The Perfect Plan for Prompt and Painless Patient Payments March 2, Tim Ledbetter Healthcare IT Consultant, Granger Medical Clinic

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1 The Perfect Plan for Prompt and Painless Patient Payments March 2, 2016 Tim Ledbetter Healthcare IT Consultant, Granger Medical Clinic

2 Conflict of Interest Timothy Ledbetter Has no real or apparent conflicts of interest to report. Other: HIMSS travel and accommodations paid for Navicure, Inc.

3 Agenda Introduction Learning Objectives STEPS The State of Patient Payments GMC: Challenges, Goals and Solutions Recommendations STEPS recap Q&A

4 Introduction: Tim Ledbetter Former Director of Revenue Cycle Operations at Granger Medical Clinic, Salt Lake City 10+ years of healthcare IT management Also served as Director of Revenue Cycle Operations for Kaiser Permanente Currently a healthcare IT consultant

5 Learning Objectives Describe the shifting healthcare payment landscape where patients are bearing more financial responsibility for their healthcare services and the impact this is having on healthcare organizations. Identify methods healthcare organizations can use to initiate patient financial discussions and help patients understand their responsibility through documented estimates and payment plans. Measure patient collections performance by evaluating key revenue cycle metrics such as overall patient collections, average days in accounts receivable and days from when services are delivered to when first patient payment is received.

6 Learning Objectives Continued Evaluate information technology (IT) vendors that will facilitate collections at or near the time of service by receiving permission to securely store credit/debit card information and charging card once patient responsibility is determined or an automated payment plan has been established. Recognize why employees avoid facilitating financial responsibility conversations with patients and propose reasons why discussing payment options before services are delivered can improve collections and clinical quality as patients will be less likely to avoid care if they have affordable options.

7 STEPS: Savings Increased patient payments by $1.3 million in first 30 days

8 Granger Medical Clinic (GMC) Largest independent multi-specialty practice in Utah s Salt Lake Valley 115 providers 6 locations Process over 1,000 claims per day Services for patients and communities include primary care (internal medicine, family medicine, pediatrics, obstetrics and gynecology) and urgent care and other specialties. Partnership with Wasatch Internal Medicine and Foothill Family clinic to create an Accountable Care Organization (ACO).

9 State of Patient Payments in the U.S. Patient financial responsibility is still on the rise: $13,200 is out-of-pocket spending maximum for health plans* Nearly half of families covered by employer-sponsored plans face $7,000 in out-of-pocket expenses** Average cost of an employer-sponsored family health plan was more than $16,000 in 2014 High-deductible health plans (HDHPs) increased tenfold in past 7 years * Healthcare.gov - ** Washington Post, Yes You Are Paying a Lot More for Your Employer Health Plan JP Morgan White Paper Key Trends in Healthcare Patient Payments

10 State of Patient Payments in the U.S. Patients may be unable to pay their new higher balances: Nearly 43 million Americans have unpaid medical bills* Nearly half of survey respondents earning less than $30K say their savings are eclipsed by medical debt** More than half are worried they won t be able to pay their medical bills** *Study by Consumer Financial Protection Bureau **The Washington Post citing BankRate Survey:

11 State of Patient Payments in the U.S. Patients have a steep learning curve regarding payment responsibility: 16.4 million people are now insured via Affordable Care Act (ACA) millions are insured for the first time* Patients with employer-sponsored plans aren t accustomed to high-deductible plans Research indicates more than 60% of patients don t know their payment responsibility prior to receiving care** *HHS.gov - ** InstaMed s 5 th Annual Report on Healthcare Payment Trendsl

12 GMC Challenge: Inefficiency Overarching lack of consistent payment policies and processes across practice e.g., each physician had own payment policy Inefficient, resource-intensive patient payment processes Limited collections at point of service

13 GMC Challenge: Heavy reliance on postservice collections Post-service collections entirely paper-based Offered payment plans, but: Not automated (i.e., scheduled recurring payments). Managed by outside vendor with tight control. Often collected fraction of original balance due to high percentage of accounts sent to collections agencies.

14 Solution: New processes and policies New, standardized financial policy requires patients to sign off on plans to pay balance in full before they leave Processes automated when possible, streamline tasks and free up time for financial discussions and collections activities Provides ample patient communications to remove uncertainty about payment responsibility or how they can pay off balance Facilitates time-of-service collections via tools and technology (e.g., payment tool that securely stores credit card info; platform to establish scheduled payment plans)

15 Solution: Automate Anywhere Possible Key places to automate and why Patient estimation Scheduled payment plans Patient financial portal Storing patient s debit/credit card information for automated billing

16 Solution: Train and Coach Staff Understand staff may be uncomfortable asking for payment; hear and address their concerns Provide training, scripts, opportunities to practice Remove obstacles that keep staff from asking for payments (lack of training, inability to tell patients what they owe, time-consuming manual processes)

17 Solution: Choose few that offer more Fewer vendors = standardization, consistency, better support and fewer technical issues Evaluate vendors with an eye toward: Eliminating gaps in current performance Following best practice processes (or optimizing current processes) Reducing # of vendors

18 Solution: Choose few that offer more Negotiated with current vendors to expand current services to fill gaps Established early-out collections process Outsourced some collections duties to financial services vendor

19 Solution: Obtain Greater Visibility Established metrics to monitor to gauge performance Time from time of service to payment from insurance companies and patients Discharge Not Final Bill (DNFB) Consolidating vendors enabled easier reporting and monitoring

20 STEPS S=Satisfaction. Patients are more satisfied understanding their financial responsibility before services are delivered. T=Treatment/Clinical. Better understanding of the cost of some elective services helps patients understand how lifestyle changes could avoid a major expense. Achieved claims first-pass rate E=Electronic Information/Data: Transitioning from a paper-based to an IT-driven patient payment plan and collection process of offers organizations much more easily accessible and timely data than information that must be manually entered from paper 96% forms.

21 STEPS P=Patient Engagement/Population Management. Offering a payment estimate and fair payment plan also demonstrates the healthcare organization cares about the patient s health and financial situation. S=Savings. Eliminating paper-based processes reduces costs associated with statements, print and postage, Achieved but it also reduces claims labor expenses associated with creating patient statements and collections first-pass rate letters, as well as opening mail and depositing paper checks. of 96%

22 Results: Patient Payments Revenue Scheduled $100,000+ in payment plans within one month of implementation

23 Results: Patient Payments Revenue 29% increase in monthly payments in first 30 days

24 Results: Cleaner Claims Automation helped improve claim first pass rate to 96%

25 Recommendations Face the future! Current trends will continue Launch smart pilot programs Standardize but make exceptions when needed Reduce vendors and ask vendors to do more

26 Recommendations Automate and streamline Use technology that conforms to your processes not the other way around Monitor and measure to detect negative trends before they impact performance Stay nimble

27 Q & A Thank you! Tim Ledbetter TDLhealthcare@gmail.com