People-Centered 2020 Building a People-Centered Health System

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1 People-Centered 2020 Building a People-Centered Health System Trinity Health s Strategy & Structure Cynthia D. Fry, Ph.D. SVP & Chief Revenue Officer September Trinity Health. All Rights Reserved. 1

2 Today s objective is to share information about Trinity Health Trinity Health Demographics People-Centered 2020 Strategy Operating Model & Structure 2014 Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 2

3 Trinity Health Our diversified network extends across the full continuum of care 86* Hospitals in 21 states 123 Long-term care, assisted, independent living and affordable housing communities 48 Home Care Agencies 14 PACE Centers 61 Other Continuing Care Facilities Nearly 2.5 million home health/ hospice visits $14.5 billion in revenue Almost $900 million in community benefit ministry 92,700 full-time employees 3,600 employed physicians 22,900 affiliated physicians *Owned, managed or in JOAs 2014 Trinity 2015 Health Trinity All Health Trinity Rights Health - Livonia, Reserved. - Livonia, MI MI 3

4 Our Mission Drives Our Vision and Strategy We, Trinity Health, serve together in the spirit of the Gospel as a compassionate and transforming healing presence within our communities. Our Core Values Reverence Commitment to those who are poor Integrity Justice Stewardship Integrity 2014 Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 4

5 Our Vision What We Aspire to Become As a mission-driven innovative health organization, we will become the national leader in improving the health of our communities and each person we serve. We will be the most trusted health partner for life. We serve diverse populations, with over 30M people in our communities 2014 Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 5

6 Drivers The Marketplace Demands Fundamental Change in how we operate and what we produce TODAY TOMORROW Retail Health Market Value Networks Producer- Centered Transparency Financial Incentives People- Centered Service Volume Population Value 2014 Trinity 2015 Health. Trinity All Health Rights - Livonia, Reserved. MI 6

7 People-Centered 2020: Our Strategic Plan Includes Five Focus Areas to Achieve Our Vision People- Centered Care Engaged Colleagues Operational Excellence Leadership Nationally Effective Stewardship Physician and Clinician Collaboration 2014 Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 7

8 Think PEOPLE! Strategic Focus #1: We will transform our clinical and business models to deliver people-centered care. Strategic Focus #2: We will attract, develop and retain exceptional and committed colleagues who reflect the diversity of our communities. Strategic Focus #3: We will build an enterprise that uses our strengths as a national system to deliver operational excellence. All Strategic Focus Areas: We will collaborate with physicians and clinicians. Strategic Focus #4: We will lead in strengthening and expanding the ministry of Catholic health care in our communities and nationwide. Strategic Focus #5: We will steward resources effectively to enable success in our transformation to people-centered health care Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 8

9 Effective Stewardship We will steward resources effectively to enable success in our transformation to people-centered health care. Initiatives: 5.1 Build / implement a financial model and plan to steward resources through the transition from volume to value 5.2 Revise capital management methodology so that at least 20 30% of capital allocated supports business transformation and population health 5.3 Build an integrated revenue cycle capability that ensures effective capture of all revenue opportunities Sample Metrics: 1. Capital Spending: 20 30% of capital will be used to support population health 2. Operating expenses related to population health 3. Fee for service contract rate improvement 4. Traditional Measures: Operating cash flow (ARC Goal) Operating margin Bond rating Lead: Ben Carter 2014 Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 9

10 Our Structure: A2 Operating Model Dual Accountability and Authority Matrix 2014 Trinity 2015 Health. Trinity All Health Rights - Livonia, Reserved. MI 10

11 Pre-Merger According to BCG Lawson data combined entities have 5,071 Acute Care Rev Cycle FTEs with a $416M spend Catholic Health East 1. Primarily decentralized (except CDM) and mostly nonstandard processes with 8 CBO locations and 17 Hospitals (excludes JOA) utilizing multiple HIS. 2. Revenue cycle colleagues on RHMs payroll 3. Standardized and automated performance metrics/reporting (KPI System: denials and write-offs) & RAC workflow/ reporting 4. CFOs validated $77M cash acceleration opportunity and $145M NR improvement opportunity to move to shared service model Trinity Health 1. Primarily a shared service (Unified Revenue Organization URO) supports fully Healthquest hospitals which includes 6 Regions, 7 Locations for PFS and ~35 hospitals. Non-Genesis Sites in Illinois partially URO supports (Epic platform). 2. Most revenue cycle leaders are on the URO System Office revenue department payroll URO primarily 2014 Trinity 2015 Health. Trinity All Health Rights - Livonia, Reserved. MI 11 11

12 Post-Merger Trinity Health Clinical Leadership Structure People-Centered Health System Episodic Health Care Management for Individuals Efficient & effective episode care delivery Population Health Management Efficient & effective care coordination Community Health & Well-being Serving those who are poor, other populations, and impacting the social determinants of health Better Health Better Care Lower Costs 2014 Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 12

13 Size of Organization (Net Revenue) Huron s View: Revenue Cycle Industry Comparison Department of Veterans Affairs Kaiser HCA Trinity Health Ascension University of California Sutter Catholic Health Initiatives Baylor Scott & White Tenet Intermountain Health Care Peace Health UNC Health Care Adventist West Ochsner Houston Methodist Sisters of Charity of Leavenworth Baptist Healthcare TN Allina Local Prioritization Shared Services Adoption and Governance Spectrum of System-ness System Prioritization System Prioritization 2014 Trinity Health. All Rights Reserved. 13

14 *NEW* A2 Operating Model - Dual Authority & Accountability Matrix RHM VP s/cfos System VP Shared Accountability Defined Leadership Roles Roles and Responsibilities Tasks Regional CFO / VP Finance System VP Hire, fire and performance reviews for defined leadership roles Joint Joint Targets and Goals (Performance Management) Joint Joint Development of Budget and Management Joint Joint Strategic Direction Support Primary Vendor Management Support Primary Initiative Deployment Support Primary Resource Planning and Management Support Primary Day-to-day operations management Support Primary Prioritization of work Joint Joint Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 14

15 Ben Carter, EVP & Chief Financial Officer Revenue Excellence Cynthia D. Fry, Ph.D., SVP & Chief Revenue Officer Lisa Wille, VP Reimbursement, Revenue Integrity & Finance Reimbursement function systemwide (central operations, regional and local), CDM and pricing. Revenue Integrity, Analytics, Departmental Accounting/ Budgeting Jennifer Wallace, VP Revenue Transformation & Client Services Transforming Operations (TO) Officer for Acute/Physician Rev Cycle. Enterprise wide Client Services work plan management & deployment of transformative change (strategy) Linda Schaeffer, VP Patient Financial Services Patient Access, Patient Financial Services, Central Operations (System Standards, Vendor Management) Judy Moreau, VP Mid Revenue Cycle HIM/Coding, ICD- 10, UCO liaison on teams & CDI system-wide, RAC, Centralized Coding Support Central Operations Leaders Deployment Central Operations Leaders Central Operations Leaders Client Services RHM/Region Reimbursement Leaders Strategy RHM/Region PFS & PA Leaders RHM/Region HIM & CDI Leaders Culture & Change 2014 Trinity Health. All Rights Reserved. 15

16 Pre-Merger: Reimbursement Functions Vary CHE Group Mostly decentralized with resources at Individual RHMs. Two FTEs Centrally located to coordinated regulatory appeals TH Group Current Regional Shared Service Centers (SE Michigan, Iowa, West & Northern Michigan and West Region). Remaining. Five RHMs have individual resources (Mercy Chicago, LUHS, Fresno, South Bend and Silver Spring) Robust Central Operations Team 1 A/R Net on Aging 1 A/R Gross on Aging 2 Many RHMs Outsource Cost Reports 2 All Cost Reports In-Sourced (Except Mercy Chicago) 3 Reimbursement Initiatives Outsourced (DSH, Pricing, etc.) 3 Reimbursement Initiatives Completed by Central Operations Team 4 Various tools utilized for net revenue budgeting, valuation of A/R, etc. 4 Standard Automated Tools Developed for A/R Valuation, Net Revenue Budgeting, Net Revenue Analytics 5 No Significant Cost Settlement or Interim Payment Activity 5 Significant Cost / Interim Payment Activity in MI, IL, ID 2013 Catholic Health East / Trinity Health 2014 Trinity Health. All Rights Reserved

17 Post-Merger: Improvements in Internal Controls Revenue recognition reserves have been revised to represent RHM specific experiences and are adequate for the risks of payer denials and cost report settlements. Significant fiscal 2015 activities included: Unified East Group accounting with the implementation of standard policies for estimating allowances for Bad Debts, Charity, Operational Write-offs, RAC and Revenue Recognition Reserves. The East Group RHMs that had significant deficiencies in the FY14 audit were corrected. Implemented standard technology and best practices at all RHMs, which includes CFO Revenue Variance Reporting. Automation of the mid-month forecast application went live for the West/Midwest Group and is in test mode for the East Group. Performed site visits at all East Group RHMs to teach best practices for estimating and completing standard BST schedules. Expanded the use of the net revenue budget application in the East Group Provided training on and rolled out the standard monthly close template. Significant initiatives/synergies were accomplished to ensure that we are receiving proper reimbursement for the care provided. Incremental value totaled $260M Trinity Health. All Rights Reserved. 17

18 Post-Merger: Central Operations The R&RI Central Operations Team has a very robust action plan to improve standardization, compliance, financial reporting, net revenues and reduce costs. Reimbursement & Revenue Integrity Central Operations Priorities by Functional Area Staffing totals.59 FTEs per provider Financial Reporting Sue D /Doug Automate net revenue reporting and analytics Standardize balance sheet tests and third party accounting in accordance with GAAP Coordinate contractual allowance, allowance for charity care and AFDA (at the patient level detail) Develop net revenue budgets and related tools Automate third party logging Prepare routine trend assessments for allowance for doubtful accounts and charity care Provide assistance in external audits Support validation of revenue initiatives Support monitoring of budgeted net revenue initiatives Coordinate RAC accounting Monitor and Manage Revenue Recognition Reserves Traditional Reimbursement & Reimbursement Initiatives Mike T/ Ed C/ Mary K Coordinate CIRP and other appeals for the organization Prepare home office cost reports Analyse the financial impact associated with changes in regulations Develop UEM wide Medicare bad debt policies and tools to assist in the identification and monitoring of Medicare bad debts Development of Medicare cost report guidelines and checklists Coordinate/complete wage index assessments Monitor RHM options for geographic reclassifications Coordinate/complete DSH assessments Monitor DSH % s for 340 eligibility Identify and pursue other reimbursement initiatives Complete pricing studies for Acute Care RHMs Monitor results of price changes Assist RHMs with market strategy Assist RHMs with transparency initiatives Maintain standard CDM Educate RHM revenue liaisons and appropriate clinical teams Lead outpatient and pharmacy charge capture and coding initiatives Trinity Health - Novi, Michigan INTERNAL Pricing & Charge Description Master Kate Barton/ Loretta Compliance, charge capture & ER Karen Miska First point of contact for revenue cycle compliance issues Development of revenue management compliance policies Development and monitoring of compliance education requirements Development of compliance metrics Revenue Excellence liaison to OIAS Distribution and interpretation of regulations Advocacy support Provider based attestation reviews/assistance Assistance with ER E&M standardization Develop and monitor outpatient charge capture and coding benchmarks 2014 Trinity Health. All Rights Reserved. 18

19 Post-Merger: Regional Shared Service Centers Functions (R&RI) Leveraging the Regional Shared Service Centers will improve consistency, compliance, RHM support, staffing leverage and incremental net revenues Reimbursement & Revenue Integrity Regional Shared Service Centers Priorities and related tools by Functional Area Financial Reporting Budgeting Cost Reports and Appeals Regulatory Review and Ad Hoc Projects Prepare monthly net revenue calculation and analytics and associated journal entries ARWD and BCO Review monthly net revenue calculations with RHM CFOs before close NRA tools available Integrate Bad debt and charity care allowance estimates with Contractual allowances Coordinate Interim and year end audit preparation for reimbursement issues Automate BST in Hyperion Planned for FY14 Reconcile general ledger accounting for third party payments and settlements Prepare budgeted net revenue for RHMs NRB Tool Prepare budget to actual variance analysis Standard Monthly Close Tool Support negotiations and monitoring of third party contracts Coordinate the development of budget assumptions with Central Operations Prepare third party cost reports and filings for RHMs EZ Workpapers Automated Medicare Bad Debt Logs DSH analysis Crowe WI tool Coordinate third party audits Resolve third party audit issues Develop analysis and recommendations Direct third party appeals Participate in group appeals Represent RHMs to third party agencies such as CMS Manage financial and compliance risk associated with the reimbursement function Provide strategic and financial reimbursement analysis to RHMs to support planning, proposed regulatory changes, or other related requests from RHMs Develop and implement policies and procedures to ensure compliance with reimbursement regulations Inform CFOs of latest updates on changes in reimbursement regulations TPL & Automated reconciliation planned for FY13-FY Trinity Health. All Rights Reserved. 19

20 2014 Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 20

21 Revenue Excellence Strategic Roadmap 2014 Trinity 2014 Health. Trinity All Health Rights Livonia, Reserved. MI 21

22 Eligibility 271/70 Estimation Propensity to Pay Charity Screening Claim Scrubbing Claim Submission 837 Claim Status 276 Claim Remittance 835 EFT/ERA Processing Payment Posting Denial Follow-Up Final Posting/Acct Closed Current revenue cycles begin at Registration Front Office Access Access Automation Service & Claim Processing Back Office Denial Management Revenue Cycle As patients/consumers pay more of the healthcare expense out of pocket, their expectations are changing to demand a more service oriented, retail experience from healthcare. 90% of patients want self-service to access their information any time anywhere¹ 74% of US consumers are more likely to choose a healthcare provider that offers self-service channel flexibility² 41% of patients are willing to switch Providers to gain access to their health information ³ Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 22 14

23 Pre-Registration Registration Secure Communications Any Connected Device Eligibility 271/70 Estimation Propensity to Pay Charity Screening Claim Scrubbing Claim Submission 837 Claim Status 276 Claim Remittance 835 EFT/ERA Processing Payment Posting Denial Follow-Up Final Posting/Acct Closed Patient Centricity: Extending RC to the patient Consumer Access Front Office Access Back Office Self-Service Access Automation Service & Claim Processing Denial Management Gets the right information to the right person at the right time - thus driving efficiencies Automates and streamlines the data and dollars of the revenue cycle at its point of origin the patient/consumer Uses business rules and analytics to target pain points resulting in improved collections from 3rd parties and patients/consumers Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 23 15

24 Challenge: Determine What Existing Projects to Proceed as Planned vs. Course Corrections 3M Computer Assisted Coding/Clinical Documentation Must have and continue! Proper Statusing Patients/Write-off Reduction Initiative Must have and continue! Veracity RAC workflow & reporting - Must have and continue! Trinity Group Chartmaxx workflow implementation? Out-of-pocket estimator tools implementation/integration? (impacts Transparency Initiative).there are several more. NOTE: EVERY REVENUE CYCLE DECISION MADE LOCALLY OR IN THE SYSTEM OFFICE IN THE NEAR TERM THAT IS NOT ALIGNED WITH OUR STRATEGY AND OPERATING MODEL WILL NEED TO BE UNDONE ADDING COST, TIME AND RESOURCES!!! Guiding Principle #1: If change is contemplated, working together we can decide if there is a material short term return to move forward recognizing the work will eventually be undone. Guiding Principle #2: No vendor changes or new vendors (e.g., collection agencies) /customization Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 24 24

25 Questions? 2014 Trinity 2014 Health. Trinity All Health Rights - Livonia, Reserved. MI 25