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The Compliance Department of the Future:Driving growth and managing risk as a strategic advisor

PwC

Introductions

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Terry Puchley

Partner

PwC Health Care Compliance Leader

Chris Schroeder

Manager

PwC Health Care Compliance Practice

Bob Miromonti

Centene Corporation

Vice President, Ethics & Compliance

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Agenda

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# Focus

1 Current Market Landscape

2 Defining Compliance in Today’s Changing Environment

3 Case Study: Transforming the Role of Compliance

4 Compliance Enablers: Tools & Methodologies

5 Q&A

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Current Market Landscape: Emerging Macro Trends

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The emergence of a new health economy

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� Individuals’ behavior is driving value.

� New financiers and partnerships are forming.

� Rapidly evolving reimbursement (e.g., pay for performance).

� Money will follow the risk.

� Managing the rising cost of care.

� Clients are challenged to articulate value in an outcomes-driven world.

� Strategies should consider alternative settings, new talent models and shortage of physicians (e.g. physician extenders).

� Technologic advances expand consumer access (e.g., HIT/ EMRs, Cyberspace-enabled apps, Virtual health solutions).

� Collaboration and convergence promote higher “health” ROI (e.g., leveraging clinical and research data on which drugs work and why).

� Transparency of price and quality.

� Baby boomers aging into Medicare.

� Growth of consumerism.

� Consumer trust of tech companies and retailers (and distrust of employers and insurers).

� Opportunity to translate retail and consumer packaged goods (CPG) insights into healthcare.

� Emerging entrants create a new competitive industry landscape, market consolidation and partnerships.

Altered Funds Flow

New Care

Delivery

Models

Realignment

of Existing

Players

Disruption

by New

Entrants

The US healthcare system is facing unprecedented market disruption, as market and policy forces are propelling a new health economy

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Implications of a new health economy

Strategic transformation

New business

New product/service

New geography

New competitors

Technology changes

Workforce changes

Competitor actions

Policy/regulatory change

Market change

Liquidity change

Margin change

Enforcement

Restructuring

Megatrends

Operational Risk

Regulatory Risk

Strategic Risk

Fin

Financial

Risk

Inability to achieve strategic goals

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Healthcare organizations are dealing with fundamental threats to their business and profit model, as changes in the new health economy are intensifying the enterprise risk environment

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Anticipated impacts of emerging risks

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Emerging risks can create shocks across the industry and at the enterprise level, from strategy through operations

� Healthcare reform

� Value model

� Business mix

� Competition

� Disrupters

� Pricing

� Population demographics

� Centers for Medicare & Medicaid Services (CMS) and Health and Human Services (HHS) regulations

� Information protection laws

� Competitive Practices

� Return on innovation

� Market differentiation

� Physician alignment strategy

� Alliances / Partnerships

� Talent shortages

� Labor Relations / Unions

� Alternative talent pools

� Succession planning

� Role of technology in consumer experience

� Data integrity

� Mobile and wearable devices

� Social media

� Quality of care

� Patient safety

� Member and Patient Experience

� Supply chain integrity

� Clinical trials/research

� Customer education and engagement

Strategy Regulatory Change

Growth Talent Technology Process

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Trends in recent regulatory actions

Actions by regulators

� Heightening focus on impacts to the beneficiaries / members, with a specific focus on

quality outcomes and delivery of care

� Using expansive data sets (e.g., Healthcare Effectiveness Data and Information Set (HEDIS) + claims + credentialing) to conduct performance-focused outcomes monitoring and auditing

� Aligning oversight approaches and techniques across products (Medicare, Medicaid, Duals and Health Insurance Exchange (HIX))

� Increasing Federal and State coordination including partnering among regulatory agencies

Impacts to oversight of health plans

� Medicare: Updating audit protocols (added Model of Care); adjusting Stars rating

methodology

� Medicaid: Contract language changes to influence behavior; increased CMS oversight

� Duals: Applying Medicare protocols with an emphasis on Model of Care and quality

� Exchanges: Increased CMS oversight of State-sponsored HIX; applying Medicare

protocols

Regulators are using inter-agency coordination across federal and state levels to drive process improvement and operational (performance) consistency, with a distinct focus on assessing delivery of care and quality outcomes

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Three healthcare payer risk trendsHealth plans in today’s marketplace face emerging risks with implications to enterprise-wide strategy, payer operations and regulatory compliance

Regulatory Compliance

Operational Models/ Governance

Access to Care and Operational Performance

� Changing business models (e.g., provider

owned payers) driving new/ synergistic governance structures

� Diversification of business, products and centralization of operations impact

processes, technology and talent

� New markets (e.g., HIX) introduce challenges in meeting needs and expectations of customer segments

� Quality = Compliance

� Reimbursement impacts (e.g., 5 STAR)

� Misaligned operating

models for new lines of business (e.g., HIX)

� Challenges with technology/ process performance, real-time availability of data and transparency

� Lacking analytic capabilities to evaluate quality and outcomes performance

� BOD/ C-suite pressures

� Regulatory organizational dictates (e.g., Medicaid; State of NY)

� Intense delegated entity (vendor) targeting by regulators (e.g., PBMs; Behavioral Health)

� Increased regulatory pressures/activity including fines and

sanctions

� Extensive use of data to measure compliance performance

� Drive operational change

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Strategy

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Defining Compliance roles and responsibilitiesEmerging risks underscore the urgency for Compliance to not only change how it partners with the business but also clarify roles and responsibilities between its function and that of Operations

� Big "C" Compliance and little "c" operational compliance: Roles and responsibilities are clearly defined where Operations “owns” (accountable, responsible for) day-to-day compliance and the Compliance Department “owns” the infrastructure to drive compliance behavior throughout the organization.

� Centralized vs. Decentralized vs. Hybrid Structures: Organizational models are designed to align with the business organization’s strategy, while providing flexibility as the organization grows and changes.

� Convergence and Business Diversification: Continuous growth of the organization’s business requires new skill sets, different approaches to coordinating across stakeholders and refined capabilities to look at data and process impacts differently.

� Implementing Member-Centric Risk Management: Playing at the intersection of Compliance, Customer Experience and Operations, the Compliance function can use its view across the entire value chain in playing the role of a strategic advisor to the business.

� Evolving Analytics: Compliance needs to be at the forefront of transforming data into information and of leveraging analytics for monitoring, auditing and advising the Board and C-suite.

� Achilles Heel: Delegated entity / vendor management oversight becomes increasingly difficult with the diversification of products, thus requiring Compliance to play a more hands-on role in risk-based oversight and collaborating with vendor/entity owners.

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� The Compliance function serves as a strategic partner to the Board, C-Suite and business by sharing risk and compliance insights based on information gathered across the value chain.

� Regular, consistent engagement with a range of departments better equips Risk and Compliance executives with more global insight into the company’s operations, associated risks and implications.

� With an end-to-end view across the enterprise, Compliance is positioned to offer valuable observations that have the potential to impact strategic business decisions.

� Compliance assists in achieving good business.

Strategy

Compliance as a strategic advisorAs healthcare organizations attempt to develop strategies for growth and expansion in the new health economy, Compliance is in a unique position to offer key stakeholders strategic support in making informed decisions

PROACTIVE ANALYSIS OF EMERGING RISKS

FRONT END STRATEGY SETTING

Efficient response to regulatory and enforcement priorities; control costs; allocate resources; improve Star ratings; enhance access to care; influence the bottom line

Actionable insights to inform business strategy

SENIOR LEADERSHIP ENGAGEMENT

Engagement

Market Advantage

StrategyAnalysis

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Analysis

Risk

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� The appropriate tone and commitment to compliance starts with the Board and C-Suite and drives a culture that fosters accountability, and results in a better customer experience.

� Compliance with regulatory and contractual requirements is leveraged as a driver for influencing how functional areas execute day-to-day operations, and ultimately, in maintaining its reputation

with customers (patients / beneficiaries) and regulators alike.

� Industry leaders and their boards are gaining new appreciation for the market advantage they can gain by integrating risk and compliance into the development and execution of their overall corporate strategy.

� Compliance is shifting its role to one in which it partners with the business, as stakeholders work together to drive product diversification and development, allocate resources appropriately, and introduce new ways to cut organizational costs while managing risk.

� The Compliance Department is privy to data analytics and information across the value chain that is used to make informed business decisions in developing strategic growth strategies, re-defining

operating models and addressing organizational challenges.

Compliance as a competitive advantageLeading healthcare organizations utilize compliance as a competitive advantage and as an enabler to achieving its strategic growth objectives

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Case Study: Transforming the Role of Compliance

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Founded as a single health plan in 1984, Centene offers unique, cost-effective coverage solutions for low-income populations through locally-based health plans and a wide range of specialty services.

Facts At-A-Glance� Membership of more than 4 million.

� Revenue in excess of $15.6B (in 2014), 49% increase year-over-year.

� Market presence across 21 states.

� Climbed higher in 2014 Fortune 500 ranking to #251, up from #303 prior year.

� Broad range of healthcare coverage products including Medicare; Medicaid; CHIP; Aged, Blind, and Disabled (ABD); Long-Term Services and Supports

(LTSS); Health Insurance Marketplace.

� Diverse portfolio of specialty companies

in behavioral care, pharmacy benefits management, life and health, vision, dental, tele-health, in-home health services and care management software.

Sources: Centene Corporation 2013 Annual Report; At-A-Glance Dated November 6, 2014; Centene Corporation Reports 2014 Fourth Quarter And Full Year Results Press Release

Centene Company ProfileCentene is a leading, multi-line healthcare enterprise that provides access to quality care for under-insured and uninsured individuals

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Centene: 30 years…and growing

TODAYTODAY

20082008

20042004

20012001

19961996

19841984 Started as a non-profit in Milwaukee, WI

Revenue: $325M Membership: 235k States: 3

Revenue: $40M Membership: 40k States: 2

Revenue: $1.0B Membership: 770k States: 7

Revenue: $3.3B Membership: 1.2M States: 8

Revenue: $15.7B Membership*: 4.1M States*: 21

* Including 0.3M non-risk members and the state of Michigan 15

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Centene solutions

Government Solutions AZ AR CA FL GA IL IN KS LA MA MI1 MN MS MO NH OH SC2 TN TX3WA WI

TANF ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●

Medicaid Expansion ● ● ● ● ● ● ●

CHIP ● ● ● ● ● ● ● ● ● ● ● ● ● ●

ABD (non-duals) ● ● ● ● ● ● ● ● ● ● ● ● ●

ABD (Medicaid only dual-eligibles ) ● ● ● ● ● ● ●

Dual Demonstrations ● ● ● ● ●

Intellectually/Developmentally Disabled ● ● ●

Long-Term Services and Supports ● ● ● ● ● ● ● ● ●

Foster Care ● ● ● ● ● ● ● ● ●

Medicare Special Needs Plan ● ● ● ● ● ●

Health Insurance Marketplaces ● ● ● ● ● ● ● ● ●

Correctional Healthcare ● ● ●

Specialty Health Solutions

Pharmacy Benefits ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●

Behavioral & Specialty Therapies ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●

Life & Health Management ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●

Primary Care Solutions for Complex Populations

● ● ● ● ● ● ●

Managed Vision ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●

Dental Benefits4 ● ● ● ● ● ● ● ● ● ● ● ● ●

Telehealth (Nurse Triage and Education Line) ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●

1 MI health plan implementation in-process and are expected to commence Q2 20152 SC dual demonstration is anticipated to start in January 2015.3 TX dual demonstration is anticipated to start in March 2015.4 Centene is in process of transitioning dental services from external vendors to our new dental benefit management subsidiary.

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Evolving Centene’s Compliance organizationCentene’s Compliance Department expanded to keep pace with its enterprise-wide market strategy and accelerated growth objectives

CategoryHistorical State (As of 2012)

Future State(In Flight)

Type of OrganizationalStructure

� Reflected the broader enterprise operational strategy of decentralizationat the local state levels.

� Shifting from decentralized to hybrid model(e.g., Medicare centralized at corporate level, Medicaid decentralized at state level).

Headcount(FTEs)

� Corporate Compliance FTEs totaled 30 FTEs, as of 2012 year-end.

� Growth of Corporate Compliance FTEs to 53 (budgeted for 2015), with goals to increase to 80 by 2016.

Scope of Responsibilities

� Dedicated Compliance leadership and personnel at the Corporate and business unit levels, with focus on Medicare, Medicaid and specialty services.

� Expansion of scope of responsibilities to include those previously owned by the business (e.g., FWA, subrogation) as well as delegated vendor oversight.

� Responsibilities expanded from Medicare and Medicaid to include support of diversified product portfolio (e.g., Duals, Health Insurance Marketplace, specialty pharmacy, in-home primary care, correctional health care).

Role of Compliance Relative to the Enterprise

� Tendency of the Compliance Department to serve as the “catch-all” for responsibilities with no clear functional owner.

� Increased demand for Compliance personnel with the implementation of 11 health plans in Q4 of 2012 alone.

� Increased stature of Compliance with visibility at the C-suite level, including with CEO and Chair of the Board.

� Transition of responsibilities for health plan operations to the business.

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Shift in mind sets towards risks

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The new health economy necessitates a shift in the way that healthcare organizations think about and manage risks

Old risk mind set

Risk = Red light

Protection

Checklist

-

Event driven

Impediment to progress

Question everything

Risk aware

Reactive -

Fear

New risk mind set

Risk = Green light

Success

Precision, analytics, rigor,

smarts

Mission driven

Business accelerator

Consider everything

Risk agile

Proactive, dynamic, innovative

Confidence

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Compliance organization assessment and design

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Key Objectives

� Identify opportunities to enhance Centene’s Compliance governance structure, roles and responsibilities, and management practices to motivate, measure, monitor and achieve compliance with regulatory and contractual requirements.

� Design the “blueprint” to transform how Centene delivers compliance to the enterprise, with a focused effort to transition from the “red light” to “green light” mind set.

� Determine how to strengthen the Compliance Department’s position to:

• Drive value as a strategic advisor;

• Facilitate growth across the enterprise; and

• Enable flexibility to respond to market changes.

� Review current skill sets and workload distribution for appropriateness in supporting the growth of the business and identification of development needs.

� Design and align a proposed future state organization structure and staffing model

with the corporate growth strategy.

� Identify opportunities to improve the organizational culture toward compliance.

Compliance leadership recognized that changes were needed to keep up with the organization’s growth strategy and to shift its mind set in addressing and managing risks in the new health economy

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Compliance operating model

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Strengths of Centene’s Compliance Department

� Centene’s Compliance operating model is not a “one size fits all”, where Centene has adapted a

hybrid model to fit the needs of its diverse set of businesses and products.

� Centene’s Compliance organization is built such that each business unit has the appropriate leadership and support.

� Centene’s Compliance governance model is

aligned closely with the organization’s growth strategy, allowing for the appropriate oversight and for efficiencies in escalating issues to leadership.

� Corporate Compliance provides consistent processes and tools for the different Compliance operating models (e.g., Committee reporting, escalation processes/criteria, CAP

follow-up).

Opportunities for Centene’s Compliance Department

� Build upon the existing governance model to establish more consistent oversight

mechanisms, risk categorization and escalation protocols to the executive leadership level (beyond CEO and Chair of the Board).

� Continue to enhance the Compliance operating

model at the business unit level, with the intent to drive the business to be more self-sufficient and proficient with regulatory and contractual obligations.

� Further refine escalation protocols, where Compliance elevates the right risks at the right time to the appropriate leadership level(s) for resolution.

Centene’s Compliance structures have grown over the years based on growth objectives to support new business and products (e.g., Medicare, Duals, Health Insurance Marketplace)

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Compliance skill sets, tools and methodologies

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Strengths of Centene’s Compliance Department

� Compliance possesses the subject matter expertise, skill sets and tools to drive

regulatory and contractual compliance.

� Compliance has been versatile in its ability to assist with operational-related tasks as needed (e.g., COB, subrogation, grievances & appeals).

� Compliance has established consistent processes for triaging, tracking, responding, and reporting potential compliance issues for

leadership to act upon.

� Compliance-specific enterprise risk calls and risk reports serve as mechanisms to mitigate emerging risks and to share leading practices.

� Compliance implemented a formal repository to track enterprise-wide compliance issues

identified and communicated by regulators.

Opportunities for Centene’s Compliance Department

� Invest in recruiting talent to serve as “hybrid” Compliance liaisons trained to have deeper

expertise in regulatory compliance and to serve as subject matter specialists to the Compliance function itself.

� Continue to periodically assess and align

Compliance department personnel with the appropriate roles and responsibilities, while considering career development, succession planning and the company’s growth objectives.

� Conduct an annual enterprise-wide compliance risk assessment for all products based on input receive from impacted stakeholders.

� Continue to enhance and evolve the compliance monitoring program and reporting dashboards.

Centene’s Compliance personnel's array of expertise, compliance tools and risk identification mechanisms allow for proactive monitoring of regulatory and contractual compliance

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Compliance as a strategic advisor

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Strengths of Centene’s Compliance Department

� Compliance is positioned as a strategic partner to senior leadership and business in mitigating

enterprise risks.

� Compliance is engaged upfront by Corporate and business unit leadership in strategic planning business development and implementation efforts.

� Compliance has positioned itself to be consulted by senior leadership in identifying opportunities for streamlining operations.

� Compliance expertise of contractual

requirements has identified cost savings initiatives for the business (e.g., standardization of Medicaid claims forms). Opportunities for Centene’s

Compliance Department

� Continue to leverage Compliance’s expertise of regulatory requirements to advise the business

on operational efficiencies across multiple functional areas (e.g., encounter data collection and submission process).

� Apply knowledge of regulations across both operations and IT to drive decisions affecting key processes (e.g., HIPAA transaction code sets applied to coordination of benefits).

� Expand Compliance’s role as a strategic advisor to include the Board and C-suite leadership at the corporate level.

� Continue to transition the role of Compliance away from “doing it all” for the business to one in which it serves in a more consultative and trusted advisor capacity.

Centene’s Compliance Department has enjoyed success in being engaged by the business in the strategic planning process; leadership looks to utilize its regulatory expertise to identify further operational improvements

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� Strengthen Compliance’s established role as a trusted strategic advisor and partner to the business, at the Corporate and business unit levels

� Maintain the momentum established to date in promoting transparency of

compliance risks and issues at the C-suite level

� Educate the business stakeholders regarding the types of risks and issues which warrant attention and escalation

� Continue to be engaged early on by its business counterparts in the

strategic planning and decision-making process

� Promote a culture of accountability by the business to embrace and own compliance in day-to-day operations

� Refine the type and level of detailed information reflected in compliance

monitoring reports distributed to executive and senior leadership

Centene’s continued path forwardCentene has identified several key priorities to drive forward in the continued evolution of its Compliance Department and its expanded role across the enterprise

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Compliance Enablers: Tools & Methodologies

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Turning data into information

Integration of regulatory / compliance requirements into operational performance

reporting

Organizations are re-designing operational reports to ensure that how they manage their business is coupled with how they meet regulatory and compliance requirements

Focus Area Description

� Improved operational performance

� Increased regulatory compliance� Reduced level of effort related to

organizational compliance

Results Achieved

Transformation of management and executive-level dashboards

Organizations are evolving dashboards to implement more “predictive” capabilities to trend compliance and integrate “indicator flags” to detect operational or compliance failures

� Implemented proactive approach to managing both compliance and operational performance

� Increased regulatory compliance

Evolving analytics for compliance-related audits and

reviews

More advanced organizations are using targeted sampling methodology aligned with that of CMS, as opposed to random sampling

� Reduced effort by business areas to conduct audits

� Enhanced value to the business in streamlining remediation and prevention efforts

Profiling of providers to link compliance, care management

and quality together

Companies are comparing quality measures across providers with relevant data sets (HEDIS, claims) to look at the end-to-end care management value chain

� Enhanced view into the linkage of quality performance to outcomes, down to provider level

� Remaining on pace with direction regulators are headed

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Leading healthcare organizations are making significant investments in enhancing tools and methodologies to turn data into information

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Compliance risk assessments

Risk assessments will help an organization:

� Align and prioritize limited resources to address high risk areas and coordinate efforts across the various risk management functions and operations.

� Provide the Compliance Office with a foundation on which to build and enhance the compliance program (org structure, policies and procedures, training, monitoring, auditing, etc.).

� Establish a structured and disciplined approach to collaborating and working with the business in performing subsequent compliance risk assessments which can be utilized to mitigate emerging risks and the impact of changing business models.

Risk Assessment Considerations

Strategic, operational, regulatory and financial

risks

Historical levels of scrutiny

Suspected weaknesses

Type and breadth of impact

Reputational implications

Delegated / contract providers

2. Inputs to

audit and

monitoring

plans

4. Enhance

program

1. Gauge risk

exposure

3. Allocate

resources

Anchor point for

Compliance strategy

Perform Risk

Assessment

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Leading Compliance Departments are using risk assessments as the foundation for driving monitoring and auditing plans

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Number Top Risk Category Trend

1 Formulary Administration

2 Appeals & Grievances

3 Coverage Determinations

4 Privacy / Data Protection

5 Organization Determinations

6 Clinical Delivery

7 Model of Care

8 Medicare Part B

9 Professional Licensing & Credentialing

10 Fraud, Waste and Abuse

11 Sales & Marketing

12 Business Licensing

13 Sourcing (Domestic and Import)

14 Environmental

15 Anti-Bribery / Anti-Corruption

Compliance Risk Profile

Compliance Risk Assessment Heat Map

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Compliance risk assessments (continued)Leading healthcare organizations partner with the business in utilizing risk assessment tools to identify and mitigate risks to the enterprise strategy and operations

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Leveraging technology

Business Area Relevant Examples*

Appeals & Grievances

• Standard Grievances Resolution Turnaround Time (TAT): 95% within 30 calendar days• Expedited Reconsideration Resolution TAT: 95% within 72 hours• Claims Reconsideration IRE Overturn Effectuation: 95% within 30 calendar days

Claims• Payment of Non-Contracted Providers Clean Claims TAT: 95% within 30 calendar days • Payment of Contracted Providers Claims TAT: 95% within 60 calendar days from date of receipt• Denial of Non-Contracted, Non-Clean Claims TAT: 95% within 60 days

Customer Service

• Customer Call Center Average Hold Time: Not to exceed 2 minutes after Interactive Voice Response (IVR) or touch tone response and before reaching a live person

• Customer Call Center Average Speed of Answer: 80% within 30 seconds• Customer Call Center Disconnect Rate: Not to exceed 5%

Enrollment• Acknowledgement of Receipt of Complete Enrollment Application: 95% within 10 calendar days of receipt• Confirmation of Enrollment Sent to Member: 95% within 10 calendar days of Transaction Reply Report (TRR) receipt• Notice of CMS Rejection of Enrollment Sent to Enrollee: 95% within 10 calendar days of TRR receipt

Utilization Management

• Pre-Service Auth Routine Notice of Extension: 95% within 14 calendar days• Pre-Service Auth Urgent Resolution TAT (Extended): 95% within 3 calendar days of oral notice + up to 14-day

extension• Expedited Drug Benefit Coverage Determination TAT: 95% within 24 hours

* Note: Thresholds set for KPI metrics based on regulatory requirements / expectations and/or plan sponsor internal standards of operation.

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Technology systems and applications can be used to capture and report metrics for evaluating and monitoring performance against regulatory requirements

To improve the use of technology:

� Core source systems need to be configured appropriately to capture data representative of operational performance and to allow for the extraction of data sets.

� Extracted data needs to be stored in and readily accessible through the designated data warehouse.

� Historical data must be maintained to enable trending and the comparison of data across different time periods.

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Data analytics applied to operational reporting

Information received during compliance monitoring & auditing

Industry-wide risk associated with Data Sample

Compliance activities implemented to further identify and mitigate risk

Conduct review of claims

priced with fee schedule ABC

to determine validity

Conduct review of process

that led to assignment of ABC

to providers

Initiate process to re-

adjudicate claims that were

impacted

Initiate process to improve

process for assigning fee

schedules to prevent future

issues

Analysis of claim

payments indicates a

relatively high rate of

claims priced with

fee schedule ABC

Claim adjudication

and pricing impacts

member and

provider

satisfaction and is

subject to audit

� Leading organizations are able to use operational data analytics to obtain real-time results for producing compliance monitoring results.

� Proactive analysis of data enables organizations to assess current operations against predetermined measurement bands and to detect trends that may indicate the potential for non-compliance.

� When used appropriately, data analytics offers organizations the ability to maintain and/or course-correct operations in alignment with regulatory requirements, and in turn, the power to drive health outcomes.

Data Sample Defining Risk Risk Mitigation

� Avoid negative

impact to

member/provider

satisfaction

� Avoid government

sanctions/ fines

� Protect brand

integrity

� Reduce risk of

under or over

payment

BUSINESS

IMPACT

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Leading healthcare organizations utilize data analytics in their reporting tools to transform data into information that can help decision-makers focus on the appropriate areas warranting their attention

Data analytics applied to targeted auditing

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Leading healthcare organizations utilize data analytics to inform targeted auditing efforts, which in turn, allows for additional benefits to be realized

While risk assessments drive monitoring and auditing plans, data analytics can be used to inform auditing efforts by identifying the areas of highest risk warranting further investigation and testing.

Benefits RealizedApplied Data Analytics Defined

� Focuses on problem areas from the start rather than relying on

statistically valid samples.

� Decreases dramatically the level of effort required of the business and Compliance/Internal Audit to perform audits (driven by decreased sample size).

� Increases the number of reviews that can be performed during the year without increasing staff headcount.

� Provides real-time feedback to the business on areas for improvement with specific considerations identified.

� Methodology based on targeted sampling (similar to that of

regulators), as opposed to random, statistically valid sampling.

� Analysis of data sets to identify specific cases indicative of non-compliant processes and areas that are expected to fail audits.

� Identification of highest risk areas representing functional-level processes and activities to be further tested against regulations.

� Foundation for validating and/or identifying the appropriate operational metrics moving forward.

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Changing how data is presented

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Leading healthcare organizations are altering their approach and execution in presenting data to decision-makers at varying levels within the organization

T

Succinct

Meaningful

Actionable

Timely

Visually Engaging

Organized

Informative - Not Actionable

Actionable Data Relevant to Business Operations

Traditional Compliance

� Training completion rates

� Hotline calls resolved

� Complaints

Strategic Compliance

� Internal Trends

� Emerging Trends

� Analysis

� Decisions Needed / Recommendations

� Leading risk and compliance functions are strategic in the manner in which they present data to the organization’s board.

� Clear translation and presentation of significant data provides focus for strategic planning, operational performance, risk management and compliance.

Presenting Data

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Operational performance monitoring

*Services shown are examples and may be considered medically necessary in certain situations

Identification of trends/outliers that may require additional follow-up (e.g. providers with high volumes)

Identification of claims that were auto adjudicated (system did not stop payment) and which staff are approving payments in large volumes.

Provides insight to payments for services* that should not have been billed by providers or paid by the payer

Volume & Charge By Procedure Volume & Charge By Provider

Volume by Operator ID

In this example, dashboards with a particular focus on claims data can be used to identify cases where payments were disbursed for services not medically necessary.

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Leading healthcare organizations utilize analytics and dashboard reporting to identify trends and outliers that are indicative of non-compliant performance

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Executive-level reporting

� Effective dashboards turn data into information.

� An effective visual dashboard report can provide a real-time picture of an organization’s compliance activities and their relevance to business operations as a whole.

� Dashboards provide a visual overview of the core results stemming from data analytics, including compliance metrics and potential risks that should be top of mind for board members (e.g., enumeration of current and anticipated internal, regulatory and emergent risk issues).

� New data analytics and visualization tools are changing the nature of reporting by providing dynamic, drill-down capabilities that enable a more interactive relationship with data.

This illustrative example of a compliance dashboard provides an overview of key enterprise risk and compliance issues of concern for board members

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Leading healthcare organizations blend operational reporting, data analytics and targeted auditing into quality information for decision-making

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Final Remarks

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Key takeaways

Analysis

Risk

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� The new health economy is driving major changes to the way organizations deliver care and services to patients / beneficiaries and to the approaches they take to compete in the marketplace.

� The Board of Directors and C-suite are looking to risk management personnel, in particular Compliance Officers, to enable and drive growth strategies with flexibility.

� The Compliance Office of the future needs to incorporate new operating models, enhanced skill sets and innovative tools and technology in how it engages with the

business, provide insights to senior leadership and influence compliance management across the enterprise.

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Leading healthcare organizations are leveraging compliance to help drive growth and accountability throughout the enterprise and to gain a competitive advantage in the marketplace

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Questions?

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Thank you!

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Terry PuchleyPwC Phone: (213) 356-6890

E-mail: terry.puchley@us.pwc.com

Chris SchroederPwCPhone: (213) 217-3518

E-mail: christopher.j.schroeder@us.pwc.com

Robert (Bob) MiromontiCentenePhone: (314) 505-6403

E-mail: rmiromonti@centene.com

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