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Breakthrough StrategiesLeading Practice Self-Pay SolutionsPresented by: Phil C. SolomonNC HFMA Chapter – March 17, 2009
Proprietary and ConfidentialThis information is not to be copied or otherwise utilized without the written consent of UCB, Inc.
Page 2
Session Overview
Learning Objectives:
Healthcare industry financial overview
Review the economic factors causing the rise in self-pay
Identify new tools, technologies and strategies to help you to address the increasing self-pay patient population
Breakthrough Strategies
Page 3
Session OverviewBreakthrough Strategies
“If you think you can….. or if you think you can’t….. you're right”
~ Henry Ford
Page 4
Question
The new healthcare bill will eliminate all self-pay accounts?
Breakthrough Strategies
TRUE or FALSE?Chat
Page 5
Answer
Expect increase co-pays deductibles
Premiums increases
Patients look to reduce premiums
Breakthrough Strategies
Page 6
Healthcare Industry OverviewBreakthrough Strategies
2009U.S. $ 14.2 Trillion GDP
Gross Domestic Product (GDP)consumption + investment + government spending + (exports – imports)
U.S. Healthcare $2.7 Trillion
UK Total GDP $2.67 Trillion
Page 7
Healthcare Industry OverviewBreakthrough Strategies
U.S. Healthcare $4.5 Trillion
CMS Estimates by 2019…………
Page 8
Healthcare Industry Overview
From 2006 to 2015
CMS estimates health spending growth will exceed 7.2%
(three times faster than U.S. GDP)
Breakthrough Strategies
Page 9
Self-Pay DriversBreakthrough Strategies
Economic Crisis
High Unemployment
Government Cuts
Payment Slowdown
Costly Insurance
Capital Tightening
Sluggish economy creates loss of sales
Higher unemployment reduces taxes and premiums to insurance companies
Government reduces subsidies-business’s reduced ability to offer health care coverage
Less available dollars and reduced borrowing power
Government slows payments to Providers
Increased premiums force patients to take more risk – higher deductibles & co-pays
Page 10
Self-Pay Factors
Nationally, 17% of the population under 65 has insurance – North Carolina 18% (source U.S. Census Bureau)
25 million adults under age 65 were underinsured in 2008 (source Commonwealth Fund)
Underinsured population increased over 60% from 2003 to 2009
Uninsured equals approximately 48 million Americans (source U.S. Census Bureau)
Breakthrough Strategies
Page 11
Self-Pay Factors
How large is 48 million…….
All Americans age 65 and older (35.9 million) (source Center for American Progress)
Breakthrough Strategies
Page 12
North Carolina Self-Pay FactorsBreakthrough Strategies
North Carolina
Page 13
North Carolina Self-Pay FactorsBreakthrough Strategies
North Carolina
Page 14
North Carolina Self-Pay FactorsBreakthrough Strategies
North Carolina
Page 15
North Carolina Self-Pay FactorsBreakthrough Strategies
North Carolina
Page 16
Self-Pay FactorsBreakthrough Strategies
Operational Budgets
Do More with Less
Page 17
Self-Pay FactorsBreakthrough Strategies
Distribution of Deductibles for Employee-Only PPO Coverage
48%
Source: Kaiser Family Foundation and Health Research & Educational Trust, 2000-2008 Survey of Employer Health Benefits Report.
Page 18
Self-Pay Dilemma Breakthrough Strategies
70% of Hospital Systems Report Increase in Uninsured Self-
Pay Patients(source HFMA View Live Poll June 2009)
Page 19
Self-Pay Dilemma
The Good News:
The Healthcare Industry is Growing
Breakthrough Strategies
An Uncertain
Future
Page 20
QuestionBreakthrough Strategies
What are the solutions…
Page 21
QuestionBreakthrough Strategies
What do we focus on first?
Page 22
No Risk – No RewardBreakthrough Strategies
Don’t be afraid to try something new
Engage in pilot programs
Seek new technologies
Think “outside the box”
Page 23
No Stop Gap Band-Aid SolutionsBreakthrough Strategies
Page 24
Registration ChallengesBreakthrough Strategies
Registration input accuracy rate (National Average 30%)
Incorrect insurance information entered at pre/registration
Insurance eligibility and pre-cert not verified at pre/registration
Costly to administer charity
No collection at POS - Co-pays or deductibles
Red Flag and acts of fraud
Page 25
Registration Cause-EffectBreakthrough Strategies
Missed Medicaid/Medicare/Commercial eligibility
Denials
Additional Rework
Excess Bad Debt
Missed Cobra 60 day rule
Increase in A/R – Days
Other Registration Quality Effects?
Chat
Page 26
Breakthrough Strategies
Improve registration accuracy with real time demographic validation
Enable POS collections by utilizing patient payment estimation tools
Validate past due payment history with real time systems – Ask for money pre & POS
Real time screen for charity – consumer behavior tools
Real time technologies identify COBRA – unemployed
Real time registration quality monitoring
Registration Solutions
Page 27
Breakthrough Strategies
Registration Tracking
Page 28
Eligibility Cascading WaterfallBreakthrough Strategies
Real time eligibility checkFlat fee pricingWaterfall cascade check:
Medicare/Medicaid Commercial Commercial propensity Prime, second, tertiary Patient historical data Employer Other demographics
Page 29
POS CollectionBreakthrough Strategies
Institute for Health Care Revenue Cycle Research - A Division of Zimmerman, LLC. National Pledge to Reform Uncompensated Care Reform Underway: Adopting Best Practices to Reduce Uncompensated Care and Improve the Patient Experience. a special supplement to PATIENT PAYMENT BLUEPRINT™
Page 30
POS Collection ToolsBreakthrough Strategies
Page 31
POS Action Strategy Breakthrough Strategies
Financial Assistance
You may qualify for Medicaid? Let me help you You may qualify for our charity care program?
Let me help you
Patient Pay
Will you be paying cash, check or credit card? Do you have a credit card on file with us? Let me show you how you can take advantage
of our prompt payment and self-pay discount Let’s set you up on a payment plan………..
Page 32
Self-Pay Processing ChallengesBreakthrough Strategies
Hard to identify potential charity account
Costly to process charity accounts
Lack of participation by patient
Issues in the ER
Systems lacking to track patient payment history
Where is the money? – Who can pay?
Red Flags
Page 33
Self-Pay Cause-EffectBreakthrough Strategies
Spend too much to give away free care
Patient apathy – learned behavior
Excessive mail returns
Excessive Bad Debt
Missed collection opportunity – vendors lacking latest tools
Increase in A/R – Days
Other Self-Pay Effects?Chat
Page 34
Breakthrough Strategies
Self-Pay Processing Solutions
Use Self-pay modeling solutions
Automated charity screening
Screen all self-pay at POS and BAI accounts
Real time systems assess a patient’s financial situation
Use Medicaid Wizard Questionnaire to determine eligibility
Adherence to Red Flag Policy with CRA
Page 35
Self-Pay Modeling Validation
Who should qualify for charity?
Without Self-Pay Modeling
Breakthrough Strategies
Who will pay their bill?
Page 36
Self-Pay Modeling Validation
Who will pay their bill?
Charity – High – Medium – Low – Unlikely– Need Data
With Modeling & Analytics
Breakthrough Strategies
Know how much they can pay
Page 37
Automated Charity Tools
Consistent fair evaluationUnbiased and defensibleTax-exempt - accurate classification and reporting
of community benefit for IRS Form 990 Cost reduction strategyScrutinize patients total financial profileGuard against charity fraud
Breakthrough Strategies
WHY?
HFMA Statement 15 Section 3.7 supports credit validation
Page 38
Charity Processing
Consider this: “Manual Charity Processes = variable
interpretations and applications of policy”
Breakthrough Strategies
Financial Counselor
Financial Counselor
Financial Counselor
Financial Counselor
Financial Counselor
Financial Counselor
Page 39
Charity Processing
What does it cost to process a single charity application?
Breakthrough Strategies
Chat
The Answer Is?
Financial Counselor
Financial Counselor
Financial Counselor
Financial Counselor
Financial Counselor
Financial Counselor
Page 40
Best Payment Likelihood ModelBreakthrough Strategies
Customized Model Blending Patient Payment History
Actual Patient Payment History & PatternsSimilar Patient Profile History and Patterns
Generic Propensity of Payment Model, Including: Credit Bureau Report
Demographic Profile Non-Credit Lifestyle Profiling
Page 41
Segmented Collection StrategyBreakthrough Strategies
80/20 Rule
Page 42
Work Flow OptimizationBreakthrough Strategies
Qualify & Process
Maximum Resources
Modified Work Flow
Accelerate to Bad debt
Skip Trace & Process
Page 43
Red Flag QuestionBreakthrough Strategies
What is a Red Flag Alert?
Notification of a possible terrorist threat
A continuous non paying patient
A warning from the government
An activity which indicates actual identity theft
An activity indicating the possibility of identity theft
Chat
The Answer Is?
Page 44
AnswerBreakthrough Strategies
A pattern, practice, or specific activity that indicates the possible existence of identity theft
Page 45
What is a Red Flag?Breakthrough Strategies
Red Flag Categories Alerts, notifications or warnings from a CRA Suspicious documents Suspicious personal identifying information Unusual use of, or suspicious activity relating to, the
covered account Notices from customer, victims of ID theft, law enforcement
authorities, or other persons regarding possible ID theft in connection with covered accounts held by the organization
Page 46
Best Practice Self-Pay ModelingBreakthrough Strategies
Patient Demographic DataZip+4 Census DataActual Collection Performance ValidationPatient Payment History – Custom ModelFinancial Credit Bureau DataNon-Credit Economic DataRed Flag AlertsSkip Trace Data ValidationDual Validation Income EstimatorCharity Lifestyle Evaluation
Must be delivered in real time
Page 47
Other Collection SolutionsBreakthrough Strategies
Recourse – Non-recourse funding
Good or bad?
Healthcare Credit Cards
Personal lines of credit
Page 48
Self-Pay Bad Debt ChallengesBreakthrough Strategies
Cultural behavior and lack of control slows placement to agency
Stigma about placement – conflict with mission
Myth - must use multiple agencies to maximize performance
Page 49
Self-Pay Bad Debt SolutionsBreakthrough Strategies
With new processes, only “true” bad debt accounts get placed
Know which accounts to write off sooner with modeling
Analytics and segmentation minimizes the need for champion vs. challenger
Minimize the need to work accounts too long
Page 50
Self-Pay Bad Debt Strategies
Lowest scored accounts average 50%
Reduce statement cost by accelerating placement
Low scored accounts – accelerate to collection agency
Treat each segment similarly, accounts can be reported on Medicare cost report sooner, leaving “collectable” accounts with agency longer
Breakthrough Strategies
Page 51
Question
In order to meet Medicare cost reporting guidelines, you are
required to work accounts internally for 120 days?
Breakthrough Strategies
TRUE or FALSE?Chat
Page 52
Self-Pay Reporting ChallengesBreakthrough Strategies
HIS lacks self-pay focused tools
No real time collection statistics available
No patient payment analytics readily available
Limited address validation reporting
Limited POS collection performance tracking tools available
Page 53
Self-Pay Reporting SolutionsBreakthrough Strategies
New tools designed specifically for Self-Pay
Provide instant feed back to internal staff
Identify trends and act rapidly for cost containment
Leverage dashboards to track performance
Page 54
Performance Real Time DashboardBreakthrough Strategies
Identify MeasureAdjust
Page 55
Overall BenefitsBreakthrough Strategies
Collect 5% to 10% of total self-pay inventory at POS
Reduce internal cost for government eligibility programs by 25%
Reduce charity administration costs by over 80%
Reclassify up to 20% of bad debt accounts as charity
Reduce statement cost by 25%-70%
Page 56
Overall BenefitsBreakthrough Strategies
Reduce mail returns by over 40%
Improve liquidation by 25% to 40%
Add 10% to 15% in incremental revenue through eligibility cascade
Accelerate Medicare cost reporting on bad debt segmented accounts – allowing collectable accounts to remain at agency longer