HFMA WEBINAR. Sponsored By: TransUnion. Patient Payment Behaviors: Turn Collection Costs and Bad Debt Into Revenue

Transcription

1 HFMA WEBINAR Sponsored By: TransUnion Patient Payment Behaviors: Turn Collection Costs and Bad Debt Into Revenue Date: Tuesday, January 10, 2017 Time: 2:00 3:00 p.m. Central (12:00 1:00 pm Pacific/1:00 2:00 pm Mountain/3:00 4:00 pm Eastern) Follow this link (or paste it into a browser) to connect: Please log in 10 minutes early and test your computer connection: Enter platform where it says guest type in your full name first and last name only it is very important especially if you need CPE credit so that your attendance is accounted for You will Not be using your telephone, but will hear the audio via your computer speaker Online live seminars are broadcast over the web via Adobe Connect. You'll need a computer with a browser, Adobe Flash Player 11.2, and Internet connection. Test your connection to Adobe Connect: Login issues to check first: Are you connected to the Internet? Disable popup blocker software. Clear the browser's cache. Try connecting from another computer. Are you accessing the correct URL? Audio Issues: Close all Microsoft Applications, especially Outlook and Messenger. Having Outlook open absorbs almost 50% of the bandwidth which may cause intermittent audio interruptions. If you have questions regarding registration or connection please call HFMA Member Services at ( , ext 2). CPE Information: To receive CPE Credit for this webinar you must participate in online polling during the webinar and complete the online program evaluation within 2 working days. After 2 working days online programs will be inactive and you will not receive CPE Credit. The URL below will take you to our on-line evaluation form. You will need to enter your HFMA I.D. # (found in your confirmation ) You will also need to enter the Meeting Code: 17AT1 URL: You may also connect directly from the last slide of the live webinar Your comments are very important and enable us to bring you the highest quality Programs! To review your CPE information, please visit the HFMA web site at log into your member profile, and retrieve all CPE information (by date) within your "CPE Center.

2 Sponsored By: Leveraging Technology in the Patient Payment Experience Tuesday, January 10, 2017 (12:00 1:00 pm Pacific / 1:00 2:00 pm Mountain / 2:00 3:00 p.m. Central / 3:00 4:00 pm Eastern) Jonathan G. Wiik, MSHA, MBA Principal, Revenue Cycle Management

3 Today s Agenda: Market Overview BAI shifts Underinsured Medical Debt Market challenges Patient Payment Myths Financial engagement Key Strategies Best Practices Bad Debt Stratification Predictive Analytics Bad Debt Offset Accelerated Cash Flow Summary Q & A Open Discussion 2

4 Learning Objectives Summarize market overview of the underinsured, Balance After Insurance (BAI), and medical debt and its impact on the health care industry Describe the myths of patient payment behaviors and how to pivot your organization s strategies for a positive outcome financially Describe the key components of bad debt stratification, and how predictive analytics can help accelerate your reimbursement and improve cash flow 3

5 Market Overview

6 If food costs increased at the same rate as healthcare costs Source: NHE 1945:2011 5

7 Distribution of health plan enrollment for covered workers by plan type Source: Kaiser/HRET survey of Employer Sponsored Health Benefits, ; KPMG Survey of Employer-Sponsored Health Benefits, 1993, 1996; The Health Insurance Association of America HIAI, (1998) 6

8 Premiums continue to climb 7

9 Deductibles are out of control and rising fast Deductibles more than doubled in last 10 years Average deductible 2003 = $ = $1,273 2% vs 5% median income Percent of workers with deductibles: 2003 = 52% 2013 = 81% 8

10 ACA exchange plan deductibles are resulting in more funding gaps for patients in 2017 Bronze $6100 deductible $7,000 ACA Exchange Plans Individual Deductibles and % Change % +23% -6% +17% $6,000 $5,000 Silver $3600 deductible $4,000 $3,000 $2,000 Gold $1200 / $400 deductibles respectively Platinum $1,000 $- BRONZE SILVER GOLD PLATINUM Source: Healthpocket 9

11 Inflated Balance After Insurance (BAI) We have definitely been hearing from members that they are seeing an increase in bad debt and even in charity care for people with high-deductible health plans A lot of these folks tend to not understand the structure of their benefits until they get to the hospital, and they re not covered as thoroughly as they thought. - Via KHN, Caroline Steinberg, vice president for trends analysis at the American Hospital Association 10

12 Revenue Cycle Concerns In 2015, 53% of providers said that their primary revenue cycle concern was related to patient collections.74% of providers indicated that they saw an increase in patient responsibility compared to Instamed 2015 Survey 11

13 Patient is the new payer PAYER: 90% PAYER: 70% PATIENT: 10% PATIENT: 30% Payer Source: MGMA, Instamed 12

14 Underinsured, defined Out-of-pocket costs, excluding premiums, over the prior 12 months are equal to 10% or more of household income Out-of-pocket costs, excluding premiums, are equal to 5% or more of household income if income is under 200% of the federal poverty level Average deductible is 5% or more of household income Source: Commonwealth Fund The problem of underinsurance and how rising deductibles make it worse 13

15 Patient propensity to pay by deductible size 68% 62% 61% 50% 36% $500-$999 $1,000-$2,000 $2,001-$3,500 $3,501-$5,000 $5,001-$6,350 As patient payments increase a percentage of net patient revenue, the ability to optimize patient collections and drive payments earlier in the process, will take on even greater importance. Source: JP Morgan Chase Bank: Patient Payment Optimization. March

16 Medical debt it s a real problem A recent report issued by the consumer financial protection bureau (CFPB) finds that medical debts account for a majority (52%) of debt collections actions that appear on consumer credit reports An earlier Kaiser family foundation report found that 1 in 3 Americans struggle to pay medical bills, and that 70% who do so are insured Unpaid medical bills are the highest cause of bankruptcy filings, above both credit card and mortgage debt Once in debt, people may delay or forego other needed care to avoid incurring further unaffordable medical bills Medical Debt Among Insured Consumers: The Role of Cost Sharing, Transparency, and Consumer Assistance Jan 08, 2015 Karen Pollitz 15

17 Adults with medical bill problems had lingering financial problems because of them Commonwealth Fund The problem of underinsurance and how rising deductibles make it worse 16

18 And collecting patient payments adds cost to the hospitals Moreover, costs are likely to be significantly higher when collecting from individual patients on a per-transaction basis than when collecting from payers (as much as three times higher) On average, healthcare consumers pay more than twice as slowly as commercial payers. SOURCE: McKinsey - Hospital revenue cycle operations: Opportunities created by the ACA. May

19 Costs to collect increases over time $1.00 $0.95 As receivables devalue over time the cost to collect increases. $0.75 Cost to Collect, $0.75 $0.60 $0.50 $0.25 $0.05 Today 30 Days 60 Days 90 Days 120 Days 180 Days 1 year SOURCE: RelayHealth. Improving Self Pay At All Points of Service _.pdf 18

20 Patient Payment Myths

21 Consumers don t (or can t) pay like an insurance carrier Ideally, the high-deductible, or consumer-directed, plans would lead to consumers making smarter choices, opting to visit their physician instead of going to the emergency room for minor ailments. However, research shows that while shifting more responsibility onto consumers works out well for employers, it can lead to financial troubles for consumers and for hospitals when patients who don't understand their plans end up facing a bill they can't pay. SOURCE: Beckers. More Employee Responsibility, More Unpaid Bills? The Rise of High- Deductible Health Plans and What it Means for Hospitals Helen Admapoulos 20

22 McKinsey quarterly survey: - of consumers would pay from $200 52% to $500 or more if an estimate was provided at the point of care 74% - of insured consumers indicated that they are both able and willing to pay their out-of-pocket medical expenses up to $1,000 per year.. (90% up to $500/yr) SOURCE: JPM Key trends in healthcare patient payments 21

23 If patients are WILLING to pay, why is it not happening?! According to patients Lack of options for payment plans Poor timing of bills Difficulties coping with confusing statements or policies SOURCE: JPM Key trends in healthcare patient payments 22

24 The patient experience CLINICAL PLAN FINANCIAL PLAN 23

25 Shift in payment: Providers must focus collection efforts on both insurance companies and consumers Consumers now pay more for healthcare costs than their employer Consumers shoulder more of the up front cost to pay for their healthcare SOURCE: JPM Key trends in healthcare patient payments 24

26 Bad Debt Stratification

27 POS COLLECTIONS Best Practices Best Practices of Top-Performing Facilities: Adopt guiding principles and communicate the message Set the expectations, and establish accountability Update the mission, job descriptions, policies, and procedures Couple patients with the best funding mechanism available (ideally in advance of services) best could be charity care Overwhelming The Bad Debt Crisis - HWORKS Patient Friendly Billing Project, February 2005 Report 26

28 POS Collection Goals 100% of scheduled patients are checked for insurance eligibility, auths, and benefits 100% of scheduled patients have a funding mechanism for their services before the date of their appointment 100% of scheduled patients are told what they owe prior to their service or discharge 100% of ALL patients meet the above criteria within one (1) business day or prior to discharge Patients should be able to access and pay for their health care expenses as easily as they book a plane ticket 27

29 POS Collection Goals Best practice: set goal of 1 3% of net patient revenue HFMA MAP Set reasonable goals and stretch goals Communicate, educate, track, measure, reward Daily and monthly communication provides leadership and staff constant feedback and performance and where improvement needed Report collections by individual and department/area Recommendations, Collection Goals and/or Minimum Payments, if high deductible or No Insurance Segregate Minimum Amounts by Department Examples : Emergency Department patients $25 Scheduled Surgery patients $250 Scheduled Diagnostic patients (radiology) $50 Inpatients $250 Source: Rybar Group: Birkenshaw, Claudia, MSA Pre-service and POS Collections. Why it s important & what we do

30 5 tips on POS Collections: Engage patients at point of service. Even in the ED, hospital personnel can ask for money as long as it does not delay the provision of on-time services. For example, the bill could be discussed when the patient is waiting for test results. Simply sending a bill to the patient afterwards reduces the odds of it being paid. For a planned hospital visit, it's even better to talk about the bill before service, so patients can be sure to bring the payment with them. 2. Set expectations about payment. The patient needs to know how much a service will cost before it is provided. It's human nature: people who do not know the cost of a service are less likely to pay for it. Patients who know the exact cost can make a commitment on how much they will pay immediately and how they will pay over time, and they are more likely to comply with an agreedupon payment schedule. 3. Make sure billing data is accessible. Being able to estimate what a patient owes right at the point of service requires access to billing data from both payors and the hospital's own systems. This means having an advanced IT structure with relatively seamless dataflow, ideally within an estimator. 4. Get clinical staff's buy-in. Patients will be less likely to pay their bills if they are confronted with mixed messages about the necessity of payment. But don t require clinical staff to discuss charges. They have a different priorities and skill sets. 5. Use trained financial counselors. Clinical staff should send patients to financial counselors which should be collocated in registration. Staff in financial counseling will need training in such matters as asking for money, which can be awkward for untrained individuals. Source: Beckers. Leigh Page, 7/7/

31 POS COLLECTIONS: Best Practices SHARP HealthCare (San Diego, CA).. A patient s propensity to pay decreases as the deductible size increases," says Gerilynn Sevenikar, vice president of patient financial services. According to the hospital s data, if a patient owes $500 or less, there is a 68% chance of collecting, but this number drops to 36% if the balance is $5,000 to $6,000. "This tells the hospital recovery story for our high out-of-pocket patient," says Sevenikar. "Our experience has been that patients that have the capacity to pay, will pay, if they feel like the conditions are fair." Source: AHC Media. Tools allow registration staff to collect deductibles in addition to collecting copays 30

32 POS COLLECTIONS: Best Practices Vanderbuilt UMC (Nashville, TN).. Implemented technology to improve point-of-service collections Patient access worked closely with senior clinical and administrative leaders and the Department of Finance to implement the project s first phase. Started with copays, then deductibles for insured patients, then moved onto uninsured population asking self-pay patients to pay $300. Then moved into amounts ranging from $300 to $3,000, depending on the patient s acuity Used six months worth of charges for each acuity level and average out the amount An outside clearinghouse is used to determine the amount to be collected. "We know that the deductible amount may not be exact We inform the patient that if we collect too much on the deductible, they will be reimbursed the difference. - Marsha Kedigh, RN, MSM, director of admitting and ED registration. VUMC If the deductible is high, staff members collect a partial payment. This amount is applied first toward the copay, with the remainder applied toward the deductible. "We have been very successful with this first phase," reports Kedigh. "So far, we have seen a 50% increase in our collected amount." Source: AHC Media. Tools allow registration staff to collect deductibles in addition to collecting copays 31

33 Checklists / Gates: Insured / Self Pay 270/271 EMR 3 rd party Benefits Auth / Referral / Notification Med nec Matrix Estimator P2P FPL Preservice POS Payment Plans Loans/Cred it Eligibility Verification Estimation Collection Proceed / document Stop / escalate 32

34 POS COLLECTIONS: Best Practices 33

35 POS Collections Allows the Opportunity to Identify Several Types of Patients and Adapt your Workflow: 1. Patients that will pay automatically; ANY WAY TO CUT THIS HEADLINE DOWN SOME? 2 LINES OR ITS TOO MUCH 2. Patients that are willing to pay but need help and financial options; 3. Patients that will Never Pay They never planned on it or can t/won t do it #2 & #3 require focus: Transparent communication, education beneficial for patients Offer Prompt Pay Discounts If services elective should it be postponed? Pay before services rendered Payment arrangements Credit and debit card options Assist obtaining financial support; multi tiered approach Options include: Medicaid, Disability, Charity, COBRA, possibly paying their premium through the Health Insurance Exchange Propensity to pay; credit scoring Discounts for self pay on commonly performed procedures Source: Rybar Group: Birkenshaw, Claudia, MSA Pre-service and POS Collections. Why it s important & what we do

36 Predictive Analytics So you can rapidly determine Identity verification Prevent fraud Reduce returned mail Presumptive charity Balance your bad debt portfolio Re-classify accounts as charity Propensity to pay Bad Debt Charity Payment Prioritize high balance accounts Increase your POS collections and cash flow Help patients truly in need and collect from those who can pay COLLECTIONS 35

37 How do Predictive Analytics and Financial Clearance tools Help? Identity Verification can ensure correct patient address PHYSICIAN ORDER PATIENT INTAKE / SCHEDULING DEMOGRAPHIC / PRE-REG ID / Address / DOB / SSN / Ins / etc FINANCIAL CLEARANCE Elig / Est / FA POS COLLECTIONS / FAP CODING YES INSURANCE? DOCUMENTATION / RESULTS CHARGES ENTERED SERVICES PERFORMED Financial Aid and Propensity to Pay determines willingness versus ability to pay CLAIM SUBMITTED TO INSURANCE NO PATIENT LIABILITY? YES CHARITY? NO PATIENT PAID? IN 7-30 DAYS YES,10 % DONE $$$ NO YES NO, 90% YES Credit and/or Community Based Financial Aid can help stratify accounts into bad debt, payment or charity DONE EARLY OUT SELF PAY In Days BAD DEBT NO, 30% PATIENT PAID? NO, 50% YES, 50% 3RD PARTY COLLECTIONS / FINAL NOTICE

38 SELF-PAY Sample Front-End Workflows self-pay Probability of financial aid? 100% Charity No FA required FPL < 200% No FA required, collection zero Ask for payment YES Potential Charity Need application FPL 201%-399% Collect FA, collect payment Payment collected? Credit info returned? NO NO Not eligible for Charity FPL > 400% Payment required or reschedule services YES Done, patient proceeds Cascade to Community-Based Model Probability of financial aid? 37

39 INSURED Sample Front-End Workflows high BAI Likelihood of collection status? Likely to pay Score > 605 Ask for payment, may proceed without payment YES Estimate known, high OOP Credit info returned? Correct & resubmit (1x) Payment required Payment required or reschedule services NO NO Check address verification data Data correct? YES No data available Payment required or reschedule services 38

40 Pre-Access Propensity to Pay Batch Sample Results: Determines the optimal payment workflow for accounts 39

41 Propensity to Pay Batch Sample Results: Focuses billing resources on the most collectable accounts 40

42 Financial Clearance Workflow 41

43 High-balance patient account workflow 42

44 Summary

45 Across the country, hospitals who have implemented POS collections will assert that the benefits of POS collection far outweigh the difficulties of implementing the processes. By implementing the proper technologies, policies and training to support POS collection, hospitals and health systems in the near future will be more proficient realizing improved and timely collection from a growing population of self-pay patients. Source; Sunny Sanyal - CEO of Dallas-based T-System Inc. Improving ED Cash Flow and Patient Experience with Pointof-Service Collection. 44

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47 Thank you 46

48 Jonathan G. Wiik, MSHA, MBA Principal - Revenue Cycle Management Health Care Solutions jwiik@transunion.com 47

49 To Complete the Program Evaluation The URL below will take you to HFMA on-line evaluation form. You will need to enter your member I.D. # (can be found in your confirmation when you registered) Enter this Meeting Code: 17AT1 URL: Your comments are very important and enables us to bring you the highest quality programs! 48