1. CAHAM September 1, 2015 Susan Labow, ROI

2. KERN COUNTY MEDICAL CENTER TOTAL BEDS : 222 ANNUAL ADMITS: 32,000 ANNUAL OUTPATIENT CLINIC VISITS: 140,000 ANNUAL ED VISITS: 45,000 ANNUAL OPT SURGICAL PROCEDURES: 4,0000 HOSPITAL FINANCIAL SYSTEM: MCKESSON-STAR PRACTICE MANAGEMENT SYSTEM: MCKESSON PRACTICE PLUS EMR: OPEN VISTA PAYER MIX: 75% M/CAL AND M/CAL MANAGED CARE 8% MEDICARE 12% COMMERCIAL/WORKER’S COMP./JAIL 5% SELF-PAY

3. KERN MEDICAL CENTER STATISTICS A/R DAYS AS OF 6/30/13 TOTAL A/R 166 DAYS- BILLED A/R 151 A/R DAYS AS OF 3/01/14 TOTAL A/R 94 DAYS- BILLED A/R 84 A/R DAYS AS OF 6/30/14 TOTAL A/R 77 DAYS- BILLED A/R 57 CASH COLLECTIONS AS OF 9/30/13 $6 MILLION CASH COLLECTIONS AS OF 9/30/14 $13 MILLION FTE’S 6/30/13 TOTAL FTE’S 30, PLUS 3 SUPERVISORS FTE’S 6/30/14 TOTAL FTE’S 12, PLUS 2 SUPERVISORS

4. OVERVIEW – MAJOR BARRIERS  2 Registration platforms  Star for hospital services  Practice Plus for clinic visits & pro fees  Clinic and OP diagnostic registration staff reported to clinic leadership  Hospital registration staff only responsible for ED, INPT and scheduled surgeries  Zero quality and Zero authorizations

5. OVERVIEW MAJOR BARRIERS Multiple scheduling systems  Surgery -open vista  Diagnostic and pre-op – star  Clinic visits- practice plus EMR is non-functional and not user friendly Diagnostic test performed during clinic visit, were posted in STAR but manually credited and debited in practice plus.  TOTAL DISASTER

6. OVERVIEW MAJOR BARRIERS  Case management focused on  Medicare certification  M/Cal and M/Cal Managed care  No concurrent review or authorizations for commercial payers  No authorization bill hold in financial system.  business office had to scramble once claim was produced or just bill with records

7. PROCESS IMPROVEMENT ENGAGEMENTS AT KMC  Various firms and solutions had already failed  “CONSULTANT” was a bad word  Process improvement opportunities are not visible to everyone.  Most common practice is to just add bodies to broken process  Adding bodies, is like adding layers of clothes to hide your extra weight  Nothing is solved

8. PROCESS IMPROVEMENT DAWNING OF A NEW DAY  Kern was bitten with the improvement bug  Once they were given some direction and ideas they took off and continue to look for opportunities  Watch words are-  maximize technology  pre-register every type of scheduled service  streamline check in- Customer first  automate claims submission expect 100% clean claims  don’t take no for an answer

9. PATIENT ACCESS JOURNEY  Divided registration  No pre-registration  No insurance verification  No co-pay collection  Full registration  Long wait times  Surgery scheduled w/out pre-op

10. PATIENT ACCESS TURNS THE SHIP  Implement pre-registration  On-line payments  Quality control over registration  Assembly line for patient packets  Developed check-in process  Assumed registration for diagnostic testing  Assumed registration for clinic services

11. PATIENT ACCESS HAS SAILED  Quality and eligibility software implemented  Focus on every error  Build edits to correct errors  Pre-Registration 250-400 a day  On-line credit card and check processing  No bottle-neck at registration  Maximize reimbursement

12. HOSPITAL BUSINESS OFFICE PAPER, PAPER EVERYWHERE  Inpatient claims produced without authorizations  Staff had to secure the authorization or  Claims were billed with medical records, majority of time  Room charges were often missing  Designated staff member was forwarded acct. to add missing charge  Auto insurance was always billed as prime  California does not subrogate and only ERISA health plans require payment or denial. This does not include Medicare.  Claims were often written off as commercial payer was not billed timely

13. PATIENT FINANCIAL SERVICES A NEW DAY ARRIVES  Replaced existing claims editing vendor  10% clean claims and even then “clean claims were re- billed  New claims editing vendor programmed majority of errors to improve clean claims, now at 60%  M/Cal paper claims can now be sent electronically with automated program  Continually striving to improve clean claims to virtually eliminate errors

14. PATIENT FINANCIAL SERVICES A NEW DAY ARRIVES  Claims editing vendor automatically validates eligibility & changes destination and rules of claim as appropriate  report indicates the appropriate payer so financial system can be updated.  report indicates patients with no coverage  Eligibility errors are non-existent due to front-end efficiencies  M/caid denials are automatically adjusted, as defined  Non-covered charges are automatically adjusted  Eliminated re-work and re-processing of denials

15. PATIENT FINANCIAL SERVICES A BRAVE NEW WORLD  12 staff members and 2 Supervisors  Working toward 100% clean claims  Goal for Medicare and M/Cal A/R greater than 30 days from billed date – 10%  Goal for Commercial A/R greater than 90 days from billed date- 10%  Automate anything and everything  Empower staff to be fierce agents of war

16. PROCESS IMPROVEMENT CONCEPTS Process improvement cannot be achieved with a cookie cutter approach  one solution does not fit all  nor does one product solve “everything” Equally dangerous is the self-help approach  Staff take courses and obtain certificates and titles  the process involves others outside of the focused area  the problem is – you don’t know what you don’t know. how can the best solution be achieved without experience garnered at other providers

17. LESSONS LEARNED  Challenge everything  Why can’t it be automated?  Does the task add value  Ask your colleagues  Network with fellow financial leaders  Don’t be afraid to ask the presenter, happy to help.  THANK YOU  Susan Labow-  slabow@roi-corp.com slabow@roi-corp.com  (562) 843-1211