1. Will That Be Cash or Credit? Pre-Care Payment Marie C. Murphy mcmurphy@eidebailly.com 701.476.8321

2. www.eidebailly.com Learning Objectives Impact of adjustments in the Revenue Cycle Distinguish between Charity Care and Bad Debt Best Practices for Positive Collections 2

3. www.eidebailly.com Point of Service (POS) A variety of factors commonly contribute to POS underperformance. Hospitals often lack the technology needed to accurately assess patient obligations or coverage eligibility. Many simply fail to enforce consistent payment requests during pre- registration and point-of-service patient conversations. Front office staff are not typically provided with sufficient resources or training to respond to complex POS patient encounters, nor are most held accountable to clearly defined performance expectations. 3 Source: The Advisory Board Company

4. www.eidebailly.com Understanding Key Barriers Common Shortfalls of POS Operations Insufficient technology Inconsistent front-end payment requests Lack of patient financial resources, payment alternatives Insufficient staff training, decision support Low accountability for front office staff Inconsistent ED patient registration, checkout Unsophisticated performance tracking 4 Source: The Advisory Board Company

5. www.eidebailly.com Education Opportunities 5 Administration & Board of Directors Revenue Cycle StaffClinical Staff

6. www.eidebailly.com Policies Create policies that support the process Train your team to follow the policy and process Ensure support of sound decisions based upon the policy Outline a path for escalation if needed 6

7. www.eidebailly.com Visibility Improve visibility in upfront performance Show support for point-of-service (POS) cash collections Monitor back-end activity for denials and write-offs Create Percentage of Net revenue targets and track them against POS cash collections By Registrar/Financial Counselor By Department By Site Determine actual versus expected POS collection Base this on the patients plan (Co-pay, Deductibles) 7

8. www.eidebailly.com Scheduling 8 Take Inventory of: The number of scheduling routes a patient or provider can take to secure a visit Any deficiencies in data received during the scheduling process Scheduling Policies and Procedures

9. www.eidebailly.com Scheduling Single point for scheduling Scheduling and pre-registration departments in the same location Standardized procedures if operating under a de- centralized scheduling environment Have a robust communication process to ensure that each patient is financially cleared 9

10. www.eidebailly.com Registration Starts With Scheduling 10 Information to be gathered during scheduling Patient name, date of birth, and contact information Primary and secondary insurance information Physician information, diagnosis and procedure/visit being scheduled

11. www.eidebailly.com Pre Registration Processes to optimize scheduling/Pre-registration: Integration between IT systems for scheduling and pre-registration functions All tests are entered into the online scheduling system Physician order is available to the scheduler at time of scheduling Hospital policy for documentation required at registration is explained to each patient Reminder calls placed to all patients and include discussion regarding patient balances and point of service collections policies, confirmation of third party coverage, and restates proper clinical preparation for service Uninsured patients are instructed to meet with financial counselors to complete applications for financial assistance, and income documentation requirements are explained and requested when patient presents for service 2010 HIMSS – A Life Cycle Approach fro Performance Measurement & System Justification 11

12. www.eidebailly.com Pre-Registration & Scheduling KPI’s Key Performance Indicators for SchedulingBest Practice Standards Pre-registration rate for scheduled patients >98% Percent tests scheduled in system100% Medical Necessity checking at time of scheduling100% Legible order with all required elements at time of scheduling>95% Reminder calls for scheduled services100% Average speed of answer<30 sec. Percent inbound call abandonment rate<2% Next available appointment for diagnostic tests<24 hours Call abandonment rate<2% 12 2010 HIMSS – A Life Cycle Approach for Performance Measurement & System Justification

13. www.eidebailly.com Point of Service Deductible, Co-pay, and Co-insurance amounts should be collected at the time of service. Set the expectation: “We look forward to seeing you on (appt. date). Please be sure to bring your insurance card, and your identification card to the visit. We will collect your co-pay/co-insurance/deductible (give specific amount) required by your insurance plan.” 13

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15. www.eidebailly.com Point of Service 15 Explain what a deductible, co-pay or co-insurance is. Train your staff so they are comfortable discussing financial matters with patients.

16. www.eidebailly.com Optimize Processes to optimize Patient Access: Online documentation systems to facilitate the management of Patient insurance cards Driver’s license Financial assistance applications and supporting documentation Integration of the financial counseling and registration processes and systems. Discussion regarding the patient payment obligations and options for payment is conducted with every patient System logic to identify common registration errors and facilitates immediate correction by staff 16

17. www.eidebailly.com Optimize (continued) Processes to optimize Patient Access: Assurance that verification is performed with each registration “Red Flag Rules” systems that identify potential identity theft situations IT systems and/or reports that identify multiple medical records to ensure duplications are corrected daily IT systems that have the ability to hold claims for registration errors Monitor daily Education Opportunities 17

18. www.eidebailly.com Financial Counseling The financial counselor will need to work very closely with: Registration and Point of Service teams – regarding out of pocket costs and financial expectations discussed Business Office – to share discussions regarding financial expectation with the patient 18

19. www.eidebailly.com Financial Counseling Key Performance Indicators (KPI’s) Medicaid eligibility screening for all uninsured patients: 100% Medicaid eligibility screening for all Medicare only patients: 100% % Uninsured ED patients screened for financial assistance: 80% % Uninsured IP and OP patients screened for assistance: 95% Collection of deposits for elective procedures prior to service: 100% Collection of inpatient balances prior to discharge: 65% Financial assistance approved within 10 days: 100% Medicaid approval obtained within 30 days: 100% Prompt-pay discount %: 5 to 20% 19

20. www.eidebailly.com Keep Them Informed Verbal explanation along with written explanation Create a brochure explaining the financial process Give them a link to your website for further details Make your website a one-stop destination for facility information, health information, forms and secure messaging with your facility Provide a phone number in case they have further questions Repeat the same scripting at EVERY visit. Keep it consistent 20

21. www.eidebailly.com Financial Clearance – Pre Encounter Financial Clearance should begin as soon after the patient is scheduled as possible and at least 48 hours prior to an appointment. Benefit Verification Based upon the service to be offered To include coverage percentages and out of pocket obligations (Co-Pay, Co-Insurance, Deductibles, and Non-covered services) Prior – Authorization requirements Special billing requirements Financial Conversations with the patient 21

22. www.eidebailly.com Financial Conversations – Pre Encounter Based upon your collection policies: Explain coverage information Discuss payment options Assist with Payment Arrangements, Loan Programs, possible other coverage options, and/or Financial Assistance Discuss expectations prior to the appointment 22

23. www.eidebailly.com Patient Balances Collect/Discuss past unpaid accounts Use a holistic approach for the entire family of accounts Require approval for high dollar write offs and/or special arrangements Track staff compliance versus internal policies 23

24. www.eidebailly.com Financial Conversation All Settings (ED, OP, IP, Clinics) List all providers that may be a part of this episode of care Inform patients that the actual cost may vary from the estimate Ask the patient if they are interested in learning more about payment options Ask the patient if they are interested in learning more about Financial Assistance options 24

25. www.eidebailly.com Financial Conversation (continued) All Settings (ED, OP, IP, Clinics) Attempt to resolve prior balances (provider balances, agency balances, or other organizations) Have dates and amounts – if the patient requests,supply a list of services provided Provide the patient with written information regarding financial assistance, summary of obligations, include a phone number for questions 25

26. www.eidebailly.com Financial Conversations – Emergency Department In the Emergency Department (comply with EMTALA) Emergent patients – at discharge Non-emergent – following the medical clearance Registration will gather basic information after medical clearance (Demographic, Insurance coverage, need for assistance) Inform patient that their inability to pay will not interfere with treatment of an emergent condition Uninsured informed that the goal is to identify payment sources or financial assistance options After Medical clearance screening verify coverage Financial counseling 26

27. www.eidebailly.com Financial Conversations – Post Encounter Follow up with any patient that did not receive a visit from a financial counselor. Timing is very important. Be sure to follow up with in 1-3 business days after discharge Ensure that the patient understands the financial paperwork given at admission and/or discharge Follow up post encounter for paperwork that may have requested Follow up on promises to pay 27

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29. www.eidebailly.com The Affordable Care Act (ACA) Be strategic and develop ways to assist your patients on understanding how to enroll This will help reduce unnecessary bad debt and charity expenses Consider reviewing your workflows to ensure that your front line has the proper education Consider having extra computers at patient access points to navigate patient policies, exchange questions, Center for Medicare & Medicaid services Do outreach services at Community Centers etc. 29

30. www.eidebailly.com ACA – Changes to your Revenue Cycle Expect more patients exploring their options, asking more questions and in many cases being very confused Train your team at all access points as well as points of care to: 30 Answer “Market Place” Questions Articulate Coverage Options Discuss Payment Options Know who to escalate to

31. www.eidebailly.com ACA – First Steps Educate patients on their choices Make them aware of their obligations Make it easy to pay Exchange plans have high deductibles Important to capture these out of pocket costs 31

32. www.eidebailly.com Transparency Survey’s consistently show that over 60% of patients rank knowing what the procedure will cost them as their #1 concern In knowing the cost, 30% of patients recover faster than patients who do not have a clue what the procedure will cost Estimate charges based on historical data by procedure and physician Estimate patients out of pocket expense 32

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34. www.eidebailly.com Self-Pay Management Uninsured patients: Begin conversations with the patient regarding payment options at scheduling Let them speak with a Self-Pay Financial Counselor that can work with them through out the entire billing process A recent study showed that as much as 31% of bad debts written off were patients who would have qualified for Financial Assistance Search for other payment sources Set-up financial arrangements Verify financial assistance Ensure you are following the 501(r) requirements 34

35. www.eidebailly.com Securing Payments to Reduce A/R Days Change your up front conversations Ask for: Insurance Cards, Driver’s license and now Credit Card Use a credit card on file: At check out to pay: Co-pays, Co-insurance, Deductibles, Non-covered services After the EOB is received and any balances can be take care of without a statement Work with your Credit Card Gateway to ensure PCI compliant Credit Care Processing 35

36. www.eidebailly.com Charity Care and Bad Debt Determine upfront for possible Charity Care Listen to indicators from patients Should bad-debt accounts be considered for Charity Care 36

37. www.eidebailly.com Billing and Collection Statute Requires that a Non-profit hospital facility not engage in “extraordinary collection actions” (ECA) against patients before reasonable efforts have been made to determine if the person qualifies for financial assistance. 37

38. www.eidebailly.com 501(r) Regulations Conduct internal review for compliance with regulations Financial Assistance Policy Review (FAP) Determine Amounts General Billed Discount (AGB) Look-Back Method Prospective Method 38

39. www.eidebailly.com 501(r) Look-Back Method Based on actual allowed by either: Medicare fee-for-service Medicare fee-for-service and all private health insurers; or Medicaid alone or with either of the above Calculated at least annually based on claims allowed Select a 12 month period to use for the calculation Must begin applying to gross charges for FAP- eligible patients within 120 days of the end of the calculation period 39

40. www.eidebailly.com 501(r) Prospective Method Based on the billing and coding process the hospital facility would use if the FAP-eligible individual were Medicare Fee-for-service Medicaid beneficiary, or Both AGB is set at the amount the hospital facility Determines what would be the total payment for the care from Medicare or Medicaid reimbursement, and Beneficiary payments. 40

41. www.eidebailly.com 501(r) Gross Charges Must charge FAP-eligible individual less than gross charges for any medical care covered under the FAP Billing statements may state gross charges as a starting point before applying various allowances, discounts, and deductions Amount personally responsible for paying must be less than gross charge 41

42. www.eidebailly.com Best Practice KPI’S There are two basic types of Benchmarks. 42 External Represents best practice from like-size top performing facilities Internal Monitors trends over time

43. www.eidebailly.com Advancing a Gold-standard for POS Performance Top performing hospitals across the country target the following best in class POS performance thresholds. 43 Financial Performance Local unemployment rates Hospital payer mix Service line mix

44. www.eidebailly.com Benchmarking POS Performance 1.8%-3.0% POS as percentage of Net Patient Revenue 65%-75% POS Opportunity Capture (Outpatient) 90%-95% Pre-Registration Rate 98%-99% Registration Accuracy 98%-99% Insurance Verification Rate <0.25%Authorization/Eligibility Denial Write- offs 44 Source: The Advisory Board Company

45. www.eidebailly.com Benchmarking POS Performance Key Assumptions and Limitations POS collection benchmarks are based on self- reported data from 25 hospitals POS collection performance is impacted by many factors including local unemployment rate, payer mix, and service line mix Hospitals serving large self-pay and/or underinsured populations should tailor POS goals towards the lower end of best-in-class collection ranges 45 Source: The Advisory Board Company

46. www.eidebailly.com Scripting #1 Example: Mr. Jones – We have verified your insurance and they require us to collect a $50 copay for each visit. How would you like to take care of this today, cash or credit? (Then be silent) #2 Example: Mr. Jones – you are having a procedure today that requires a deposit of $_______. I see that Amy our financial counselor spoke with you on Tuesday and you indicated that you would be paying by check. Is that still the method of payment that you would like to use? (then be silent) Remember: It is a contract between the patient and the insurance. 46

47. www.eidebailly.com Summary Clearly defined processes will result in an optimized and efficient revenue cycle Technology is vital to the success of the healthcare revenue cycle Definable and measureable key performance indicators contribute to optimal performance

48. This presentation is presented with the understanding that the information contained does not constitute legal, accounting or other professional advice. It is not intended to be responsive to any individual situation or concerns, as the contents of this presentation are intended for general informational purposes only. Viewers are urged not to act upon the information contained in this presentation without first consulting competent legal, accounting or other professional advice regarding implications of a particular factual situation. Questions and additional information can be submitted to your Eide Bailly representative, or to the presenter of this session. Questions? 48