licensing Corrected all job processes and communicated to all staff Listened to staff’s recommendations Increase customer service and staff morale Added 2 CNA positions Decreased discharge Length of Stay Emergency Care Center Project Multi Disciplinary Committee meets weekly Evaluated all job functions in ECC based on licensing Corrected all job processes and communicated to all staff Listened to staff’s recommendations Increase customer service and staff morale Added 2 CNA positions Decreased discharge Length of Stay

7. Rural Health Group and Emergency Care Center “Teaming Together"

8. Teaming Together Federally Qualified Health Clinic HRMC Emergency Care Center Community Care Network Kate B. Reynolds Federally Qualified Health Clinic HRMC Emergency Care Center Community Care Network Kate B. Reynolds

9. Teaming Together Will open FQHC Clinic at HRMC ECC on October 1, 2013 Three exam rooms, nurses station, and office FQHC hired physician boarded in Family Practice and Psychiatry FQHC hire their own staff Separate entrance Shared waiting room Will open FQHC Clinic at HRMC ECC on October 1, 2013 Three exam rooms, nurses station, and office FQHC hired physician boarded in Family Practice and Psychiatry FQHC hire their own staff Separate entrance Shared waiting room

10. Teaming Together Education to the community Follow Emtala rules Kate B. Reynolds funding $75,000 capital to set up exam rooms and offices IP and ECC follow up care can be assigned primary care practice on HRMC campus Education to the community Follow Emtala rules Kate B. Reynolds funding $75,000 capital to set up exam rooms and offices IP and ECC follow up care can be assigned primary care practice on HRMC campus

11. Goal Teach patients where to go for appropriate care Availability for patients to see primary care consistently Case managed care for patients Move toward a healthier community Teach patients where to go for appropriate care Availability for patients to see primary care consistently Case managed care for patients Move toward a healthier community

12. Health Information Exchange First and only hospital in North Carolina to successfully work with the HIE and are submitting data Working with FQHC and other primary clinics in town to get set up with the HIE First and only hospital in North Carolina to successfully work with the HIE and are submitting data Working with FQHC and other primary clinics in town to get set up with the HIE

13. Revenue Enhancements Emergency Care Center Upfront Collections – They said it couldn’t be done – Communications, team celebrating and encouragement, and emails daily make a difference – Nursing, security, registration and race cars all became a part of what was done – Went from $0.00 collections in the Emergency Care Center a month to an average of $11,318 a month, with the highest month being $18,281 Emergency Care Center Upfront Collections – They said it couldn’t be done – Communications, team celebrating and encouragement, and emails daily make a difference – Nursing, security, registration and race cars all became a part of what was done – Went from $0.00 collections in the Emergency Care Center a month to an average of $11,318 a month, with the highest month being $18,281

14. Revenue Enhancements Eliminated outsource management of denials and collections —Implemented denial management program and hired own staff —Hired our staff for collections for contract pay accounts —Total savings $118,480 in cost, increased collections by $10,000 a month on contract pay accounts Eliminated outsource management of denials and collections —Implemented denial management program and hired own staff —Hired our staff for collections for contract pay accounts —Total savings $118,480 in cost, increased collections by $10,000 a month on contract pay accounts

15. Five Week Project Rules — H our long meetings — Multidisciplinary teams — Assignments made each meeting — Met in three days to make next decision — Maintained meetings until final decision — Cancelled other Committee meetings to — concentrate on the 5 week project Rules — H our long meetings — Multidisciplinary teams — Assignments made each meeting — Met in three days to make next decision — Maintained meetings until final decision — Cancelled other Committee meetings to — concentrate on the 5 week project

16. Five Week Project Discussions and Evaluations — Reimbursements — Revenue Enhancements — Length of Stay — Physician preferences and documentation — Salary and supply costs — Ask staffing what works and what does not work Discussions and Evaluations — Reimbursements — Revenue Enhancements — Length of Stay — Physician preferences and documentation — Salary and supply costs — Ask staffing what works and what does not work

17. Five Week Project Outside Contracts Environmental Services Plant Operations Virtual Pharmacy Laundry Radiologists Leases Equipment Change from operating lease to capital lease

18. Five Week Project Services Evaluated Psychiatry – Inpatient and Controller Chemotherapy Services Dialysis Community Exercise Program OB/GYN Angiography Orthopedics Operational Costs Foods costs for units and visitors Supply Costs Laundry

19. Five Week Project PPO Contracts Renegotiated Process Improvements Documentation by Physician Clinic Physician Medical Center Clinic Physician Medical Center

20. Five Week Project Timing is everything when evaluating a contract services--- term of contract, new competition in town—need to reduce costs Communications and listening to a multi disciplinary team provides the greatest information Working on special projects throughout the Medical Center gets everyone involved and everyone begins thinking of changes and what reductions need to be made Due to daily workloads, set a time line and keep moving quickly to make decisions Found costs and reimbursement opportunities that we did not expect Timing is everything when evaluating a contract services--- term of contract, new competition in town—need to reduce costs Communications and listening to a multi disciplinary team provides the greatest information Working on special projects throughout the Medical Center gets everyone involved and everyone begins thinking of changes and what reductions need to be made Due to daily workloads, set a time line and keep moving quickly to make decisions Found costs and reimbursement opportunities that we did not expect

21. Total Savings Identified Total savings implemented $2,471,971 Total additional potential savings $266,000 Total savings implemented $2,471,971 Total additional potential savings $266,000