Healthcare Opportunities for Banks


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Presentation given by John Reynolds, President FIS Healthcare Solutions at the 2011 NACHA Payments Conference.

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Healthcare Opportunities for Banks

  1. 1. New Healthcare RevenueOpportunities for BanksApril 5, 2011Karen DoyleSVP, Sr. Product Manager, First Tennessee BankJohn ReynoldsPresident, Healthcare, Government & Biller Solutions, FIS
  2. 2. Session OverviewNew Healthcare Revenue Opportunities for BanksThe recent healthcare reform bill creates new imperatives for stakeholders to takeaction to address the industrys chronic inefficiencies − creating opportunities forthose that are part of the solution. Leading financial institutions cannot afford toignore the healthcare sector as it represents significant opportunity for financialinstitutions to strengthen existing customer relationships, grow deposits and feeincome, increase household penetration, add new customers and stay ahead ofcompetition. FIS™ and First Tennessee discuss the convergence of the healthcare andfinancial services industries − and the emerging revenue opportunities for banks,including provider revenue cycle management, payment automation and CDHaccounts/services. 2
  3. 3. Introduction toFIS and First Tennessee BankExperience in Healthcare
  4. 4. 4
  5. 5. Strategic Focus in Healthcare • Healthcare Payments Solutions Division created in 2006 to create a seamless consumer healthcare experience • Leverage core financial institution solutions • Investing in Strategic AcquisitionsWe Are an − BenSoftIndustry Leader − Printing for Systems (PSI) − Medibank (MBI) − AdminiSource − CapMed • Participate in the CAQH/CORE; ABA/ABIA HSA Council • Leader in SIGIS and IIAS Initiatives 5
  6. 6. Strategic Focus in Healthcare • 60 million healthcare ID cards created in 2009: No. 2 Market Share • More than 9 million benefit payment cards: No. 1 Market ShareWe Provide Mission • Over 190 financial institutions utilizing HSA SolutionCritical Solutions • Over 550,000 HSAs processed • Over 1 million CDH accounts administered • 7 million healthcare authorizations per month • 260+ Third-party administrator clients • 90+ Health plan clients • 155+ TPAs use BenSoft full flexible benefits platform 6
  7. 7. Treasury ManagementAt First Tennessee, we offer a package of dedicated services designed to take much of the manualprocess out of the provider’s back-office and streamline their cash conversion efforts.Benefits that save time and money:• Timely, accurate collection options that accommodate electronic payments, cash and checks• Acceleration of claim payments into cash for debt • Headquartered in Memphis, Tenn. reduction or investment • $23 billion in assets• Management reporting tools for effectively • 180 financial centers in and monitoring payer performance and coding errors around Tennessee• Electronic payment solutions provide for the • 5,400 employees timeliest, most efficient and secure processing of payment transactions • Provide a full complement of TreasuryEmployee benefits: and Payment Management Services• Health Savings Accounts
  8. 8. Healthcare 101Today’s rapidly changing, healthcare landscape
  9. 9. News Update Health spending rose to aPress Release dated, Friday, Oct., 8 2010 record 17.6% of the U.S.The NCVHS recently sent a letter to Secretary Sebelius, economy in 2009 − anDepartment of Health and Human Services (HHS), advising that increase of 4% from 2008CAQH CORE meets the requirements as the authoring entity for Source: Wall Street Journal, Jan. 7, 2011operating rules for non-retail pharmacy-related eligibility andclaim status transactions outlined in Section 1104 of the ACA.
  10. 10. News Update The Republican-controlled House of Representatives passed a repeal of H.R. 3590, which is not expected to reach the president 10
  11. 11. Timeline – Administrative SimplificationSection 1104 of H.R. 3590 Transaction Set Adopted Effective Penalty *Eligibility (270/271) July 1, 2011 Jan. 1, 2013 Jan. 1, 2014Claims Status (276/277) July 1, 2011 Jan. 1, 2013 Jan. 1, 2014EFT/ERA (835) July 1, 2012 Jan. 1, 2014 Jan. 1, 2014Medicare EFT July 1, 2014 Jan. 1, 2015 NAMember Services July 1, 2014 Jan. 1, 2016 NA Notes: Health plans must document compliance with adopted transaction standards or face a penalty of $1 per covered life, per day. 11
  12. 12. Average Collection RatesHealthcare providers 100%have abysmal 90%receivables aging 80%and bad debt rate. 70% Average Collections RateIndustry bad debt is 60%widely gauged at 50%around 50%. 40% 30% 20% 10% 0% 1-30 31-60 61-90 91-180 181-270 271-365 After 1 Year Number of DAR (Days in Accounts Receivable) Source: MGMA, Celent
  13. 13. Patient Self-pay RatiosHealthcare providersare going to have to 30%increasingly collectfrom patients rather 25%than from health % Percent Responsibilityplan carriers. 20% 15% 10% 2007 2008 2009 2010 2011 2012 Source: Celent, Effective Solutions, athenahealth, CMS
  14. 14. Convergence of Healthand WealthOpportunities for financial institutions
  15. 15. Why Enter the Healthcare Market?• Add potentially thousands of new client relationships – Practice Management System (PMS) vendors – Claim adjudication vendors – Health payers and providers – All of us (consumers = members)• Stickier, household penetration – Lines of credit – Mortgage/refinancing – Equipment financing/leasing – High net worth portfolio management Believe it or not, you have much to offer. 15
  16. 16. What to Think About NextHow do your healthcare initiatives fit with your….. • Strategic goals • Growth plan • Client base • Timeline • Risk exposureIdentifying the right product(s)….. • Evaluate … – Product/service gaps • Deployment options… – Time to market – Develop “in-house” – Development cost – Outsource – Internal expertise (sales and – Referral support) • Vendor Selection… • Risk … – Strength of vendor – Reputation – Product maturity – Regulatory – Product strategy • Expected benefits… – Partnership (defined roles) – References 16
  17. 17. Health and FinancialNetwork SolutionsProduct overview, based on your client’s needs:HealthGateway and HealthCollect
  18. 18. Revenue Cycle (RCM) FlowClaim creation, submission and reconciliation HealthGateway HealthCollect HealthGateway 18
  19. 19. HealthGateway• Complete, provider dashboard encompassing Target Market: Providers all claims and payment activity – Re-association of claims and payments Value Proposition: Integrated – Integrated view of all receivables – payer, claim submission, tracking, patient, lockbox integration reconciliation and clearinghouse solution;• Provider benefits excellent complement to a weak or legacy PMS system – Elimination of manual processes and disconnected systems – Reduced eligibility/claims handling costs due to electronic processes – Provider member with an estimated cost, at time of care – Vendor consolidation 19
  20. 20. What’s New and Innovative• Recessionary economy/rising healthcare costs creating significant market shift – Employers moving to low cost health plans, creating a cost shift from payers to employees/consumers – Need for providers to supply members with an estimate of services rendered• Providers need to shift revenue collections focus from payers to patients. – Provider revenue collections currently lack patient cost transparency – 37% of provider locations expected to have RCM solutions by 2014 What’s on the horizon? ID verification mobile ID cards patient estimator payment assurance and compliancy propensity to pay 20
  21. 21. Revenue Cycle (RCM) FlowPatient statement and payment HealthGateway HealthCollect HealthGateway 21
  22. 22. HealthCollect• White label/banking branding Target Market: Providers• Comprehensive print and electronic bill presentment and payment solution Value Proposition: Integrated – Streamlined bill creation receivables management, – Electronic bill presentment (and patient payments and economical/streamlined print distribution) collections; excellent – Flexible payment options – credit, debit, ACH compliment to the patient acceptance via phone or Web accounting system• Provider benefits – Ease of payment tracking and reconciliation – Reduction in bad debt/unpaid claims – Improved cash flow and collections 22
  23. 23. What’s New and Innovative• Integration with provider PMS platform (their system or record) What’s on the horizon? Mobile payments SMS text• Receivables management ID verification – First-party collections – Third-party collections• Connectivity and “look and feel” to the partner’s Web site – Single Sign On (SSO) 23
  24. 24. What Else Is New and InnovativeRevenue Cycle (RCM) flow What’s on the horizon? EFT & ERA riding the same “rail system” Standardized EFT provider enrollment form “Straight through” claim processing Greater fraud and abuse prevention 24
  25. 25. Conclusion
  26. 26. Concluding Thoughts • Leading financial institutions cannot afford to ignore the healthcare Automating the sector Claim Payments • Largest fast-growing sector of the Process economy – and growth is likely to continue for the foreseeable future • Significant opportunities for new Activating the entrants Streamline Power of Point Patient Pays of Service • Significant unmet customer needs • Retention and new customer acquisition opportunity • Multiple product sales opportunity What will be your institution’s story in healthcare? 26
  27. 27. Questions and Answers
  28. 28. Karen DoyleThank you SVP, Sr. Product Manager, First Tennessee BankKaren DoyleSVP, Sr. Product Manager, First Tennessee Bank John ReynoldsJohn Reynolds President, Healthcare, Government & BillerPresident, Healthcare, Government & Biller Solutions, FIS Solutions, FIS