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Patient Engagement Strategies:Collect or Charity
Maximize reimbursement from those who can pay.Find financial assistance for those that can’t.
October 22, 2012
David DykeVP Revenue Cycle
RelayHealth
Kim Thompson Patient Access Manager
Basset Healthcare Network
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Your Presenters
• Kim ThompsonPatient Access Manager at Basset Healthcare Network
• David DykeVP Revenue Cycle at RelayHealth
Agenda
Transformational TimesCollecting Early is Easy… Right?The Financially Engaged PatientPresumptive Charity ConsiderationsQ&A
3
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PPACA and Regulatory ReformHealthcare’s Transformation Event?
• PPACA is transformational to healthcare – as with other industries
– 1996 – Telecommunications Act
– 1978 – Airline Deregulation
– 1999 – Financial Services Modernization Act
• Transition to be tumultuous
• Consumerism – new factor
5
TrendingGrowth in Patient Responsibility
• Patient OOP to exceed $460 Billion by 2019
– Hospital OOP >$35B
– Continues to outpace inflation and wage growth
$778/Person
$1404/Person
Hospital
All Other
Source: CMS National Health Expenditure
6
TrendingInsurance Premium Put Pressure on Families
62% of Employees with insurance spend $14,000 or MORE on annual premiums for family coverage
Source: Kaiser Francis Family Foundation, 2012 HEBS
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TrendingThe steady but slowing march of HDHP
2005
2006
2007
2008
2009
2010
2011
2012
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
0%
4%
5%
8%
8%
13%
17%
19%
Conventional HMO PPOPOS HDHP
30% Growth
62% Growth
12% Growth
Source: Kaiser Francis Family Foundation, 2012 HEBS
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Patient Attitudes toward PaymentBalance Matters, Upside with Small Balance
PatientLiability
Willingness &Ability to Pay
Typical Collection Rate
<$500 92% 65% - 75%
>$500 54% 50% - 60%
Source: 2008 McKinsey consumer healthcare payment survey
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Industry TrendsCost Up and Collections Down Over Time
Source: RelayHealth estimates & US Department of Commerce
Today 30Days
60Days
90Days
120Days
6Months
1Year
$1.00$0.95
$0.75
$0.60
$0.50
$0.25
$0.05
Cos
t to
colle
ct
$0.20
$0.40
$0.60
$0.80
As receivables devalue over time the cost to collect increases.
Cost to Collect
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TrendingBroad Consumer Internet Access
Strong usage across
• ALL geographies
• ALL incomes
• ALL ages
Source: Pew Internet & American Life Project, Generations 2010, 12/2010
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TrendingOnline Account Management
Online account management continues to growacross all demographics for all markets
18-33 34-45 45-55 55-64 65-73 74+0%
10%
20%
30%
40%
50%
60%
70%
Regularly Paying Bills OnlineBy Age Group
Growing 10-14% per year
Continued steady usage
Source: Pew Internet & American Life Project, Generations 2010, 12/2010
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TrendingBroad Consumer Mobile Internet Access
• 46% of Americans Own Smart Phones (11% YOY growth)
• 66% 18-29 age• 68% in $75k+
households
Agenda
Transformational TimesCollecting Early is Easy… Right?The Financially Engaged PatientPresumptive Charity ConsiderationsQ&A
13
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Polling Question
How are you doing with meeting your monthly point-of-service cash collection goals?
(A) We don’t have a monthly cash collection goal.
(B) We often fall short
(C) We consistently exceed it
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Primary Reasons forPatient Non-Payment
<$500 >$5000%
20%
40%
60%
80%
100%
Lack of financing options
Just received statement
Forgot or confused
Should not have to pay
Other Reasons
Addressable Factors
Source: 2008 McKinsey consumer healthcare payment survey
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Barriers to Point-of-Service Collection
Difficulty Estimating Cost
Constraints Related to Current Technologies
Difficulty gaining INTERNAL buy in to ask for payment at time of service
Difficulty accessing data from Payers
Constraints related to staff capabilities
55%
41%
28%
26%
22%
Source: HFMA’s Healthcare Financial Pulse % indicating “4” or “5” on 5-point scale where 5 = “extreme barrier” and 1 = “no barrier”http://www.hfma.org/pulse/
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Emerging Revenue Cycle Model
Moving from post-service Patient Accounting focus…
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Emerging Revenue Cycle Model
…to pre-service Patient Access focus to improve overall performance
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A Road Too Far
Not so Minnesota Nice…
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Minnesota v. Accretive/Fairview
“A hospital emergency room is a place of medical trauma and emotional suffering for patients and their families. It should be a solemn place, not a place for a financial shakedown of patients.” Attorney General Swanson.
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Not the kind of headlines you want…
• Mother told to pay $500 before she could return to her daughter’s bedside.
• Won’t discharge a newborn baby unless mother paid $800. Which she did and overpaid and had to fight for months to get the $800 back.
• A pregnant mother who was asked to pay money in the emergency room in the midst of miscarrying her first baby.
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The Social Network Effect
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Finding the Right Balance
• Tools– Most complete data– Defensible estimates
• Training– Staff– Community
• Monitoring– QA– Exceptions
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Tools
• Complete data– Physician Order Entry– Accurate & complete eligibility benefits
• Defensible collections– Co-Pay– Percentage of Deductible Deposits– Patient Specific Estimates
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Training
• Interpersonal Communication Skills
• Revenue Cycle 101 for Front End Stafff– What is a Copay and how do you find it?– What is Co-insurance and how is it calculated?– What is a Deductible and what does it tell you?– What is a High Deductible Plan and is it scary?
• How does my role fit into the big picture…
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Community Education
• Community Outreach example:
Newman Regional Hospital, Emporia,
KS
• Principals
• Policy
• Practiceshttp://www.emporiagazette.com/news/2012/aug/31/because-you-asked-nrh-charity-care/
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Monitoring
• The Registration Quality Assurance Renaissance• Disparate systems (Bolt On)
– Three to Four Primary Vendors– Some acquisitions, but most are independent
• Qualities to look for – Rules Based, Measure Quality & Collection– Real Time & Batch Integration– Proactive Staff Reminders– Individual Report Cards
Agenda
Transformational TimesCollecting Early is Easy… Right?The Financially Engaged PatientPresumptive Charity ConsiderationsQ&A
28
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What Is a Financially Engaged Patient?
• Understands their treatment• Understands their
responsibilities• Is not surprised• More likely to pay their bills• Engages in ongoing, online
communication with provider
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We’ve been doing this…
Traditional “patient checklists” focus is being clinically ready for an encounter…
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We also need to be doing…
New patient checklists help bring focus to thefinancial readiness and help create the Financially Engaged Patient…
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Together = “Engaged Patient”
When combined the Financially Engaged Patient is more likely to:• Understand their
treatment• Understand their
responsibilities• Not be surprised• Meet their financial
obligations
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Verify Every Patient“Verify” = more than just eligibility
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Stratify and Verify Every Patient
PreService
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Polling Question
Do you provide pre-service out-of-pocket estimates today?
(A) We do not create any pre-service estimates for patient.
(B) We do estimates for select services, but don’t try to collect.
(C) We do estimates for select services, and use the estimate to determine how much we collect.
(D) Estimates and collections are standard operating practice for us.
36
Maximize collections fromthose that can pay…
Precise calculation of patient financial obligation– Contract driven
– Patient driven
Location, Provider and Patient Specific– Physician Preference
– Variable Length of Stay
– Location specific
Benefits:– Create credible estimates
– Move beyond “flat rate deposits”
– Make payment easier and more feasible
– Increase Patient Engagement and patient satisfaction
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Improve collections fromthose that can pay…
Use Patient-Friendly Communication– All language should be relevant, clear and targeted
– Use best practice design to ensure print statements are easy to read
Provide financial payment plans– Offer recurring payment plans
– Utilize pay-in-full or early pay discounts
Offer Online Payment Options– Leverage consumer preferences
– Help patients engage clinically and financially
– Strengthen relationships with patients to facilitate sense of obligation and urgency to pay
Stratify and Verify Every Patient
PreService38
Collecting Critical Information
Empower staff to:
– Start or complete screening and enrollment process
– Obtain completed and signed charity application at registration
– Go Mobile
Improving:
– Self-pay / Charity classification
– Reducing escalations to Financial Aid Counselor
– Improve patient experience39
Self-pay bad debt written off that meets standard charity-eligibility guidelines.
Add mobility to improve collection of time sensitive data
Up To
31%
Agenda
Transformational TimesCollecting Early is Easy… Right?The Financially Engaged PatientPresumptive Charity ConsiderationsQ&A
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Polling Question
Do you today use a “Presumptive Charity” process to assign charity status to patient accounts?
(A)I’m not really sure what “presumptive charity” is.
(B)We are familiar with it, but don’t use it.
(C)Yes – we use patient’s FICO score.
(D)Yes – we use a vendor’s product/process.
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Charity Drivers
• IRS 990 – Schedule H
• Community Benefit and Charity Care Valuation
• Must separate charity from bad-debt
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More Headlines…that no one wants
Some Illinois Hospitals Losing Tax-exempt Status
• Insufficient Community Benefit• $1.2M Property Tax Assessment
Presumptive CharityKey Considerations
Timing (i.e., when to assign charity status)
“Process” Options– Traditional Credit Score– Income Predictors– Manual Review– Custom Charity Criteria
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Too Early? To Late?
Charity too early, and you can’t collect from a patient or third-party (Medicaid) down stream…
Charity too late and you’ve adding expenses that may have a low rate of return….
AND forego collections/recover revenue…
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Presumptive CharityProgressively Better Data
Traditional Credit Score• Should never be used• Measures character not ability to pay• Millionaire late on Tiffany’s bill – low score
Income Predictors• Directional, not absolute• Problem with “no hits”• Black box (i.e., vendor proprietary process)
Manual Review of Credit File• Intuitively correct• Labor intensive – not scalable • Problem with “no hits”• Subjective
Custom Charity Care Criteria• Automate the manual review• Easily understood (hospital specific) • Objective and defensible• 100% coverage Best
Approach
LimitedApproach
Presumptive CharityHow to make the right choice?
• There is no substitute for verified information.• Timing is key decision – culture and cost.• Important vendor considerations -
– Does their process intuitively make sense?– Is process open or proprietary?– Is process objective or subjective?– Is it defensible?– Can you describe it to your boss?
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Agenda
Transformational TimesWe Have Seen The Enemy – and it is usWhat Is a Financially Engaged Patient?Presumptive Charity ConsiderationsQ&A
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Thank You!
Kim Thompson
607-547-3506
www.bassett.org
@BassettNetwork on Twitter
David Dyke
918.481.4291
www.relayhealth.com
@RelayHealth on Twitter
