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15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
15_Mooney_RevenueCycle_Final
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15_Mooney_RevenueCycle_Final

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  • 1. Revenue Cycle Stephen M. Mooney Senior Vice President, Patient Financial Services
  • 2. The Story of Measuring, Monitoring, & Collecting • Flashback to 2005 through 2007 • 2008 & beyond • What we‟re doing to improve: – Pre-patient care experience – Collections & Follow-Up • The future of PFS 1
  • 3. Flashback to 2005 Centralization to Improve Scale Integrity & Data Integrity Transparency Business Intelligence 2
  • 4. A Year Ago… • Optimize processes 3
  • 5. A Year Ago… • Optimize processes • Consumer-focused 4
  • 6. A Year Ago… • Optimize processes • Consumer-focused • Shift in focus 5
  • 7. Our Vision is Maturing… Become a full-service, revenue cycle service delivery organization that leads the industry in seven distinct ways. 1. Maximize yield of the revenue cycle in alignment with our customers‟ missions 2. Utilize business intelligence to drive our decisions 3. Drive innovation into the healthcare industry revenue cycle 4. Be an employer of choice for the best talent in the healthcare industry 5. Provide superior service to our customers, on par with the best service delivery organizations in the world 6. Make the patient experience with the revenue cycle as transparent, integrated and easy to navigate as possible 7. Make our services a positive differentiator with physicians for the customers we serve 6
  • 8. We Can Drive Volume and Satisfaction… High Being kept Scheduling informed appointments Ease of Timeliness of billing Supportive Importance to appointments environment physicians in determining Convenience where to send for the patients Ease of patient registration Room Value for amenities money Common areas Aligned on importance Room options Not aligned on importance Low Low High Importance to patients for determining future visits 7 Source: 2007 McKinsey Patient Experience Survey; 2007 McKinsey Physician Survey Regarding Patient Experience
  • 9. Ronald Kelley Senior Director, Revenue Assurance
  • 10. Continued Improvements in Patient Access More focus on Patient Access drives our ability to… • Make it easy to do business with Tenet • Improve the patient experience • Reduce bad debt and increase cash QA & Rapid Online CPAS Pricing Registration Bill Pay Tools 9
  • 11. Center for Patient Access Services (CPAS) Implementations finishing in our new Pre-Service Center 1 Hospital schedules patient 2 CPAS processes the account Center for Patient Access Services Certification & Checks (ABN) Verification & authorization Pre-Register Pre-Service Counseling Insurance Necessity Eligibility Financial Medical Pre- Pre- Payors Payors Payors Patients Payors Payors Payors ™ 3 Patient arrives and goes through an expedited check-in at the hospital QA & Rapid Online CPAS Pricing Registration Bill Pay Tools 10
  • 12. CPAS Progress as of Q1 2008 Percent of Accounts Percent of Accounts 24-Month Change in Pre-Registered Verified POS Collections 60% 90% 25% 80% 50% 20% 70% 40% 60% 15% 50% CPAS 30% CPAS 40% CPAS Non-CPAS 10% Non-CPAS 20% 30% Non-CPAS 20% 5% 10% 10% 0% 0% 0% Source: Corporate Patient Access Scorecard, through March 2008. Comparison of “Y” CPAS vs. “N” non-CPAS hospitals. POS improvement based on Q1-08 vs. Q1-06 change in actual dollars collected at Point-of-Service; Pre-Registration and Verification 11 metrics based on actual number of accounts in Q1-08
  • 13. Quality Assurance (QA) & Pricing Tools Q1-2008 Quality Improvements • New QA tool alerts 100% Registration if inaccurate 90% data is entered 80% 70% • Reduced QA staff by >50% 60% 50% 40% • Standard tools calculate 30% patient-liability balances 20% 10% 0% Insured Name Insured Name Documentation Documentation • Written estimates given to Complete Complete Match Match Auth Auth patients Medicaid HMO Managed Care Medicaid Medicare • Automatic processing of applications for funding QA & Rapid Online CPAS Pricing Registration Bill Pay Tools 12
  • 14. Rapid Registration: Kiosk & e-Signature • 3 sites piloted beginning December 2007 • 87% reduction in paper used during registration West Boca: Desktop Park Plaza: Wall Mount • 30% initial improvement in cycle time • 3 minute average check-in time Lake Pointe: Free Standing All: Tablets QA & Rapid Online CPAS Pricing Registration Bill Pay Tools 13
  • 15. Rapid Registration: Kiosk & e-Signature What patients see when using a kiosk in the pilot 14
  • 16. Rapid Registration: Kiosk & e-Signature Patients can sign forms electronically, which are automatically fed into our imaging system Later in 2008 patients will be able to make co-payments directly at the kiosk 15
  • 17. Online Bill Pay QA & Rapid Online CPAS Pricing Registration Bill Pay Tools 16
  • 18. Jeffrey Nieman Vice President, PFS Operations
  • 19. PFS Segmentation is Gaining Momentum… We are collecting about $9 million more per quarter than our average collections in the pre- redesign period. About $15 million per quarter has been accelerated out of bad debt into collections in active A/R. While net patient billed dollars have declined 34% due to Compact and divestitures. Early Out/CFC Total Cash Collections, 2004 – 2008 Q1 $100 $500 Early Out $90 $450 Growth CFC Q1 2008 Net Patient Bills $80 $400 vs. $70 $350 Q1 2004 Collected $ $60 $300 Billed $ EO $50 $250 +49% $40 $200 $30 $150 Total $20 $100 +11% $10 $50 $0 $0 CFC Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 (-44%) 18
  • 20. MicroSegmentation™ • PFS employs an in-house PhD statistician • Unlimited number of custom models can be implemented • Models can be continuously “tuned” with most recent actual data – Easy to identify macroeconomic trends and adjust work processes to compensate – Quick response to shifts in payor behavior 19
  • 21. MicroSegmentation™ MicroSegmentation™ (44 variables) New insurance: - payor variables - Clinical/service details - Denial/dispute details New self pay: Original - Census block data Segmentation - Credit report detail - Prior visits & (8 variables) payments Original self pay: Original self pay: - Credit Score - Credit Score - Visit Variables - Visit Variables - Demographics - Demographics 20
  • 22. MicroSegmentation™ • 99% of payments come from 71% of patients New model much better at identifying the Comparison of Tenet Segmentation Models non-paying Early Out Self Pay accounts 100% 90% Near-perfect prediction for 80% Accounts With Payment 30% of paying population 70% 60% 50% 40% Microsegmentation™ 30% Original Segmentation 20% Random 10% Theoretical Max 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Total Population 21
  • 23. MicroSegmentation™ • Our pilot model was secondary bad debt self pay accounts • Significant improvement in predictive strength Comparison of Tenet Segmentation Models Secondary Bad Debt Placements 100% At the 10th percentile MicroSegmentation™ captures 90% 45.6% of good accounts vs. 25.7% under original model 80% Accounts With Payment 77% Improvement! 70% 60% 50% 40% 30% Microsegmentation™ 20% Original Segmentation 10% Random 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Total Population 22
  • 24. Next Iteration – Managed Care • MicroSegmentation™ is predicting the number of days it will take a commercial or managed care payor to respond to an initial bill • Opportunity is to refocus people resources to spend time following up on claims at the optimal point to accelerate cash and reduce aging 23
  • 25. Distribution of Predicted Follow Up Dates • Modeling shows that about 45% of accounts should be worked by day 28 and 60% by day 34 Predicted Follow Up Date 30000 25000 20000 Claim Volume 15000 10000 5000 0 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 Days from Bill Date 24
  • 26. Insurance Follow Up Model Variables • The MicroSegmentation™ Major Insurance Payor (Blue Cross, United, etc.) Payor‟s Zip Code process identified 15 data (regional payor claims processing differences) Category of Services Rendered Hospital elements as statistically Financial Class (contracted vs. non contracted payors; managed government vs. managed care) significant based on regression Expected Reimbursement from Payor Type of Insurance Product (HMO, PPO, etc.) analysis of recent actual Tenet Length of Stay in Hospital Managed Care IPA Group data (IPA may pay managed care bills rather than the payor) Hospital Department DRG Primary Illness Category • Insurance tree has 4,200+ Inpatient or Outpatient Pass Through Flag (contract requires copies of invoices for medical equipment) branches and leaves which are Emergent or Non-Emergent Services Days from Discharge for Initial Bill to Payor different possible outcomes Example MicroSegmentation™ Tree with 1,000 Leaves 25
  • 27. Validating the Model • 22,000 accounts have been modeled and have had enough time to measure accuracy of predictions • ~70% of accounts paid on or before the expected date Actual Payment Date vs. Predicted Date 75% % of Claims Paid 50% 25% 0% or Before 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Paid On + + + + + + + + + + + + + + + Paid On or Before Predicted Date Variance (in Days) between Actual Payment Date and Predicted Date 26
  • 28. What does MicroSegmentation™ Mean? • Optimized use of resources based on scientific models • Ability to focus on resolving billing issues quickly • Patients experience shorter delays in copay/deductible billing when there is an issue to be resolved with the payor 27
  • 29. Continuing the Focus on Physicians and Patients Initiatives Driving High Being kept Scheduling Satisfaction informed appointments • CPAS Ease of Timeliness of • Quality Assurance billing Supportive Importance to appointments environment physicians in • Pricing Estimates & determining Convenience where to send Point of Service for the patients Ease of Collections patient registration • Rapid Registration Room Value for • Online Bill Pay amenities money Common • Segmentation & areas MicroSegmentation™ Room options Low Aligned on importance Low High Not aligned on importance Importance to patients for determining future visits 28 Source: 2007 McKinsey Patient Experience Survey; 2007 McKinsey Physician Survey Regarding Patient Experience
  • 30. Continued Momentum & Efficiencies… Across our hospitals, A/R days Managed Care and Medicare aging are all down, releasing significant incremental cash. Managed Care Medicare A/R Days1 A/R A/R Greater than Greater than 60 180 days2 days2 Q1 Q1 Q1 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 2008 2008 2008 74 56 58 55 54 54 $63M $40M $28M $13M $15M $34M N/A $481M $357M $324M $247M $217M Overall Reduced Reduced reduction MC A/R by MCR A/R of 20 days $264M or by $29M or 27% 55% or 46% 1 Same store hospital only core acute facilities with prior year cost settlement for all years plus new facilities 2 Same store hospital only core acute facilities plus Rio and Pinecrest Rehab excluding Plaza Specialty, Coastal Carolina, Centennial, Bartlett and Norris Cancer Center for all years; 2003 Managed care data not available – no detail at that level in 2003 29
  • 31. Revenue Cycle Initiatives to Decrease A/R Days, Increase Cash Collections, & Improve Patient Satisfaction • Increase Point of Service (POS) Collection • MicroSegmentation™ • Reduction in Discharged Not Final Coded (DNFC) • Payor collaboration • Legal action when appropriate 30
  • 32. Patient Financial Services Moving forward… 31
  • 33. External Business – Market Maturity: Current Evolution of Three Outsourcing Markets RCO’s market evolution can be best understood by analyzing the evolution of two other outsourcing industries: ITO and HRO I. Proof of Concept II. Growth III. Maturation ITO Adoption HRO Rate RCO Time Few end-to-end offers Offers increasingly SLAs are standard    Offers standardized and industry practices comprehensive Consider „value‟ of offer in Differences in acceptance, View as an accepted,    sophistication and addition to potential cost strategic component of Customers expectations savings their operations Heavily fragmented Rapid consolidation of Few, large players    Providers landscape with no providers dominate market dominant providers 32
  • 34. External Business – Market Opportunity 2004 U.S. Hospital Market 7,000 6,556 6,000 1,146 Number of Hospitals Less Non-Acute Care 746 5,000 Hospitals 195 4,469 Less Military and Less Stand- VA Hospitals Alone Critical 4,000 Access Hospitals 2004 Net Patient 3,000 Revenue (NPR) of addressable hospital market 2,000 baseline ~$536B Remaining Addressable Hospital Total AHA Baseline Baseline 1,000 0 33
  • 35. External Business – Addressable Market: Revenue Cycle Spend Estimate Based on a conservative 4% cost-to-collect estimate, we can approximate the revenue cycle spend for our addressable market as ~$20Bn Estimate of Revenue Cycle Spend by Function Patient Cost-to- Access 2004 2004 Revenue Cycle Operate Billing and NPR ($B) Spend Estimate ($B) Estimate Follow-up 27% Patient 1% to 2% ~$5 to ~$11 46% Access HIM and 1% to 2% ~$5 to ~$11 Coding AR 2% to 3% ~$10 to ~$16 Management Total ~$536 4% to 7% ~$20 to ~$38 27% HIM & Coding Sources: The Monitor Group - 2006-2007 Target Market Survey, Tenet Internal Data, Modern Healthcare, Center for Medicare and Medicaid Services, AHA 34
  • 36. Closing – Roadmap • Continuing our focus on patient and physician satisfaction • Driving performance improvement • Carrying operations momentum forward through innovation and thought leadership • Provides an opportunity to leverage our services in a third party market 35

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