Automating Estimation of Patient Services

1. Automating Estimation of Patient Services Jonathan G. Wiik, MSHA, MBA Imaging Operations Manager Boulder Community Hospital Val Kraus, MBA Director of Admissions & Case Management Boulder Community Hospital

2. Estimation of Patient Services– Introduction The overall cost to collect is typically reported between 2 and 3 percent… Front-end processes are important … especially in this era of increasingly high co-payments and consumer-directed health plans. …. the more time that passes following the patient’s discharge, the cost to collect on that account continues to go up while the chance of actually collecting payment goes down. Therefore, any payment that can be collected early in the patient encounter is more valuable in the long term. – Understanding your true costs to collect, HFMA, JAN 2006

3. Estimation of Patient Services– Introduction Why Should the Patients Pay in Advance? • Patients need to be educated and understands their financial obligations for the care they are receiving • Eliminate discharge delays • Eliminate worry about how to cover patient-pay portion • Maintain or establish good credit record • Patients earn piece of mind knowing their obligations have been met • Avoid future collection headaches The Advisory Board Company – HWORKS initiative

4. Estimation of Patient Services – Current Trends "The immediate goal is to make sure there are more people on private insurance plans. I mean, people have access to health care in America…..after all, you just go to an emergency room.” - President George W. Bush AFP PHOTO/Saul LOEB

5. Estimation of Patient Services – Objectives Session Objectives: • Discussion of trends in current Health Care market • Identify best practices to maximize collection efforts • Understand components of Estimating Pre-Service • Streamline scheduling and reception workflows • Outline training for front-line staff

6. Estimation of Patient Services Current Trends

7. Estimation of Patient Services – Current Trends The problem of the uninsured is continuing to grow. The federal government estimates that nearly 45 million individuals lacked health insurance coverage of any kind during 2005. Other research shows that tens of millions more Americans go without health coverage for shorter periods of time. Percentage of Non-elderly Adult Workers Without Health Insurance, 1987-2005 Source: Employee Benefit Research Institute estimates from the Current Population Survey, March 1988-2006 Supplements.

8. Estimation of Patient Services – Current Trends 47.4 Million Uninsured! 2006 Total = 296.1 million NOTE: Includes those over age 65. Medicaid/Other Public includes Medicaid, SCHIP, other state programs, and military-related coverage. Those enrolled in both Medicare and Medicaid (1.8% of total population) are shown as Medicare beneficiaries. SOURCE: Kaiser Commission on Medicaid and the Uninsured/Urban Institute analysis of March 2007 CPS.

9. $4.3T Dollars in Billions 16.0 16.3 16.6 16.9 17.1 17.4 17.7 18.0 18.4 18.8 19.1 19.5 NHE as a % of GDP: *2006 are actual data from the 2006 National Health Expenditure Accounts; 2007-2017 are projected data from the 2006 National Health Expenditure Accounts. Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/03_NationalHealthAccountsProjected.asp#TopOfPage (see Projected; NHE Historical and projections, 1965-2017, file nhe65-17.zip) and http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2006; file nhegdp06.zip). Estimation of Patient Services– Current Trends

10. Estimation of Patient Services – Current Trends What are a BILLION or TRILLION Dollars?!! $ 1,000,000,000,000……”12” zeros…..or….. “one-thousand-billion”: • One Million dollars stacks up 500 feet - as tall as the big pyramid in Egypt • One Billion dollars is 10 times higher than Mt. Everest • One Trillion dollars is 1/4 of the way to the Moon or 60,000 miles. • It would take someone more than 30 years to “count aloud” to one Billion • If you had gone into business on the day Jesus was born [~2013+ years ago], and your business lost a million dollars a day, day in and day out, 365 days a year, it would have taken you until October 2737 to lose just ONE Trillion dollars www.buelahman.wordpress.com/2008/05/06/what-does-a-trillion-look-like www.jimloy.com/math/trillion.htm www.scoroncocolo.com/debt.html www.ehd.org/science_technology_largenumbers.php

11. Estimation of Patient Services – Current Trends Percent who say each of the following happened to them/their family member as a result of the financial cost of dealing with cancer… Used up all or most of savings Borrowed money from relatives Unable to pay for basic necessities like food, heat, or housing Ever uninsured Declared bankruptcy Always insured Source: USA Today/Kaiser Family Foundation/Harvard School of Public Health National Survey of Households Affected by Cancer (conducted Aug 1-Sept 14, 2006)

12. Financial Burden of Medical Bills by Insurance Status, 2005 Estimation of Patient Services – Current Trends Percent of adults (age 19-64) reporting in past 12 months NOTE: Insured includes those with public or private insurance coverage. SOURCE: Kaiser Commission on Medicaid and the Uninsured analysis of the Kaiser Low-Income Coverage and Access Survey 2005: National All-Income Sample.

13. Estimation of Patient Services – Current Trends • Medical care includes all expenses, including premiums, prescriptions, and out-of-pocket costs • ** Other includes food other than groceries, alcohol, tobacco, luxury items, etc. Bureau of Economic Analyis - Personal Consumption Expenditures by Major Type of Product and Expenditure www.bea.gov/national/nipaweb/nipa_underlying/TableView.asp?SelectedTable=19&FirstYear=2007&LastYear=2008&Freq=Qtr

14. Estimation of Patient Services – Current Trends

15. Estimation of Patient Services – Current Trends Average annual premium for family of four in 20081?…. • $3,300 Average out-of-pocket costs for family of four (incl. Premium above)2?…. • $6,075 Average annual health care costs for family of four2?…. • $16,000 • National Coalition on Health Care 2008. www.nchc.org/facts/cost.shtml • Medical News Today (Coverted to 2008 using 10% inflation rate) • www.medicalnewstoday.com/articles

16. Having a job, even a full-time job, does not guarantee access to health insurance. Estimation of Patient Services – Current Trends Uninsured Non-elderly Population by Work Status of Family Head, 2005 Source: Employee Benefit Research Institute estimates from the March Current PopulationSurvey, 2006 Supplement

17. Many workers are paying higher co-payments for physician visits in HMOs. Estimation of Patient Services – Current Trends Percentage of Covered Workers Facing Various HMO Co-payment Amounts for Physician Office Visits, 1996-2006 Source: Kaiser Family Foundation/Health Research and Educational Trust.

18. Estimation of Patient Services – Current Trends Distribution of Deductibles for Employee-Only PPO Coverage, 2000-2006 Source: Kaiser Family Foundation/Health Research and Educational Trust.

19. Distribution of Health Plan Enrollment for Covered Workers, by Plan Type, 1988-2007 * * * * POS COLLECTIONS– Current Trends * Distribution is statistically different from the previous year shown (p<.05). No statistical tests were conducted for years prior to 1999. No statistical tests are conducted between 2005 and 2006 due to the addition of HDHP/SO as a new plan type in 2006. Note: Information was not obtained for POS plans in 1988. A portion of the change in plan type enrollment for 2005 is likely attributable to incorporating more recent Census Bureau estimates of the number of state and local government workers and removing federal workers from the weights. See the Survey Design and Methods Section from the 2005 Kaiser/HRET Survey of Employer-Sponsored Health Benefits for additional information. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2007; KPMG Survey of Employer-Sponsored Health Benefits, 1993, 1996; The Health Insurance Association of America (HIAA), 1988.

20. Estimation of Patient Services Industry Best Practices

21. Estimation of Patient Services – Best Practices OUR JOURNEY…

22. Estimation of Patient Services – Best Practices

23. Estimation of Patient Services – Best Practices CURRENTLY: ~25% Collection Rate or 1.2% of Gross A/R

24. Estimation of Patient Services – Best Practices DO THE MATH!: Annual self pay losses versus savings in up-front collection: Would you like to lose “$3.5M” OR “$2.0M” this year ??? - Point of Service Collections, Techniques that Work, HFMA, Sandra Wolfskill

25. Estimation of Patient Services– Best Practices Have clear intentions… • Patients First, Collections Second1 • Treat ALL patients equitably, with dignity, with respect, and with compassion2 • Serve the Urgent and Emergent needs of everyone, regardless of their ability to pay2 • Assist patients who cannot pay for their part of the care they receive2 • Provide resources, NOT restrictions • Make it an EXPECTATION 1. Point of Service Collections, Techniques that Work, HFMA, Sandra Wolfskill 2. Patient Friendly Billing Project, February 2005 Report

26. Estimation of Patient Services - 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 – “best” could be charity care Overwhelming The Bad Debt Crisis - HWORKS Patient Friendly Billing Project, February 2005 Report

27. Estimation of Patient Services – Best Practices Identify and address the “barriers”: • We do not know what to collect?! • I’m not asking people for money?! • This is against our policy?! • You have never collected this from me before?! • Public Relations and Communications • Insignificant Dollars - Point of Service Collections, Techniques that Work, HFMA, Sandra Wolfskill

28. Estimation of Patient Services Components and Tools

29. Estimation of Patient Services – Components and Tools Components of a Successful POS Collection Program: • Metrics (Data) • Executive-Level Support • Active Participation at All Levels • Policy, Procedure, Protocol and Scope • Patient Education

30. Estimation of Patient Services – Components and Tools • Metrics - DATA High Level • Billed Revenue • Reimbursement • Up-front (POS) Collections (if any) • Bad Debt Write-offs ($) Detail • Payer Mix including Self-Pay (uninsured) • Account Aging and Costs (A/R, Collections agency, etc.) • Patient Mix (Outpatient, Inpatient, ED) • Number of Scheduled Patients and Walk-ins • Modality Mix (CT, MRI, XRAY, ULTRASOUND) • Access Points and Volume at each area (Scheduling/Reception/Intake/Admissions)

31. Estimation of Patient Services - Components and Tools Why so much data?! • Get a Baseline (What can we track?) • Identify Priorities (Why is this important?) • Focus efforts (Who will be impacted?) • Establish Goals (When can we do this?) • Determine Needs (How can we do this?)

32. Estimation of Patient Services – Components and Tools KNOW your numbers…. • How much should an uninsured person pay? • What do we collect if it is not on the card? • What do we do if data is not available? • How do (or can) we estimate allowable? • What can we (or can we not) estimate in advance?

33. Estimation of Patient Services – Components and Tools Drill down to the core….

34. Estimation of Patient Services– Components and Tools 2. Executive-Level Support • Bottom-up, top-down, sideways, and up-side-down, the organizational CULTURE must live, breathe, and act consistently • Every person, from the Radiologist to the Receptionist, from the Office Manger to the patient, must clearly understand the project and its rationale • Services should not be reduced in a POS Collections Program – they should be ENHANCED

35. Estimation of Patient Services – Components and Tools 2. Executive-Level Support (cont.) Typical POS Collections Team: • Executive - VP/CFO, Owner, Office Manager • Director / Site Manager (s) • Billing and Contracting • Admissions / Scheduling / Reception • Others? • If multi-site/functional areas, leads from each access point should be represented • Should end up with 6-8 “key” personnel involved in patient and billing flow * This group should have a philosophical, business-decision discussion concerning “boundaries” PRIOR to any implementation

36. Estimation of Patient Services– Components and Tools 3. Active Participation at All Levels • Administration and Management • Billing • Financial Counselors • Clinical Personnel • Other Areas

37. Estimation of Patient Services - Components and Tools Letters/Communication do not hurt…..

38. Estimation of Patient Services– Components and Tools • Policy, Procedure, Protocol and Scope “Three Doors” for funding their care: • Insurance • No Insurance (self-pay) • Other Funding Mechanism (be specific) ONE (AND ONLY ONE) OF THE ABOVE MUST BE ELECTED BY THE PATIENT PRIOR TO RENDERING SERVICES – NO EXCEPTIONS!!!

39. Estimation of Patient Services– Components and Tools • “DOOR” will determine direction and conversation we take with the patient: • “Collection Advisory” List • Medicare/Medicaid • Third Party Liability (Work comp, MVA, Litigation) • “Agreements” • Patient Types • ED, STAT, URGENT, SAME DAY ADD-ONS • Procedure changes • Oncology, Mammography, DEXA • Indigent, Homeless, Out-of-network

40. Estimation of Patient Services– Components and Tools

41. Estimation of Patient Services – Components and Tools

42. Estimation of Patient Services– Components and Tools • Policy, Procedure, Protocol and Scope(cont.) Be VERY clear on the following: • who is asked • when the question is posed • what is said • what happens when people refuse or get upset • who is contacted for service recovery

43. Estimation of Patient Services – Components and Tools When is the question posed? • At Physician’s office? • At Scheduling? • At Reception? • On the Table? • Earlier and the more frequent, the better – ELIMINATE SURPRISES What is said? • Tailor the conversation to fit the situation…

44. Estimation of Patient Services – Components and Tools UNKNOWN INSURANCE BENEFITS KNOWN INSURANCE BENEFITS INDIGENT PROGRAMS SELF - PAY $

45. Estimation of Patient Services– Components and Tools What’s Realistic? • Scripting is difficult and does not afford flexibility, however in some cases you must ensure consistency • Key Phrases are best where possible • The 4 “C”’s: • Confident • Competent • Compassionate • Collaborative

46. Estimation of Patient Services – Components and Tools EXAMPLES: • Key Phrases • All of our patients are expected to…. • Do you know what your payment is today? • We have several options available for payment, our best is…? • We typically do ______ when patients ______…. • Most patients elect this option as it….

47. Estimation of Patient Services – Components and Tools How much should I ask for?? • Remember the Bull’s Eye • Self-Pay • Indigent Copay • Known Insurance Patient Portion • Unknown Insurance Patient Portion

48. Estimation of Patient Services– Components and Tools Strategies to Determine Amounts: • Self-pay • Take average net-deduction-in-revenue (NDR) and add 5-10% for “administrative savings” • For example, if block of business has an NDR of 25%, make the self-pay amount 35% • Take charge master and reduce billed amounts by 35% to establish Prompt Pay Fee Schedule by Category and/or line-item CPT • “ALL PATIENTS WHO PAY AT TIME OF SERVICE WHO DO NOT HAVE INSURANCE ARE ELGIBLE FOR THE PROMPT PAY DISCOUNT. PAYMENT MUST BE MADE IN FULL AT TIME OF SERVICE TO BE ELIGIBLE”

49. Estimation of Patient Services– Components and Tools Strategies to Determine Amounts: • Indigent Amounts • Program Copay, Coinsurance, Deductibles • Sliding scale to Federal Poverty Level (FPL)

50. Estimation of Patient Services– Components and Tools Strategies to Determine Amounts: • KNOWN insurance amounts • Collect what is on the card: • Copays • Coinsurance/Deductible • Estimate allowable amount(s) • BEWARE of the “floating deductible” • Have patients bring in Benefits Screen Prints/EOBs • Have patients or staff call insurance in advance • ASK patient and collect that