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 6 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 7 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 8 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 13 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