Improving Revenue Cycle Performance
Through Financial Management Solutions
•April 2013
Equifax Confidential & Proprietary Information
Copyright © 2006, Equifax Inc., Atlanta, Georgia. All rights reserved.
Market Challenges
• Slower Economy
– 1.5 million NC residents or 17% of population are
uninsured (Source – www.statehealthfacts.org)
– NC Medicaid/Medicare is 2.7 million or 30% of population
– NC Unemployment rate at 9.1%; 5th highest in US
– Collection of self-pay dollars is even more difficultE
– Escalating healthcare costs are forcing employees to
share more of the burden
• Government Regulations
– Changes in Medicare/Medicaid reimbursement policies
reduces income
– New revenue models
– Uncertainty and rapid acceleration of change
2
Equifax Confidential & Proprietary Information
Information Solutions
ID Verification, Fraud
Tools, Authentication
Financial Solutions
Value Add
Patient ID Verification
Credit Information
Full Service Data
Breach
Comprehensive
Authentication Solutions
Healthcare Payment /
Income Prediction
Data/Demographic
Enhancement
Custom Analytics
Data/Demographic
Enhancement
Provider Authentication
Employment &
Income Verification
3
Equifax Confidential & Proprietary Information
Skip Locate/Mail
Return
Optimize the Revenue Cycle
-Verify Identity
-Determine
probability to
Pay
-Pro-Active
Financial
Counseling
-Verify Identity
-Determine
Probability to
Pay
-Pro-Active
Financial
Counseling
Equifax Confidential & Proprietary Information
Patient
Portals
Authentication
/’;
120+ Days
ID Verif.
Generic
Scoring
Same as
POS +
Income
Verif.
Custom
Scoring
Custom Presumptive Charity Model
ID Verif.
Generic
Scoring
Business
Office
Or
EBO
0-90/120 Days
Patient
Access
Point
Of
Service
Batch/Offline
Connexus
Ability to implement
custom models
Real Time/Online
Data
Breach
TPC
Bad
Debt
Gen.
Scoring
Custom
Scoring
-
Employment
Locate
-Prioritize
Workflow
-Update
Identification
-Verify Income
-Presumptive
Charity
-Prioritize
Workflow
-Obtain
Employment
-Skip Locate
Healthcare Payment
And Income
Prediction
Equifax Confidential & Proprietary Information
Credit in Healthcare
• Permissible Purpose
– Typical billing procedures used in healthcare qualify as an
extension of credit under the FCRA and ECOA
• Use of credit information does not impact the patient
– Inquiries only viewable by the patient
– Not taken into account in credit scoring
• Strictly regulated to ensure patient privacy
– Tough security procedures for membership
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Equifax Confidential & Proprietary Information
Credit in Healthcare
• Using traditional credit reports or financial credit scores may not
be predictive of a patient’s probability to pay for healthcare
services
• High number of patients with little or no credit history
• Tools must be unique, effective and built specifically for
healthcare industry
• Traditional financial credit scores focus on propensity to repay
financial debt
• Payment behavior patterns for medical debts are more
complex
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Equifax Confidential & Proprietary Information
Scoring in Healthcare
• Credit scoring is an analytical methodology used to objectively
assist in evaluating patient behavior. It utilizes past behavior to
predict the performance of future behavior
• Objective in healthcare:
– Identify of patients likely or unlikely to pay their health care
debt aka Probability to Pay
– Identify patients’ Capacity to Pay
– Consistent evaluation for Charity/Medicaid candidates
– Collection/Account Management prioritization
– Likelihood to file bankruptcy
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Equifax Confidential & Proprietary Information
Score / Model Development Process
Attributes/Variables
Out of over 600, the most predictable
attributes are isolated to analyze and
develop the model
Number of public records
Utilization ratios
Credit
Number of unpaid collections
Balance of unpaid collections
Income estimation
Models are developed from
a sample data set that
represents confirmed behavior
Equifax
9
of whatConfidential,
it is meantPageto predict.
Equifax Confidential & Proprietary Information
Custom
Balance of patient account
Financial class of patient
Previous history with hospital
Economic Means Criteria
How do you know scores are predictive?
•
Validations are done to determine how well a score is
performing at segmenting accounts receivables to differentiate
account management strategies.
Observation
Patients Admitted
7/10-12/10
12-24Month
Performance Outcome Period
Equifax patient
Credit Database
Information + Historical Credit
Score Appended
10
Equifax Confidential & Proprietary Information
Performance or
“Present Time”
Self-Pay Patient Accounts
outcome - 9/11
Development
Sample
Performance
Information
(Patient paid amounts)
Validations Show the Story
Total Population: Probability to Pay Score
Risk
Rank
Low
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
High
TOTAL
Score
Range
979+
972-979
965-972
956-965
944-956
929-944
908-929
880-908
845-880
808-845
769-808
725-768
682-725
636-682
591-636
548-591
503-548
454-502
396-454
low-396
TOTAL POPULATION
Int
%
Cum
%
Int
3,105 5.0%
3,105
5% 2,033
3,105 5.0%
6,210
10% 1,975
3,106 5.0%
9,316
15% 1,953
3,105 5.0% 12,421
20% 1,951
3,106 5.0% 15,527
25% 1,861
3,105 5.0% 18,632
30% 1,881
3,106 5.0% 21,738
35% 1,699
3,105 5.0% 24,843
40% 1,487
3,106 5.0% 27,949
45% 1,362
3,105 5.0% 31,054
50% 1,165
3,106 5.0% 34,160
55% 1,000
3,105 5.0% 37,265
60%
820
3,106 5.0% 40,371
65%
636
3,105 5.0% 43,476
70%
514
3,106 5.0% 46,582
75%
393
3,105 5.0% 49,687
80%
282
3,106 5.0% 52,793
85%
260
3,105 5.0% 55,898
90%
199
3,106 5.0% 59,004
95%
147
3,105 5.0% 62,109 100%
128
62,109 100%
21,746
Goods (Payers)
%
Cum
%
9.35%
2,033
9.35%
9.08%
4,008
18.43%
8.98%
5,961
27.41%
8.97%
7,912
36.38%
8.56%
9,773
44.94%
8.65% 11,654
53.59%
7.81% 13,353
61.40%
6.84% 14,840
68.24%
6.26% 16,202
74.51%
5.36% 17,367
79.86%
4.60% 18,367
84.46%
3.77% 19,187
88.23%
2.92% 19,823
91.16%
2.36% 20,337
93.52%
1.81% 20,730
95.33%
1.30% 21,012
96.62%
1.20% 21,272
97.82%
0.92% 21,471
98.74%
0.68% 21,618
99.41%
0.59% 21,746 100.00%
100%
Direct Pmt
Int
%
Cum%
$456,524 10.20%
10.20%
$473,954 10.59%
20.79%
$494,767 11.06%
31.85%
$451,184 10.08%
41.93%
$430,920 9.63%
51.56%
$470,955 10.52%
62.08%
$350,982 7.84%
69.93%
$303,045 6.77%
76.70%
$218,357 4.88%
81.58%
$181,930 4.07%
85.64%
$160,839 3.59%
89.24%
$115,276 2.58%
91.81%
$96,526 2.16%
93.97%
$76,102 1.70%
95.67%
$52,524 1.17%
96.85%
$35,584 0.80%
97.64%
$39,346 0.88%
98.52%
$34,851 0.78%
99.30%
$19,223 0.43%
99.73%
$12,178 0.27% 100.00%
$4,475,067
100%
11
Equifax Confidential & Proprietary Information
The Scoring Story in Healthcare: Payment Risk
•Scoring shows providers how to segment
their workflow or POS activity
12
Risk
Rank
Low
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
High
Score
Range
979+
972-979
965-972
956-965
944-956
929-944
908-929
880-908
845-880
808-845
769-808
725-768
682-725
636-682
591-636
548-591
503-548
454-502
396-454
low-396
Equifax Confidential & Proprietary Information
“Goods” – top 35% of the total
population includes 61% payers
and 70% of the direct payments
“Extra Effort” – includes 25% of
the total population, 27% payers,
and 22% of the direct payments
“Minimal Effort” – bottom 40% of
the total population only has 12%
payers and only 8% of the direct
payments
Take it a Step Further:
Add Capacity to Pay
Payment Predictor
Income Predictor
High
Low
Low
Collect on Healthcare Debt
Reduce Collection Efforts
Patient A
Higher Probability to Pay and Higher Ability to Pay
Patient D
Lower Probability to Pay but Higher Ability to Pay
Prediction: Likely to pay; likely to be able to pay
Action: Make maximum collection effort if at point-ofservice and bill remaining balance
Prediction: Less likely to pay; likely to be able to pay
Action: Make minimum collection effort – if not
successful, refer patient to Financial Counseling for
possible settlement/discount or attempt to get
commitment on payment plan
Attempt to Collect/Verify
Medicaid and Charity
Verify Medicaid / Charity Care Application
Patient B
Higher Probability to Pay, but Lower Ability to Pay
Prediction: Likely to pay, but are unable to pay
Action: Refer patient to Financial Counseling for potential
discount and Medicaid/financial assistance evaluation
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Equifax Confidential & Proprietary Information
Patient C
Lower Probability to Pay and Lower Ability to Pay
Prediction: Unlikely to pay; less likely to be able to pay
Action: Refer patient to Financial Counseling – very
likely to be eligible for Medicaid / financial assistance
Goals in Revenue Cycle Process
• Discover potential financial problems at point
of service – to more effectively manage accounts early
• Predict the patient’s probability and capacity to pay – to
reduce days in accounts receivable and improve cash flow
• Prioritize workloads of accounts and balances – to get the most
from your resources and reduce collections cost
• Proactively identify potential Medicaid and
financial assistance candidates up front – to
better determine where to focus your resources
14
Equifax Confidential & Proprietary Information
ID Verification,
Fraud, and
Authentication
Equifax Confidential, Page- 15
Equifax Confidential & Proprietary Information
Goals in Revenue Cycle Process
•Identify potential fraudulent demographic
information – to decrease fraud risk and costly mail
returns
•Verify patient addresses – to decrease returned mail,
postage costs and lost dollars from returned
statements that become uncollectible
•Accounts Receivable “last check” at 120 days or
prior to Third Party Collection for updated contact
information
16
Equifax Confidential & Proprietary Information
ID Verification and Fraud Detection
•Identity Fraud Scores with or without credit
data determine the likelihood of a patient
application presenting a fraudulent identity to
reduce fraud losses, streamline processes and
increase revenue.
•Can delivers specific warning alerts about the
patient’s identity like and updated information
– Inquiry SSN associated with person reported as
deceased
– Inquiry SSN is invalid
– Inquiry SSN may be a tax ID number
Equifax Confidential, Page- 17
Equifax Confidential & Proprietary Information
These tools are not something simply for
organizations with advanced technology or
expansive staffs. Every operation can
realize improvements by working smarter
and maximizing productivity of each
employee and asset. The key is to make
sure to choose the right solution so you put
the right effort into the right account.
Questions?
Equifax Confidential, Page- 19
Equifax Confidential & Proprietary Information
Thank You
20
Equifax Confidential & Proprietary Information
Equifax Predictive Sciences
•Formed over 20 years ago (1992)
•The modeling and analytic division of Equifax
•Solutions for clients in a variety of industries
–
–
–
–
Financial Services
Telco
Insurance
Healthcare
•Over 100 custom models or analytical projects
completed annually
•3-4 generic products created every year
21
Equifax Confidential & Proprietary Information
Equifax Predictive Sciences
• Equifax Predictive Sciences
– Formed over 20 years ago (1992)
– Solutions for clients in a variety of industries
– 10+ years working with healthcare data and providers
– Generic healthcare payment prediction scoring
• Medlytix Custom Scoring
– Founded by former Equifax employees to focus further
on healthcare
– Partnered exclusively with Equifax
– 3 years working with healthcare data and providers
– Proven custom scoring installations
Equifax Confidential, Page- 22
Equifax Confidential & Proprietary Information