Shifting the Self-Pay Patient Paradigm: The Economic Management of the Patient Responsibility Gregory M. Snow March 15, 2013
Agenda Healthcare Reform» Overview of Key Mandates Shifting the Paradigm» Impacts to Providers and the Uninsured Population Mitigating the Risks» Patient Access Processes» Technology Enables Solutions
Healthcare Expenditures As of 2010, healthcare expenditures represent $2.6 trillion and account for 17.9% of the Gross Domestic Product (GDP). Hospital and physician services represent 51.0% of the nation s healthcare expense If reforms are not implemented, healthcare expenditures will represent 18-20% of the GDP by 2020 (over $4.0 trillion). Reducing these healthcare expenditures is one of the guiding principles for U.S. healthcare reform.
Healthcare Reform Current State The Patient Protection and Affordable Care Act (PPACA) 2014 Insurance reforms early adoption focused on payment and reimbursement methodologies and later changes planned for the healthcare delivery model. Current focus on:» State decisions about Medicaid expansion opt in or opt-out» State decisions regarding HIX» CMS pilots of healthcare delivery reforms
Patient Protection and Affordable Care Act The major efforts span a decade at a projected cost of $938B, per the Congressional Budget Office. 2014 2015 2016 2017 2018 Premium Subsides to Employers Taxes & Fees Business Tax Credit for <25 people increases to 50% Temporary reinsurance/ risk pool ends Annual fee on drug makers increase Excess tax on high-cost insurance plans Medicare/ Medicaid Medicaid expanded to 133% FPL Close doughnut hole by 2020 Private Insurance Preventive Annual $8B fee imposed on health insurance companies Increase health insurance company annual fees Small group >100 able to purchase State Role Essential Health Benefit Package Newly eligible final enrollment Imp. Quality Primary Care bonus end Long-Term Care Ind. Mandate Americans w/o insurance pay penalties Penalties increase Employer Req. Subsidies HIX Companies with >50 employees fined if FTE qualify for federal health care subsidies Federal subsidies offered to offset insurance cost State Based Health Insurance Exchange created
CMS Pilots of Healthcare Delivery Reforms Medical Homes Accountable Care Organizations Payment Bundling Reimbursement Changes for Community Health Centers, Primary Care Behavioral Health
State Decisions Regarding HIX Health Insurance Exchanges (HIX) intend to create an automated marketplace for consumers to purchase healthcare coverage The Federal default HIX will become the primary exchange utilized by States creating a possible long-term threat to Medicaid HIX s must be operational in Jan. 2014 (and will be needed for open enrollment in Oct. 2013)
State Decisions About Medicaid Expansion Will create a bifurcated program of traditional Medicaid opposed to Post-PPACA Negative implications for disproportionate share funding to hospital providers in opt out states Administrative simplification mandates may create changes in eligibility and enrollment
PPACA Impacts - Providers Medicaid expansion will reduce uninsured, expand access and result in a greater demand for healthcare services Federal grants for meaningful use and EHR adoption may have the unintended consequence of a financial system conversion to a vanilla claims platform Increased size of health systems» Resurgence of the Integrated Delivery Network model» Health systems will leverage their increased size (e.g. managed care contracts, pricing through narrow networks) Providers will be more at risk for reimbursement due to shift from fee-for-service to pay-for-performance (e.g. volume to value)
Shifting Provider Risk and Creating Up Front Opportunities Low High Fee for Service Paid for each unit of service w/o constraint on spending Pay for Coordination Additional per capita payment based on ability to manage care Pay for Performance Payments tied to objective measures of performance Reform: - Value Based Purchasing - Readmit Policy Episodic Payments Payment based on delivery of services within a given timeframe Reform: - Bundled Payment Shared Savings Shared savings from better care coordination and disease management Reform: - ACO s Capitation Shared savings from better care coordination and disease management Degree of Population Risk Transferred to provider by Payment System
PPACA Impacts to Providers Key Market Drivers Readmissions Quality of Care Value Based Purchasing Bundled Payments ACO Medical Homes Medicaid, DSH And Medicare Cuts Hospitals Challenges: 2013 and Beyond 5010 Changes E H R Implementation Financial System Conversions Physician Acquisition and Alignment ICD-10 Implementation (delayed)
Shifting the Paradigm Economic Management of Self Pay Patients Cost shifting from insurance to patient 70% of employers shift to high deductible plan in 2013 Insurance portion of payment will be reduced from 85% to 50% 50% of payment patient responsibility Growth in self-pay A/R Work-Flow / Process Patient Access / Financial Counseling / Pre-Service
Shifting the Paradigm Economic Management of Self Pay Patients FICO Score Family Size and Income Level Charity Care Score Payment Advisor Score Combination Score How are the results determined (non-coverage)
The Role of Patient Access Economic Management of Self Pay Patients Predictive Analytics Risk Segmentation (Propensity to Pay) Presumptive Charity Care Medicaid Eligibility Patient Navigator / Financial Counseling No interest Patient Payment Plans & Minimum Payments Elective vs. Non-Elective Services Eligibility (coverage vs. benefits)
Technology Enabled Solutions Economic Management of Self Pay Patients Acceptance of Credit Cards at PSC, POS and Call Center Payment Estimator Patient Statements Self Pay Cycle and Bad Debt Placement Schedule Point of Service Collections Bad Debt Reserve Schedule Work Flow
Technology Enabled Solutions Economic Management of Self Pay Patients Agency Placements (scoring) Clearinghouse / Proactive Self Pay Management Data Warehousing Health Insurance Exchanges Patient Advocates Decision Tree
Collection Agencies Scheduling Electronic Eligibility Medicaid Eligibility Payment Plans Risk Segmentation Patient Statements Predictive Analytics Financial Counseling Residual Self Pay Payment Estimator Uninsured Self Pay Health Insurance Exchange Elective vs.. Non-Elective Credit Cards
Bad Debt Reclassification to Charity Care (2010) Total Number of Accounts Reviewed - 164,064 accounts System Value of the Accounts - $101,332,176 All guarantor A/R accounts transferred to bad debt and subsequently to a collection agency in calendar year 2010 There was no activity (payments or adjustments) in the core billing systems with respect to the accounts in question The accounts were from both the clinics and hospitals
Results: Bad Debt Reclassification Value of Accounts Qualifying for Charity Care» $99.1M or 97.8% High Likelihood of Payment - $3.0M or 3.0% Medium Likelihood of Payment - $24.6M or 24.0% Low Likelihood of Payment - $39.7M of 39.0% Insufficient Data or No Credit History - $34.0M or 34.0%
Return Mail Issue Incorrect Address (hospitals) - 40.2% Incorrect Address (clinics) - 34.6% Average Amount of Monthly Returned Mail - 15,800 letters
Bad Debt & Charity Care Adjustments 2010 2011 2012 Variance Bad Debt $126.1M $102.4M $92.6M Charity Care $800K $36.3M $58.9M Decreased 26.6% Increased by 72 times Total $126.9M $138.7M $151.5M
Bad Debt Recoveries & Residual Patient Payments 2011 2012 Bad Debt Recoveries increased by 49.2% Bad Debt Recoveries $10.6M $15.8M Residual Payments decreased by 2.1% Residual Payments $76.4M $74.8M Fees decreased Total $87.0M $90.5M
Medicaid Eligibility Approvals» 2010-600» 2011-18,000 Inpatient & Outpatient Applications Obtained - 85% Approval Rate - 38% Net Revenue Impact - $31.0M Fees - $2.0M Number of Unapproved Cases - 31,000 Patients
Uninsured Patients Not Approved for Medicaid Uninsured patients not approved for Medicaid for the first 6 months of 2012 Total universe - approx. 31,000 patients Nine (9) areas / zip codes represents 14,226 patients 77.0% of the total patients have incomes greater than 100.0% of the Federal Poverty Guidelines 10.0% of the patients have incomes greater than 200.0% of the Federal Poverty Guidelines 90.0% of the total population would not have qualified for Medicaid due to income or not qualifying for a Federal category
Location of Non Approved Patients for Medicaid Kenner (70065, 70062) $10.025M 3,584 patients Baton Rouge (70726, 70816) $6.571M 3,244 patients Gretna (70056) $4.894M 1,628 patients Algiers (70114) $3.591M 1,165 patients Harvey (700580 $3.083M 1,116 patients NOLA-Carrollton (70118) $2.251M 911 patients NOLA-Jefferson (70121) $2.800M 890 patients Marrero (70072) $2.367M 868 patients Metairie (70003) $2.131M 820 patients
Found Insurance IP-OP Charge Amount Unique Visits Found insurance hospital account Found insurance clinic account Inpatient $45,155,903. 1,469 Outpatient $25,431,212. 12,184 Grand Total $70,587,115. 13,653 Inpatient $314,110. 1,040 Outpatient $268,380. 1,963 Grand Total $582,490. 3,003 Inpatient $45,470,014. 2,509 Total Outpatient $25,699,592. 14,147 Grand Total $71,169,606. 16,656
Conclusion Value Proposition C -Suite Integration of Products Cost of Rework ROI Best Practice
Questions? Thank you! gmsnow@mac.com