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©2013 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks ofExperian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners.No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public.
Collecting Every Dollar – Contract Management & Collecting from
Patients
March 14, 2014
2©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Introductions
©2012 Experian Information Solutions, Inc. All rights reserved.Experian Confidential.
3©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Economics of self-pay
Maximize Revenue with Contract Clarity
5 tips for increasing self-pay patient collections
► Develop custom collections strategies
► Analyze in-depth reporting and benchmarking
► Evaluate in-house and agency collections performance
► Monitor patient financial status insights
► Manage the outsource crossroads
Impacts and lessons learned
Questions and answers
Today’s Discussion
4©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Less Revenue, More Work
©2012 Experian Information Solutions, Inc. All rights reserved.Experian Confidential.
5©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Economics of Self-PayIncreasing Patient Responsibility
6©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Economics of Self-PayIncreasing Patient Responsibility
7©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Economics of Self-PayIncreasing Patient Responsibility
8©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Economics of Self-PayIncreasing Patient Responsibility
9©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
11 million people will be covered by Medicaid or CHIP1
25-28 million people will be covered in the health insurance exchanges (high deductible health plans)1
Hospital readmission penalties – reduced revenue
Value based purchasing program – reduced revenue
Insurance carriers taxes for ACA passed onto providers and patients
Economics of Self-PayAffordable Care Act
1Source: CBO. “Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision.” July, 2012.
$155 billion in provider payment cuts to Medicare over 10 years to pay for the legislation
10©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Economics of Self-PayFederal Deficit Spending Cuts
Source: Office of Management and Budget. “More than Half of All Federal Spending Will be on Entitlement Programs in 2012.” heritage.org. 2012.
11©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
For FY13, federal government expects to collect $2.9 trillion
FY13 estimated budget spending at $3.8 trillion
Mandatory programs such as Social Security, Medicare and Military retirement benefits are estimated to cost $2.293 trillion in FY13
Social Security is currently funded today
Medicare is underfunded as Medicare taxes do not pay for all of the benefits
Economics of Self-PayFederal Deficit Spending Cuts
Source: U.S. Budget Breakdown, Understand All the Components of the Current Budget, Kimberly Amadeo, About.com, February 20, 2012
$0.00
$1.00
$2.00
$3.00
$4.00
FY13 Budget FY13 Revenue ManadatorySpending Programs
$3.80 $2.90 $2.29 $T
rill
ion
12©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
January 2013 Deficit Deal – over next 10 years, additional $30 billion reduction in reimbursements
► $15 billion in Medicare cuts over the next ten years (physician SGR fix)1
► $10.5 billion overpayment recoupment over next three years1
► Medical disproportionate share payments to rural hospitals of $4.2 billion over the next decade1
► $4.9 billion reduction in end stage renal disease funding over the next decade1
March 2013 Sequester
► 2% cuts in Medicare payments to all providers estimated at $10 billion over the next year2
Economics of Self-PayFederal Deficit Spending Cuts
1Source: Kaiser Health News. Jordan Rau. “Behind the Fiscal Cliff Deal, a Prolonged Hospital Finance Fight.” January 2013. 2Source: California Medical Association. “Sequestration FAQ, How Will the Cuts Affect California Physicians?” March 2013.
13©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Economics of Self-PayFederal Deficit Spending Cuts
Obama proposes $400B in Medicare payment cuts over the
next decade for his FY 2015 budget
14©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Economics of self-payOutlook for providers
Increasing consumer liability
Declining insurance payments
Increasing cost pressure
Negative financial
pressures
Increasing consumer out of pocket
Rising deductibles
Medicare costs rising and reimbursements dropping
Declining margins while patient copays are increasing
Aging populations / baby boomer effect
Increasing chronic disease costs
$200 Billion cut from federal reimbursements
Estimated that 30% of
revenues will come from patient out of pocket
15©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Maximize Revenue with Contract Clarity
©2012 Experian Information Solutions, Inc. All rights reserved.Experian Confidential.
16©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Improve Payer Contract Performance
Improve Payer Contract performance by verifying the accuracy of payment received from third-party payers
Validate Reimbursement Accuracy
Monitor payer compliance with contract terms Value claims and audit remittance based on the latest payment
rules and adjudication logic
Recover Underpayments
Conduct contract-based appeals and recover lost revenue Identify sources and patterns of errors so any recurring issues
can be promptly resolved
Maximize Revenue with Contract ClarityContract Management
17©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Category CPT RangeClaim Error Rate
Nat’l Average
Radiology 70000-79999 14.8% 4.1%
Path/Lab 80000-89399 13.9% 4.5%
Medicine-Immune/Vac/Inf 90000-90799 15.8% 3.7%
Medicine-Psychiatry 90800-90899 21.8% 7.0%
Medicine-Dialysis 90900-90999 13.1% 4.5%
Medicine-Gastroenterology 91000-91299 18.7% 6.7%
Medicine-Ophthalmology 92000-92499 21.2% 3.8%
Medicine-ENT 92500-92700 24.8% 3.4%
Medicine-Cardiovascular 93300-93990 18.4% 4.2%
Medicine-Pulmonary 94000-94799 17.6% 4.6%
Medicine-Allergy 95000-95199 16.0% 2.3%
Medicine-Neurologic 95800-95975 15.1% 3.4%
Medicine-CNS 96000-96155 13.7% 4.0%
Medicine-Chemo 96400-96549 14.2% 4.2%
Medicine-Dermatology 96900-96999 33.5% 11.7%
Phys Medicine, Rehab & Osteo 97000-98943 16.3% 3.4%
Special Services-Generic 99000-99142 18.9% 5.4%
E&M 99201-99499 19.8% 1.9%
Category CPT RangeClaim Error Rate
Nat’l Average
Anesthesia 00100-01999 26.5% 6.1%
Integumentary 10000-19999 18.7% 6.1%
Musculoskeletal 20000-29999 18.8% 5.7%
Respiratory 30000-32999 21.0% 4.9%
Cardiovascular 33000-37799 19.2% 6.8%
Lymphatic 38000-38999 19.4% 7.8%
Mediastinum 39000-39999 21.5% 5.5%
Digestive System 40000-49999 16.9% 4.6%
Urinary 50000-53999 16.9% 6.9%
Male Genital 54000-55899 18.6% 5.5%
Intersex Surgery 55900-55999 0.0% 0.0%
Female Genital 56000-58999 16.4% 3.5%
Maternity 59000-59999 13.0% 2.1%
Endocrine 60000-60999 18.8% 3.4%
Nervous 61000-64999 17.9% 5.6%
Eye 65000-68899 23.4% 6.9%
Ear 69000-69989 15.8% 4.7%
Microsurgery 69990 10.6% 4.4%
National Underpayment Rate 3.0%
Maximize Revenue with Contract ClarityContract Management
18©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Negotiate More Favorable Terms
Model proposed contract terms and tailor your negotiation strategies to the factors that impact reimbursement the most
Strategically evaluate overall contract performance and assess the potential introduction of new lines of business
Leverage claim logic and historical claim data Accurately value claims by taking into account all line items and
associated claims, bundling and payment rules Apply a proposed contract change to your actual historical service mix
& entire claims history to get a more precise picture of the impact
Analyze the financial impact of policy changes
Any potential new policy changes should be compared to your actual historical service mix, to determine the financial impact
Maximize Revenue with Contract ClarityContract Analysis
19©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Best Practices for Increasing Self Pay Collections
©2012 Experian Information Solutions, Inc. All rights reserved.Experian Confidential.
Patient Data Insight
Advanced Reporting &
Analytics
Communication Strategies
20©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Tip #1 – Develop custom collections strategies
Tip #2 – Analyze in-depth reporting and benchmarking
Tip #3 – Evaluate in-house and agency collections performance
Tip #4 – Monitor patient financial status insights
Tip #5 – Manage the outsource crossroads
5 Tips for Increasing Self-Pay Patient Collections
21©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
©2012 Experian Information Solutions, Inc. All rights reserved.Experian Confidential.
Tip #1 - Develop Custom Collections StrategiesScreen Patient Accounts
Bankruptcy; 1.70%Deceased; 0.30% Insurance; 3.20%
Charity; 27.00%
Cleansed AR; 67.80%
22©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Tip #1 - Develop Custom Collections StrategiesSegment Patient Accounts
Prioritize receivables with a highly predictive healthcare collections score to prioritize inventory and produce optimal segmentation and treatment strategies.
What is it?
10% of accounts make up 50% of self- pay revenue
50% of accounts make up 90% of self- pay revenue
Work most collectable accounts first to accelerate cash
Why is it important?
How does it work?
50%-85% increase in collections per account for high segments vs. simple segmentation
Up to 2-4% negotiable reduction in agency contingency fees
Significant reduction in cost to collect
What is the value?
He
alth
care
sco
re
2
1
3
4
Op
tima
l strate
gy
Cleansed
A/R
23©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Credit data model
Based on credit report data
Higher no hit rate
Behavioral model
Uses account-level payment data
Takes months to truly perfect the model
Demographicmodel
Uses demographics data
Not as precise and higher hit rates than credit data
Optimalmodel
The optimal model uses all three above to maximize predictiveness and collections
©2012 Experian Information Solutions, Inc. All rights reserved.Experian Confidential.
Tip #1 - Develop Custom Collections StrategiesSegment Patient Accounts
24©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
High Profit AccountsLow Profit Accounts
©2012 Experian Information Solutions, Inc. All rights reserved.Experian Confidential.
Segment 1 (most collectable) represents 10% of the accounts and 50% of the revenue Segments 1 and 2 represents 50% of the accounts and 90% of the revenue
Tip #1 - Develop Custom Collections StrategiesSegment Patient Accounts
25©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Segment
Number of Accounts
% of Accounts
Initial Patient Responsibility Total Payments
Avg Initial Patient Responsibility Avg Payments
Recovery Rate
Segment 1 7,852 19.63% $645,027.46 $458,588 $82.15 $58.40 71.10%
Segment 2 4,411 11.03% $7,078,861.34 $2,195,787 $1,604.82 $497.80 31.02%
Segment 3 8,556 21.39% $26,209,369.22 $1,473,026.00 $3,063.27 $172.16 5.62%
Segment 4 7,517 18.79% $15,441,376.84 $397,309 $2,054.19 $52.85 2.57%
Segment 5 11,664 29.16% $19,525,497.01 $170,650 $1,674.00 $14.63 0.87%
Grand Total 40,000 100.00% $68,900,131.87 $4,695,360.00 $1,722.50 $117.38 6.81%
Tip #1 - Develop Custom Collections StrategiesSegment Patient Accounts
26©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Once segmented, assign and transfer accounts to the most appropriate internal or external servicing channel. Reconcile inventory and recall accounts.
What is it?
Assigns accounts to in-house or external agency that is best positioned to collect that type of account
Ability to quickly add/replace agencies
Better inventory management through real-time reconciliation
Why is it important?
How does it work?
Improved recovery rates due to using most effective collection channels
Elimination of reconciliation costs and errors
Reduction in IT and file management costs due to automated transfers
What is the value?
In-houseAgency
1
Agency 2
Agency 3
Tip #1 - Develop Custom Collections StrategiesRoute Patient Accounts
27©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Experian HealthcareData Feeds for scoring, collection triggers reconciliation & Agency offloading
AR File for Scoring &
Segmentation
AR Feed
SegmentUpdate
Segment 1(High, Med-High)
Segment 2(Medium)
Segment 3(Med-Low, Low)
Outsourced to Early Out Day 45
Outsourced to Early Out Day 7
Outsourced to Early Out Day 30
DataFeed
Agency
DataFeed
Agency
DataFeed
Agency
PrimaryBad Debt
Agency
Active A
R C
ycle Co
mp
lete
DataFeed
Agency
Sample Account Routing Workflow Optimization
Tip #1 - Develop Custom Collections StrategiesRoute Patient Accounts
28©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Tip #1 - Develop Custom Collections StrategiesAccount Routing Workflow Optimization
Basic
• Charity & Medicaid
• Return mail
Intermediate
• Segmentation code
• Call file in-house group
Advanced
• Complete agency routing
• Payment & adjustment
Example
29©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Tip #1 – Develop custom collections strategies
Tip #2 – Analyze in-depth reporting and benchmarking
Tip #3 – Evaluate in-house and agency collections performance
Tip #4 – Monitor patient financial status insights
Tip #5 – Manage the outsource crossroads
5 Tips for Increasing Self-Pay Patient Collections
30©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Collect the dots by capturing the right information
Connect the dots by leveraging the data
Decipher the dots to transform data into actionable information
Tip #2 – Analyze In-Depth Reporting & BenchmarkingManage Account Performance
31©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
©2012 Experian Information Solutions, Inc. All rights reserved.Experian Confidential.
Tip #2 – Analyze In-Depth Reporting & BenchmarkingManage Account Performance
Detailed provider reporting
► Payer scorecard
► A/R aging report
► A/R inventory report by site
► Payment plan analysis reporting
► Return mail analysis reporting
► In-house performance & inventory reports
► Segmentation performance & inventory reports
► Executive dashboards
32©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Tip #1 – Develop custom collections strategies
Tip #2 – Analyze in-depth reporting and benchmarking
Tip #3 – Evaluate in-house and agency collections performance
Tip #4 – Monitor patient financial status insights
Tip #5 – Manage the outsource crossroads
5 Tips for Increasing Self-Pay Patient Collections
33©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Benchmark against organizational and industry metrics
Analyze effectiveness of in-house and agency collections
Monitor agency performance and access performance reports
Agency Monitor Benchmark Scorecard DATA &ANALYTICS
Experian’s Agency Management Platform
EXPERAIN HEALTHCARE
Tip #3 – Evaluate In-House and Agency PerformanceManage Agency Performance
34©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
©2012 Experian Information Solutions, Inc. All rights reserved.Experian Confidential.
Tip #3 – Evaluate In-House and Agency PerformanceManage Agency Performance
Detailed agency reporting
► Agency production reports
► Dynamic agency reconciliation
► Agency inventory reports
► Collection analysis
► Performance & contact reports
► Account monitoring performance reporting
► Executive dashboards
35©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Tip #1 – Develop custom collections strategies
Tip #2 – Analyze in-depth reporting and benchmarking
Tip #3 – Evaluate in-house and agency collections performance
Tip #4 – Monitor patient financial status insights
Tip #5 – Manage the outsource crossroads
5 Tips for Increasing Self-Pay Patient Collections
36©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Perpetually monitor unpaid accounts for changes in a patient's ability to pay and timely updates to contact information.
What is it?
Immediate notification when patient’s ability to pay has changed
Important to quickly contact patient to get “wallet share”
Aged inventory usually doesn’t receive much attention
Why is it important?
How does it work?
150%-200% increase in collections per triggered account
2-3% of consumers have some sort of impacting change to their contact information or ability to pay per month
Increased collections in aged inventory
What is the value?
Updated address/ phone
New job
Paying off debts
Tip #4 – Monitor Patient Financial Status InsightsMonitor Unpaid Patient Accounts
37©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
No ability to pay
Diminishing ability to pay High ability to pay
A Patient’s Cycle of Delinquency
Patient overextended
Health issues
Job lossBankruptcy Employment
Paying off debts
Shopping for credit
New credit line
Be immediately notified when a patient’s ability to pay changes
Tip #4 – Monitor Patient Financial Status InsightsMonitor Unpaid Patient Accounts
38©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Tip #4 – Monitor Patient Financial Status InsightsMonitor Unpaid Patient Accounts
Trigger Description Recovery RateNew Auto Lease 11.60%New Home Equity Loan 10.79%New Mortgage Loan 10.19%Bankcard - Secured Line 9.02%Flexible Spending - Bankcard 8.69%Bankcard - Revolving Terms 7.30%Closed Zero Bal was 150 6.63%Paid Collection 6.45%Home Equity Inquiry 6.40%New Bank/Credit Card 6.30%Settled 6.25%New Retail Loan 4.98%
39©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Tip #1 – Develop custom collections strategies
Tip #2 – Analyze in-depth reporting and benchmarking
Tip #3 – Evaluate in-house and agency collections performance
Tip #4 – Monitor patient financial status insights
Tip #5 – Manage the outsource crossroads
5 Tips for Increasing Self-Pay Patient Collections
40©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Insourcing Model
Keep all collection activities in-house. Dedicated staff
members.
Co-Source Model
Top tiered accounts are kept in-house. Middle Tier
accounts are sent to outsource vendor.
Outsourcing
Complete outsourcing of early out collection
activities any where from day 1-60. Activity done in the name of the provider.
The outsource crossroads
41©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Determine appropriate staffing levels
42©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Determine appropriate staffing levels
43©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Work underpayments aggressively to collect the missing payments
Determine the financial impact of contract and/or policy changes to reimbursement
Self-pay dollars will become a main component to profitability
Become an expert at collecting self-pay dollars – Expertise is available
Develop a seamless and flexible collections strategy
Screen patient accounts for bankruptcy, Medicaid eligibility and charity
Segment patient accounts to determine which accounts to target first
Route patient accounts to the most effective collections team
Analyze the performance of internal collections staff and outside vendors
Monitor unpaid patient accounts for changes in financial situations
Determine the appropriate staffing levels
Technology does not have to be a deterrent to working accounts internally
Determine where you are at today and where you want to go for next steps
Impacts and Lessons Learned
44©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Questions and Answers
45©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Thank You
Shawn YatesVice President, Consulting Services
www.experian.com/healthcare
46©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public. 46©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.