PPACA & Self-Pay: Taking a Customer- Centered Approach to Maximizing Patient Collections Rhonda Ridenour Director of Patient Financial Services Avita Health System
Speaker Rhonda Ridenour Rhonda Ridenour, Director of Patient Financial Services After graduating from The Ohio State University with a bachelor s degree in business administration, Rhonda started her career as a hospital financial counseling coordinator. She then worked as patient accounts director at two hospitals before joining a national revenue cycle consulting firm. As a client service executive, Rhonda led the staff and leadership of hospitals across the nation through evaluations and process redesign to realize their ideal, patient-focused revenue cycle model. Yearning to apply these techniques in an organization where she could see the long-term results, Rhonda returned to the provider setting as the patient financial services director at Avita Health System. She is honored to direct and lead Avita s scheduling, registration, financial counseling, customer service, hospital and professional receivable, chargemaster, self-pay, and remit posting teams. Contact information: 419-468-0511 / rridenour@avitahs.org Accountable for our actions and attitudes Value patients by providing them with exceptional quality care Integrity by having a commitment of doing what is right Teamwork by collaboratively working together Accept our leadership responsibility and maximize Avita s mission 2
Avita Health System at a Glance Organization Overview Primary Service Area: Richland and Crawford counties in northeast Ohio Hospitals: Two critical access hospitals and one PPS Hospital Outpatient Locations: Nine, serving three counties Medical Clinics: 31 locations, including 11 rural health clinics Staffed Beds: 50 CAH, 10 rehab, and 26 PPS Inpatient Admissions: 3,800 annually Employ: Over 1,600 staff and 100 physicians and mid-level providers Avita has ranked in the top 10% nationally in Customer Service for 2 years in a row 3
Avita Health System at a Glance (Cont.) Avita s new acute care hospital within a shopping mall 4
Learning Objectives This presentation will highlight: Strategic approaches to promote patient loyalty while improving self-pay collections (especially at the point of service) Increasing community benefit through expanded financial assistance and advocate programs, and reducing the amount of aged patient receivables By implementing several initiatives related to self-pay balances such as simplified statements, an online portal, and a vendor partnership to offer a revolving payment plan and courtesy reminder calls Avita improved its A/R performance and enhanced patient access to financial assistance and related options. Takeaways Recognize opportunities to redesign billing statement formats and implement targeted patient communications prior to and following the patient s clinical service to reduce patient receivables while increasing patient loyalty Evaluate how dedicated staff such as patient billing advocates, financial counselors, and customer service representatives can be leveraged to improve patient financial literacy Understand how A/R management can be facilitated by offering alternative avenues for resolving self-pay balances, such as revolving payment plans and financial portals 5
Background The Patient Financial Services Structure CFO Medical Records Information Systems Patient Financial Services Director Hospital and Physician Finance Materials Management Enrollment and Denial Coordinator PFS Data Analyst Registration Managers for Each Hospital Campus Hospital Receivable Manager Professional Receivable Manager Patient Service and Posting Manager Patient Receivable Manager Leads and Mentors Coordinator Coordinator Claim Posting Team Lead Customer Service Team Lead PFS Trainer Financial Counselors Centralized Scheduling Registrars Reception/ Switchboard Medicare Billing Reps Hospital Account Resolution Reps Certified Coding and Billing Reps Physician Account Resolution Reps Posting Reps Customer Service Reps Chargemaster and Credit Analyst Information Specialist Cashiers Patient Billing Advocates and CACs 6
Background Patient Receivable Statistics Numbers are year-to-date for fiscal year 2017 as of February: 40.6% Hospital Self-Pay Over 90 37.5% Physician Self-Pay Over 90 2.4% Bad Debt Gross Revenue 1.9% Charity Gross Revenue 7
Background ACA and Medicaid Expansion Ohio expanded Medicaid under the Affordable Care Act, and as of October 2016, almost three million individuals had enrolled in Medicaid and CHIP Additionally, more than 900,000 individuals had health coverage at the beginning of 2017 due to provisions of the ACA This has resulted in a noticeable shift of Avita s revenue mix from self-pay to Medicaid Revenue Type at Avita as a % of Total 12.9% 16.0% 18.5% 19.3% 20.2% 19.9% 21.0% 5.0% 4.6% 3.5% 3.0% 2.8% 3.0% 3.1% 12/2013 3/2014 9/2014 3/2015 9/2015 3/2016 9/2016 8 Self-Pay Medicaid
Agenda Providing Financial Education Tracking and Collecting Expected Point-of-Service (POS) Payments Effectively Updating Patient Statements Increasing Collections via Flexible Payment Options Accelerating Self-Pay Cash Through Targeted Phone Calls Maintaining Peak Customer Service Performance 9
Providing Financial Education One major initiative to improve patient financial literacy and loyalty while boosting self-pay collections included developing financial education materials surrounding pre-service and POS collections. Pre-Service and POS Discussions Written Patient Cost Estimates Staff and Provider Education and Scripting Internal Measurements ü ü ü Internal Measurements Collections against expected amount If expected, reasons why estimated patient responsibility was not collected Amount of missed collections opportunity 10
Providing Financial Education (Cont.) Patient responsibility estimates are provided and conversations initiated during pre-registration calls and at check-in for scheduled hospital patients. Unscheduled hospital patients and physician clinic patients also receive information. Multiple data sources are consulted to develop the estimates. Estimated charges (based on chargemaster and historical claims data) Allowed charges (calculated using payer-specific reimbursement information) Estimated insurance payment amount (based on patient-specific benefit verification) Patient responsibility amount with breakdown of deductible, co-insurance, and co-pay amounts Estimate 11
Providing Financial Education (Cont.) Insurance on file Estimated allowed charges Planned service or procedure Benefit information details, including deductible, out-ofpocket max, coinsurance, and copay amounts Estimated total patient responsibility amount Prompt payment incentive 12 Disclaimer
Tracking and Collecting Expected POS Payments When Avita began the push for POS collections improvement, frontline staff were hesitant to initiate collections conversations. To provide staff insight into the effects of their efforts, leadership began tracking POS collections success and comparing collected amounts to what was owed at the time of service by patients who presented for care. The ratio of these amounts helps staff monitor whether they are making progress toward more regular and standardized POS collections. Staff buy-in also was achieved by training team members on the patient benefits of POS collections (such as being able to store credit card information so future co-pays could be resolved easily) and providing them with scripting to respond to common patient questions or concerns. 13
Tracking and Collecting Expected POS Payments (Cont.) The sample scripting provided to staff also included a quick description of the overall approach they should use when responding to certain patient questions or concerns: 14 Patient Comment I ve never had to pay at the time of service before. I thought my insurance paid for everything. I didn t bring my checkbook. I can t pay at all. I can t/won t pay in full. (Not eligible for financial assistance) Summary of Approach Point out the patient benefits of paying up front and provide several options. Explain that we have verified the amount they owe is not covered by their insurance. Provide other options or ideas for resolving the balance. Find out why, then request the patient complete and return an assistance application before leaving the facility. Find out why, then get immediate partial payment also explain the details of/secure commitment to the payment plan, initiate application, or refer to financial counselor to assist with application. Staff Response I apologize that you were surprised by our request. Many of our patients like taking care of their balance up front so they don t have to worry about it later on. Would you like to pay by check or credit card? If you permit us, we can also keep your information on file to make the process faster for you the next time. You do have good insurance coverage, but very few policies pay 100% anymore. We have verified your specific benefits with your insurance company, and I assure you that this is the amount that is your responsibility to pay. How would you like to pay for this today? We also accept cash or credit cards. Can someone from your family stop by the cashier s office prior to your discharge to pay the portion due? When would be a good time for me to call you to take your electronic check or credit card information over the phone? Avita is committed to helping our patients who are having difficulty paying their patient responsibility amount. May I review our financial assistance programs with you and provide you with an application? We also accept all major credit cards for your convenience. If you pay half today, we ll send a bill for the remaining balance due. May I assist you in applying for a payment plan through our business partner, HELP Financial?
Tracking and Collecting Expected POS Payments (Cont.) Staff document the expected co-pay or expected deposit amount, and if the full expected amount is not collected, they indicate the reason. Most Common Reason List Credit card or e-check payment scheduled Collected at pre-registration Discount employee, self-pay, prompt payment, cosmetic Financial assistance Multiple insurances One-time courtesy visit to walk-in clinic Physician or office manager override Post- or pre-op visit Preferred status; patient requested to be billed Avita s goal is to collect 90% of each day s expected co-pays and 30% of expected co-insurance or other amounts by the date of service. Provided ED patient with co-pay statement Refuses; no future appointment to be scheduled Screening or wellness exam Other comment required 15
Effectively Updating Patient Statements Avita recognized the need to revise its patient billing statement after realizing about 25% of calls to its customer service representatives were the result of billing confusion. Avita s Previous Patient Statement The main issues identified were: The previous statement did not list the treatment location, service, charges, insurance payments, contractual adjustments, or available financial assistance information. The difference between Patient Responsibility and Discounted Total was not clear to many patients. 16
Effectively Updating Patient Statements (Cont.) The financial counseling team gathered example statements from local healthcare providers and other industries (e.g., credit card statements) to identify best practices they would use to help design Avita s new patient statements. The list of desired characteristics was shared with possible partners during a vendor search. The selected partner was able to include those desired characteristics and other benefits, such as excellent customer service, the ability to verify patient addresses, and more. Identified Best Practices Ability to customize design Include prompt-pay discount Use of color for emphasis Patientfriendly language Uniform remittance stubs 17
Effectively Updating Patient Statements (Cont.) Once leadership chose a vendor, they considered about 10 statement prototypes before selecting a design to share with a patient focus group. The focus group provided valuable feedback, such as the preference for separate hospital and physician statements, and helped evaluate internal processes and policies, such as prompt-pay discounts and more. Avita s New Self-Pay Statement Date of service, credit card payment information, total balance due, and prompt-pay discount amount displayed at the very top Link to Avita s financial portal and walk-in cashier s hours of operation Charge summary at the revenue code level Previous payment and adjustment summary, including prompt-pay discounted patient responsibility amount Total balance due 18
Increasing Collections via Flexible Payment Options Avita also launched a patient financial portal to offer online bill-pay, allow self-scheduling requests, accept payment plan applications, and more. The portal vendor was separate from the statement vendor, and the selection process included an emphasis on the need for streamlined payment posting using 835 files, the ability to display statements online, reduce credit card fees, and provide a separate site to accept contributions to the Avita Health Foundation. 19
Increasing Collections via Flexible Payment Options (Cont.) The combination of the redesigned statement and the financial portal prompted a dramatic increase in online patient payments. Patient Payments Received via Avita s Financial Portal Monthly Data or Average per Month 817 631 488 227 244 216 295 297 Nov-12 Dec-12 Jan-Feb 13 Mar-13 Apr-Dec 13 2014 2015 2016 20 New patient statement and portal launched
Increasing Collections via Flexible Payment Options (Cont.) Leadership leveraged an additional vendor partnership to be able to offer patients the HELP Program, a revolving payment plan. The vendor also helps patients complete Avita internal financial assistance applications and access other options as appropriate. When launching the HELP Program, Avita sold the vendor existing payment plans, forgiving balances that would have taken longer than three years to collect (the maximum timeframe offered by the vendor). Avita also provides the vendor a 15% discount on balances it acquires, the same as the organization s prompt-pay discount for patients. HELP Program 12-month, interest-free payment plan Guaranteed line of credit Three-year maximum term, with 8% interest accruing after 12 months Families can combine balances into one plan Penalty-free early payment Flexible monthly payments 21
Increasing Collections via Flexible Payment Options (Cont.) Patient-facing documents explaining the HELP Program and its terms make it easy for patients to evaluate their repayment options: 22
Increasing Collections via Flexible Payment Options (Cont.) The HELP Program is referred to as a revolving payment plan because the vendor assumes full responsibility for the balance after the patient makes their first monthly payment. The vendor repays Avita in full and then continues to collect from the patient to reimburse itself. Vendor Recourse Rates on HELP Program Accounts If the patient defaults on the loan (defined as 90 days without payment), 12.0% the account is returned to Avita. Avita reimburses the vendor for the remaining balance on the account and then writes the amount off to bad debt. 5.8% Average on accounts from four years of program Recourse on aged, purchased accounts Overall recourse on new accounts 23
Increasing Collections via Flexible Payment Options (Cont.) 40% of loan amount 40% of amount paid to Avita 60% of amount paid to Avita 24
Evaluating Guarantors Ability to Pay Avita offers additional financial assistance options based on a patient s circumstances and need: Presumptive Charity Eligible patients are identified by external data analysis. Guarantors receive at least three written communications about financial assistance and payment plan options. Accounts scored in the eighth, ninth, or tenth decile are adjusted if the account ages to 75 days but has no payment. Account Scoring Accounts that age to 55 days are scored by a national credit bureau and ranked in deciles. Medical Hardship Patients are eligible if they have Avita self-pay medical costs exceeding $10,000 (or 20% of the family s income) in a 12-month period. All standard financial assistance is applied first. The maximum percentage of hardship awarded is 90%. Avita staff consider this data when approaching collections and financial assistance conversations with patients. 25
Accelerating Self-Pay Cash Through Targeted Phone Calls Avita has expanded its pilot of targeted self-pay collections phone calls, performed with the assistance of a business partner, as another strategy to increase reimbursement. Initial Program Three phone attempts between 55 and 60 days to patients scored in deciles one through five with a balance greater than $500. If personal contact is made, reminder provided and payment collected over the phone, if possible. If no answer on the third attempt, a message was left directing the patient to call Avita s customer service line. Expanded Program Two phone attempts between 55 and 60 days to patients scored in deciles one through seven with a balance greater than $50. Two additional phone attempts prior to referral to collection agency. If personal contact is made, reminder provided and payment collected over the phone, if possible. Business partner s phone number left in voicemails. 26
Maintaining Peak Customer Service Performance Another major area of emphasis was to re-emphasize customer service, which leadership accomplished, in part, by creating the role of patient billing advocate. Three staff members (two financial counselors and one hospital insurance biller) were selected to fill the roles based on their history of providing community service. Two also serve as certified application counselors for the Ohio insurance exchange, though that is not a formal duty of a patient billing advocate. ü ü Patient Billing Advocate Duties Improve patient financial literacy (e.g., understanding paperwork they receive from insurers and healthcare providers) Assist Avita patients and others in the community with healthcare financial assistance and access to local, state, and federal funding for basic living expenses 27
Maintaining Peak Customer Service Performance (Cont.) Internal customer service also was improved by responding to frequent patient complaints about being sent to voicemail when trying to contact an Avita staff member. The organization also had separate phone lines for hospital or physician billing, creating additional hurdles for resolving patient needs. Customer Service Improvements Created a single phone line for customer service and billing Accept hospital and physician payments in the same call Created a threelevel call tree to give patients additional options before leaving a voicemail 28
Results Patient loyalty has been strengthened by providing enhanced statements, more convenient and flexible payment options, and a renewed emphasis on customer service. Patients receive personalized, focused service from Avita staff and its partners. The patient billing advocate and certified application counselor programs have expanded access to financial assistance. Avita now is receiving self-pay reimbursement in a more timely manner, which has helped significantly reduce self-pay account aging. 29
Results (Cont.) Self-pay receivables over 90 days as a percentage of total A/R have also decreased by: 15% 9% 8% 6% 5.3% 4.9% November 2012 February 2013 October 2014 April 2015 September 2016 December 2016 (start of initiative) (three months of loan program) STATEMENT REDESIGN (six months of targeted phone call program) (12 months of targeted phone call program) (three months of expanded charity program) (three months of expanded phone calls) EXPANDED MEDICAID/MARKETPLACE/CERTIFIED APPLICATION COUNSELORS ESTIMATES/POS FINANCIAL EDUCATION 30
Questions? Rhonda Ridenour Director of Patient Financial Services rridenour@avitahs.org (419) 468-0511 31