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HFMA Treasury Program

Revenue Cycle Discussion: Scenarios for the Future

December 15, 2011

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Healthcare Reform Landscape

Scenarios for the Future

Next Steps

Agenda

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Bundled Payment Highlights Model Episode Anchor Services included

in bundle Payment from CMS Reconciliation,

spending calculation and disbursement

Submission Deadline

1: Retrospective Acute Care Hospital Stay Only

Acute care hospital admission at awardee or Bundled Payment participating organization

Part A inpatient hospital services

Traditional FFS w/predetermined discount Physician: Traditional FFS

Prospective discount on Part A payments

LOI: 10/6/11 Final:11/18/11

2: Retrospective Acute Care Hospital Stay plus Post-Acute Care

Acute care hospital admission at awardee or Bundled Payment participating organization

Physician svcs Inpatient svcs Inpatient re- admission svc LTHC, IRF, SNF, HHA Part B Drug

Traditional FFS (ultimate reconciliation w/predetermined target price*)

If FFS pmts are less than predetermined target price, Medicare pays awardee. If they exceed, awardee pays Medicare .

LOI: 11/4/11 Final: 3/15/12

3: Retrospective Post-Acute Care Only

SNF, IRF, HHA or LTCH services w/awardee or Bundled Payment participating organization

Physician svcs Inpatient re- admission svc LTHC, IRF, SNF, HHA Part B Drug

Traditional FFS (ultimate reconciliation w/predetermined target price*)

If FFS pmts are less than predetermined target price, Medicare pays awardee. If they exceed, awardee pays Medicare.

LOI: 11/4/11 Final: 3/15/12

4: Acute Care Hospital Stay Only

Acute care hospital admission at awardee or Bundled Payment participating organization

Physician svcs Inpatient svcs Inpatient re- admission svc

Prospectively established bundled pmt Physician: Paid by acute care hosp.

Single prospectively established bundled pmt

LOI: 11/4/11 Final: 3/15/12

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Timeline of Key Components

Operating Rule Adoption Date Effective Date

Eligibility (270/271) July 1, 2011 January 1, 2013

Claim Status (276) July 1, 2011 January 1 , 2013

EFT July 1, 2012 January 1, 2014*

Payment and Remittance Advice (835) July 1, 2012 January 1, 2014*

Health Plan Identifier July 1, 2012 January 1, 2014

Health Claims and Attachments July 1, 2014 July 1, 2016**

ICD-9 to ICD-10 Crosswalk (Section 10109) No date specified No date specified***

Notes: * Health plan certification of compliance required by Dec. 31, 2013 ** Health plan certification of compliance required by Dec. 31, 2015 *** Review process by Jan. 1, 2011 and ICD-10 required by Oct. 1, 2013

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Scenarios for the Future

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Healthcare Revenue Cycle

Registration & POS

Collections

Pre-Registration

& POS Collections

Claims Processing Coding Charge

Capture

Financial Counseling

& POS Collections

Pre-Certification & Insurance Verification

Scheduling Payment Processing Collections

Patient Access

Documentation

Revenue Cycle/PFS

Eligibility/enrollment Payment estimation Point-of-care collection Non-clinical payments

Claim submission/status Payment & posting Statement print Patient payments Exception/Denial Management

Opportunity exists to help streamline and automate the remittance/payment reconciliation process

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▪ Electronification of most core healthcare transactions

▪ Standardization across HIPAA-compliant transaction types

▪ Range of innovative, technology-driven solutions being tested, e.g., – Payment estimation – Card-based POS solutions – Eligibility checks – Propensity to pay – Online bill pay – E-lock box – Claims editing – Collections

▪ Integration of payment and medical data to enable medical risk management, payment optimization, and profitability management

▪ Requires digitization, standardization, and normalization of clinical data and integration of payment and HIE infrastructure

▪ Driven by fundamental shift to more outcome based reimbursement

Administrative Simplification - Straight-thru processing

Scenario 1

Retail Revenue Cycle - New payment solutions

Sophisticated medical and payment risk management

Scenario 2

Scenario 3

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Pre-Certification & Insurance Verification

Scheduling

New Payment Solutions

Claims Processing Coding

Pre-Registration

& POS Collections

Charge Capture

Payment Processing Collections

Financial Counseling

& POS Collections

Eligibility – real-time eligibility transactions containing remaining deductible, check current status of existing claims , specific benefits and detailed information

Payment Estimation –real-time out-of-pocket estimates

Propensity to Pay – scoring mechanism to determine payment history and ability to pay

Card-based POS solutions – debit/credit card swipe machines, virtual terminals, mobile commerce, check –ACH conversion

Payment Collection – online bill presentment and pay, eLockbox, balance after insurance direct from payer Reconciliation – automated tool to reconcile confirmed bank deposits back to expected system deposit

Auto-posting to Patient Accounting System – electronic file formatted to auto-post into patient accounting system (i.e. Epic)

Registration & POS

Collections

Scenario 1

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Patient Front Office Payment Solutions

What is it? ■ Web-based service for verifying eligibility and claims status in real-time and collecting patient

payments at point-of-service

Key Features: ■ Submit eligibility and claims status inquires to hundreds of payers in real-time ■ HIPAA compliant messaging provides access to full plan coverage information ■ Process credit and debit card transactions easily using integrated PC card swipe readers ■ Append service visit information to all payments for posting to your patient accounting system ■ Present patients the opportunity to pay outstanding balances on recently adjudicated claims

Key Benefits:

■ Increases patient (consumer) balances collected at point-of-service ■ Improves the accuracy and timeliness of patient insurance coverage plan information ■ Advises patients on their financial responsibility prior to receiving healthcare services ■ Reduces manual work associated with posting co-payment and co-insurance payments collect in

front office ■ Equips front office staff with real-time information to improve point-of-service interaction

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How a Patient Front Office Payment Solution could work

■ When a patient comes to front desk for registration, front office staff collects the patient’s insurance information

■ Once the patient information is collected, data is transmitted to participating payers via HIPAA compliant messaging ■ 270 for real-time eligibility query ■ 271 for confirmation of current plan detail

■ Patient presents credit or debit card for co-payment, which is swiped using a mini card swipe reader

■ Cash and check payments can be recorded on a specific form in the application interface

■ System can perform real-time claims status check to determine if any outstanding claims have been adjudicated by the payer, and front office staff presents the patient with the option to settle residual co-insurance amount ■ 276 for real-time claims status inquiry ■ 277 for confirmation of current claims adjudication status

■ Remittance data is made available through a daily electronic file transmission for posting to your

patient accounting system

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Summary of Key Benefits a Patient Front Office Solution

Simplifying point-of-service collections:

■ By creating a process in which up-front patient collections are possible. Help providers improve collection rates and speed their revenue cycle

■ With a real-time view of outstanding claims at point-of-service, providers can gain insight into outstanding balances and focus more proactively on collections

■ Simplifying time-consuming eligibility verification and payment processes can mean lower administrative and processing costs and improved cash flow for providers

■ As a hosted, web-based application, providers accomplish all of this in a manner that is least disruptive existing business processes

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Patient Payment Online Portal

What Is it? ■ A secure web portal that presents patient bills, and options for collecting patient

payments Key Features:

■ Customizable patient bill presentment ■ Card and ACH payment options ■ Can be used by patient, or Provider Customer Service Representatives to make

payment(s) ■ One-time payment, or recurring payment options ■ Statement history available online for a period of time

Key Benefits:

■ Accelerated payment collection ■ Online payment data integration with Patient Payment Lockbox

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Create infrastructure for more efficient consumer-to-provider payments Automated payments Structured payment plans

Utilize retail banking technology to capture payment and reduce costs Mobile Banking

Google Wallet Social Media

Serve, retain and market services to patients Online Bill Pay

Develop partnerships between insurers and providers Payment assurance Risk sharing

Retail Revenue Cycle Summary

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Straight-Thru Processing Solutions

Registration & POS

Collections

Pre-Registration

& POS Collections

Coding Charge Capture

Financial Counseling

& POS Collections

Pre-Certification & Insurance Verification

Scheduling

Claim submission - EDI 837 claim submission file to payers

Wholesale Lockbox – receipt of paper EOBs and checks

Paper to Electronic Conversion – conversion of paper to customized electronic files, using IOCR technology, for auto-posting

Receipt of EFT and ERA – enrollment and payer migration to EFT/ERA and receipt of existing 835s/EFTs for re-association and

auto-posting

Reconciliation of ERA to payment – automated matching of EFTs to 835s and distribution of funded and unfunded 835s

Denial Management - workflow tools to manage exceptions

Contract Management – claims pricing engine providing underpayment data

Patient Pay Online Portal - secure web portal that presents patient bills, and options for collecting patient payments

Patient Statement Print – customized service for printing patient statements with automated scan-line

Patient Pay Lockbox - electronically captures patient coupon and payment data and transmits via customized file for auto-

posting

Patient Refunds – comprehensive disbursement support and account management tool

Payment Processing Collections

Claims Processing

Scenario 2

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Automating Commercial Payment Process via Lockbox

Key Product Features:

■ Paper EOBs are imaged and key fields are captured and indexed ■ The client’s billing information is utilized to enhance the data with information not remitted

by the payer ■ Captured information is validated and an electronic ANSI 835 file is created ■ The 835 files are submitted to the provider to load into their PAS and relieve A/R

Key Client Benefits:

■ Automates posting to the Patient Accounting System (PAS): Posting rates between 85%-93% ■ Reduces posting errors ■ Reduces manual data entry

■ Handles inconsistencies in EOB presentation and format ■ Provides searchable Web-based archive that retains a record of remittances for up to 7

years

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Automating Self Pay (Patient) Payment Process via Lockbox

The Patient Payments Lockbox can enable you to: Improve your revenue cycle time and accounts receivable (AR) days through reduced mail float and accelerated collections

Lower processing costs through the patient payment information

Use of high-speed, scannable technology for both card and check payments

Improve efficiency by providing remittance data and associated patient account information in the same electronic data stream for automated posting and reconciliation

Reduce the time and inaccuracy of manual data maintenance and related research by providing paper remittance documents in electronic formats

Maintain best-in-class security of patient payment information

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Promote standardization and electronification of payer-to-provider transactions

Financial Institutions are well-positioned to increase adoption and assist enforcement as many healthcare transactions are financial transactions

Promote multi-stakeholder industry collaboration on administrative initiatives

CAQH/CORE in collaboration w/NACHA to develop EFT and ERA rules WEDI HIMSS Medical Banking Project

Develop new, technology-driven tools to reduce cost and provide straight-through

processing Payment estimation Propensity to pay Business Intelligence

Predictive modeling Access to patient/member database

Claims editing

Administrative Simplification Summary

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Cross-Industry Collaboration Develop a cross-industry payment “utility”

Need for a scalable solution

Leverages existing payment networks - clearinghouses, automated clearinghouse network (ACH), credit card network (Visa, MasterCard, American Express) – and information services providers - Emdeon, RelayHealth, InstaMed, NaviNet, Availity, Ingenix, etc Reduces payment and remittance processing complexity Integrates wholesale and retail revenue cycle activities with seamless connections across healthcare clearinghouses, payment networks, card networks, etc. Automates the full-cycle of the transaction (claims submission through payment receipt and reconciliation)

The Road Ahead Scenario 3

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Sources: J.P. Morgan Healthcare Solutions analysis, McKinsey Global Institute

Cross-Industry Utility

The electronic integration of data and payments will facilitate the flow of funds, and simplify the reconciliation process across all participants

Having an industry utility clear transactions will allow Hospitals to recognize revenue faster, improving revenue cycle

A utility structure specifying how payers and providers process payments will ensure interoperability between participants

A single platform streamlines compliance with standards, operating rules, and regulation

Value-Add

An industry utility can coordinate information & payments throughout the process and eliminate the need for localized solutions

The utility will: Synthesize disparate efforts at automation

into a full-cycle, straight-through standard system

Clear and settle Healthcare related transactions

Incent industry-wide adoption

Payment & Remittance Processing

Industry Solution

Provider Payer

Industry Utility

Integrated Payment

File

Integrated Claims

File

Integrated Claims

File Hospital & Physician

Offices Integrated Payment

File

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Next Steps

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Ask Questions

What are your challenges with your current accounts receivable process?

Do you manually match EOB statements with outstanding claims?

Does manual processing cause delays/ backlog in posting cash?

How long is your revenue cycle as a result of your receivables processing?

What errors have resulted from processing these receipts manually and what impact have they had

on your patients?

What delays availability of funds are you experiencing (on average) with this manual process?

How many FTEs are do you using for cash posting and does this negatively impact other areas of

your business that need more FTE resources?

Do you experience delays in retrieving archived paper?

Doesn’t the delay from exceptions posting make it difficult to recoup payments so you can apply

cash to critical areas of your business?

Are you offering your patients the ability to pay via your website? (credit card/electronic check)

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Speaker Profiles

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Aimee Trepiccione

Aimee Trepiccione has over 15 years of experience covering the healthcare industry. As a Healthcare Solutions Financial Advisor, Aimee engages with hospitals and health systems across the country to optimize vendor relationships, help generate and assess ideas with regard to structural enhancements and to target best practices in revenue cycle and payables management. Prior to joining Melio & Company in 2010, Aimee worked in the Healthcare Segment for JPMorgan Chase where she had been primarily responsible for leading efforts to support JPMorgan’s provider and payer clients in strategy development, revenue cycle improvement and working capital optimization. She has worked with a large range of health systems and academic medical centers.

Aimee received a B.S. In Business Administration from Saint Mary's University of Minnesota. Aimee is based in Chicago. She can be reached directly at 847.441.2900, and can be contacted via email at aimee@meliocompany.com.

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Tino Aurigemma Tino is responsible for understanding the business needs of his clients in the Healthcare and Higher

Education sectors located throughout the Upper Midwest. Tino is responsible for understanding his clients’ current operations and assisting them in enhancing and automating their treasury management operations.

Tino has been covering the healthcare sector since joining the bank in January 2004. Prior to joining the

bank, Tino brought over eight years of relevant, corporate treasury experience from his prior roles in at CNA Insurance. Tino’s experience at CNA includes serving as a Treasury Consultant for four years to the life operations and healthcare strategic business units where he was responsible for the banking account structure and ensuring the firm utilized the most efficient cash management technologies to enhance cash flow and process efficiencies.

Additionally, Tino worked as a project manager where he implemented CNA’s corporate purchasing card

and expense reimbursement system throughout the organization. Tino also served as the director of Corporate Governance at CNA, overseeing the firm’s Accounts Payable and Expense Reimbursement teams, as well as the Quality Assurance team which focused on process improvements.

Prior to CNA, Tino was a Relationship Manager at Fleet Bank calling on the Insurance Industry. Tino

graduated with a Bachelor’s of Science degree in Finance from Central Connecticut State University and an MBA from University of New Haven and has earned his Certified Cash Manager designation in 1995.

Tino is based in Chicago. He can be reached directly at 312-992-2274 and can be contacted via email at

costantino.aurigemma@baml.com.