EVIDENCE-BASED REVENUE CYCLE IMPROVEMENT Date August 25, 2011 Speaker Name: Diane Watkins

1. EVIDENCE-BASED REVENUE CYCLE IMPROVEMENT Date August 25, 2011 Speaker Name: Diane Watkins Saint Luke’s Health System

2. Defining Evidence Based Improvement hfmap Measuring, Comparing & Improving Performance Next Steps MAP Award Touchette Regional Hospital – John Majchrzak CFO OVERVIEW 2

3. TOUCHETTE REGIONAL HOSPITAL CENTREVILLE, ILLINOIS Results • Reduced bad debt charges by 48.6% • Increased charity care by 15.5% • Decreased overall uncompensated charges by 16.6% • Increased cash collections by $2.5 million over the goal of102% adjusted net patient services revenue Cash Collections Comparable Statistics 100.2 Median 102.1 Top Quartile Performance March 2010 Source: HFMA’s 3

4. DEFINING: EVIDENCE-BASED IMPROVEMENT

5. EVIDENCE-BASED IMPROVEMENT Components • Measuring Performance • What are consensus measures of revenue cycle excellence? • Comparing Performance • How are peers performance and what are performance targets? • Improving Performance • How do high performers succeed? 5

6. EVIDENCE-BASED IMPROVEMENT Benefits • Identify and manage to trends • Validate best practices • Forecast performance • Identify opportunities for process improvement • Compare performance with like organizations • Use data to change behaviors 6

7. HFMA INITIATIVE 7

8. WHAT IS MAP? MAP is a comprehensive performance improvement strategy • Identify indicators • Track and improve performance • Recognize excellence • Share successful practices 8

9. EVIDENCE-BASED IMPROVEMENT:MEASURING PERFORMANCE

10. MAP KEYS MAP Keys are industry-developed key indicators for revenue cycle performance • Clearly defined • Measurable • Discerning • Comparable

11. MAP KEYS MAP Keys focus on key areas of revenue cycle performance • Patient access • Revenue integrity • Claims adjudication • Management 11

12. PURPOSE | VALUE | CALCULATION Example Indicator Net days in A/R Purpose Trending indicator of overall A/R performance Value Indicates revenue cycle efficiency Calculation Net A/R Net patient service revenue 12

13. EVIDENCE BASED IMPROVEMENT: COMPARING PERFORMANCE

14. COMPARING PERFORMANCE Flexible comparisons are needed for in-depth analysis • Industry trends • Performance over multiple time frames • Pre-selected peer groups • Customized peer groups Bad Debt vs. Charity Care as of % Revenue 5% 4% 3% 1% 0% Jan 09 Mar 09 May 09 Jul 09 Sep 09 Nov 09 Source: HFMA’s 14

15. Customized Peer Groups Customized peer groups are necessary for meaningful comparisons

16. TIMELY DATA Timely data is needed to set appropriate performance targets; Median Days in A/R Organizations need to “raise the bar” as industry performance improves. Median days in A/R dropped from 52 in 2004 to 46 in 2009. Data must be current to establish a relevant benchmark. 16

17. EVIDENCE BASED IMPROVEMENT: IMPROVING PERFORMANCE

18. INSIGHTS FROM AND ABOUT HIGH PERFORMERS An understanding of high performers provides benchmarks and successful practices. Example: POS Cash Collection • Research • % of high performers investing in front-end technology • % of high performers providing upfront patient estimates • Successful practices • Sample scripts • Use of dedicated trainers for patient access staff • POS Cash collection • Top-25 quartile: 35% • Top-10 decile: 46% • Source: HFMA’s 2010 MAP Award Data POS Cash Collections Comparable Statistics 27% Median 43.6% Top Quartile Performance March 2010 Source: HFMA’s

19. NEXT STEPS To get ready for reform, cope with tight economy and improve performance. • Adopt HFMA’s industry-created performance indicators • Choose metrics that will measure your performance related to key reform provisions and other industry challenges • Compare performance with peers • Review and adopt practices of high performers 19

20. MAP AWARD HFMA’s MAP Award recognizes healthcare organizations that achieve excellence in the revenue cycle and serve as models for the healthcare industry 20

21. TOUCHETTE REGIONAL HOSPITAL CENTREVILLE, ILLINOISMAP AWARD RECIPIENT Area of Excellence: Cash Collections John Majchrzak, Chief Financial Officer 21

22. Overview Who is Touchette Regional Hospital Patient eligibility and charity care Stressors causing change What we changed – System / Processes Results Gotcha’s

23. Revenue Cycle

24. Know Who You Are To Achieve High Performance Understand your key drivers HFMA MAP Keys What are limitations? Financial Technological Staffing

25. What Causes the Most Re-work In Your Organization Missed eligibility Charity care screening Incomplete information Outdated policies Inadequate technology

26. Touchette Regional Hospital“Safety Net Facility” Inpatient Services Med/Surg OB Behavioral Health ICU Outpatient Services 2 Comprehensive ER’s IOP Oncology Standard Ancillary Services Merged Touchette and Kenneth Hall Regional Hospitals 154 Licensed Beds

27. Demographic Mix

28. Charity Care Process – Pre 2007

29. Pretty Clear Where To Focus 2007 Financial Data Bad debts $9.7m 7.9% Charity $9.7m 7.9%

30. MAP Indicators 2007 Financial Data DNFB days 12.2 Net A/R days 65.9 Cash collections 98.8% (% of net revenue)

31. Catalysts For Change Known as “Free Hospital” Board asking how to control Bad Debt Relied on State supplemental payments DNFB not monitored Lack of leading reports New State law for uninsured

32. Thrive or Don’t Survive Verify eligibility at point of registration Revamp charity care process & application Financial clearance

33. Support For Improvement C-suite Board Physicians Nursing Admin

34. Revenue Cycle Focus Created charity / payment policy Service area or physician requirement Co-pay Non-refundable deposit Departmental mindset Training, training, training Changed from registrars to financial counselors

35. Revenue Cycle Focus Robust eligibility system Plan level Identification of coverage Medicaid eligibility

36. Revenue Cycle Focus Robust eligibility system (cont.) Charity care guidelines Income & propensity to pay Follow up for other type of eligibility

37. Revenue Cycle Focus Robust eligibility system (cont.) Patient Bill Estimator Interfaced into main IS system

38. Charity Care Process - Today

39. Restructure Registration ER Customer Service Outreach Pre-registration

40. Results Of Revenue Cycle Focus

41. Results Of Revenue Cycle Focus 2009 Financial Data Bad debts $4.9m 4.4% Charity $11.1m 9.9%

42. Results Of Revenue Cycle Focus 2009 Financial Data DNFB days 9.4 Net A/R days 49.2 Cash collections 106.9% (% of net revenue)

43. Do - Over's Didn’t determine all access points More education to related entity Timing of changes Monitor accuracy of registration No Social Security number Other providers Notify patient Get other providers to adopt policy

44. Summary Of Key Take-Away’s Know who you are How to handle non-emergent cases Get support for changes Automate, Automate, Automate Process for Medicaid eligibility

45. Summary Of Key Take-Away’s Drill down to plan level Have other providers to adopt policy Consider all access points Measure, Apply & Perform

46. Contact Information John W. Majchrzak, FHFMA, CPA, MBA Chief Financial Officer Touchette Regional Hospital 5900 Bond Avenue Centreville, IL 62207 Email: jmajchrzak@touchette.org Website: www.touchette.org

47. Contact Information Diane Watkins, FHFMA, MPA Vice President of Revenue Cycle Saint Luke’s Health System 4401 Wornall Road Kansas City, MO 64111 Email: dwatkins@saint-lukes.org Website: www.saintlukeshealthsystem.org