1. ©2013 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public. Collecting Every Dollar – Contract Management & Collecting from Patients March 14, 2014

2. 2 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Introductions ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Confidential.

3. 3 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public.  Economics of self-pay  Maximize Revenue with Contract Clarity  5 tips for increasing self-pay patient collections ► Develop custom collections strategies ► Analyze in-depth reporting and benchmarking ► Evaluate in-house and agency collections performance ► Monitor patient financial status insights ► Manage the outsource crossroads  Impacts and lessons learned  Questions and answers Today’s Discussion

4. 4 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Less Revenue, More Work ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Confidential.

5. 5 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Economics of Self-Pay Increasing Patient Responsibility

6. 6 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Economics of Self-Pay Increasing Patient Responsibility

7. 7 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Economics of Self-Pay Increasing Patient Responsibility

8. 8 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Economics of Self-Pay Increasing Patient Responsibility

9. 9 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public.  11 million people will be covered by Medicaid or CHIP 1  25-28 million people will be covered in the health insurance exchanges (high deductible health plans) 1  Hospital readmission penalties – reduced revenue  Value based purchasing program – reduced revenue  Insurance carriers taxes for ACA passed onto providers and patients Economics of Self-Pay Affordable Care Act 1 Source: CBO. “Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision.” July, 2012. $155 billion in provider payment cuts to Medicare over 10 years to pay for the legislation

10. 10 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Economics of Self-Pay Federal Deficit Spending Cuts Source: Office of Management and Budget. “More than Half of All Federal Spending Will be on Entitlement Programs in 2012.” heritage.org. 2012.

11. 11 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public.  For FY13, federal government expects to collect $2.9 trillion  FY13 estimated budget spending at $3.8 trillion  Mandatory programs such as Social Security, Medicare and Military retirement benefits are estimated to cost $2.293 trillion in FY13  Social Security is currently funded today  Medicare is underfunded as Medicare taxes do not pay for all of the benefits Economics of Self-Pay Federal Deficit Spending Cuts Source: U.S. Budget Breakdown, Understand All the Components of the Current Budget, Kimberly Amadeo, About.com, February 20, 2012

12. 12 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public.  January 2013 Deficit Deal – over next 10 years, additional $30 billion reduction in reimbursements ► $15 billion in Medicare cuts over the next ten years (physician SGR fix) 1 ► $10.5 billion overpayment recoupment over next three years 1 ► Medical disproportionate share payments to rural hospitals of $4.2 billion over the next decade 1 ► $4.9 billion reduction in end stage renal disease funding over the next decade 1  March 2013 Sequester ► 2% cuts in Medicare payments to all providers estimated at $10 billion over the next year 2 Economics of Self-Pay Federal Deficit Spending Cuts 1 Source: Kaiser Health News. Jordan Rau. “Behind the Fiscal Cliff Deal, a Prolonged Hospital Finance Fight.” January 2013. 2 Source: California Medical Association. “Sequestration FAQ, How Will the Cuts Affect California Physicians?” March 2013.

13. 13 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Economics of Self-Pay Federal Deficit Spending Cuts Obama proposes $400B in Medicare payment cuts over the next decade for his FY 2015 budget

14. 14 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Economics of self-pay Outlook for providers Increasing consumer liability Declining insurance payments Increasing cost pressure Negative financial pressures Increasing consumer out of pocket Rising deductibles Medicare costs rising and reimbursements dropping Declining margins while patient copays are increasing Aging populations / baby boomer effect Increasing chronic disease costs $200 Billion cut from federal reimbursements Estimated that 30% of revenues will come from patient out of pocket

15. 15 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Maximize Revenue with Contract Clarity ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Confidential.

16. 16 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Improve Payer Contract Performance  Improve Payer Contract performance by verifying the accuracy of payment received from third-party payers Validate Reimbursement Accuracy  Monitor payer compliance with contract terms  Value claims and audit remittance based on the latest payment rules and adjudication logic Recover Underpayments  Conduct contract-based appeals and recover lost revenue  Identify sources and patterns of errors so any recurring issues can be promptly resolved Maximize Revenue with Contract Clarity Contract Management

17. 17 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. CategoryCPT Range Claim Error Rate Nat’l Average Radiology70000-7999914.8%4.1% Path/Lab80000-8939913.9%4.5% Medicine-Immune/Vac/Inf90000-9079915.8%3.7% Medicine-Psychiatry90800-9089921.8%7.0% Medicine-Dialysis90900-9099913.1%4.5% Medicine-Gastroenterology91000-9129918.7%6.7% Medicine-Ophthalmology92000-9249921.2%3.8% Medicine-ENT92500-9270024.8%3.4% Medicine-Cardiovascular93300-9399018.4%4.2% Medicine-Pulmonary94000-9479917.6%4.6% Medicine-Allergy95000-9519916.0%2.3% Medicine-Neurologic95800-9597515.1%3.4% Medicine-CNS96000-9615513.7%4.0% Medicine-Chemo96400-9654914.2%4.2% Medicine-Dermatology96900-9699933.5%11.7% Phys Medicine, Rehab & Osteo97000-9894316.3%3.4% Special Services-Generic99000-9914218.9%5.4% E&M99201-9949919.8%1.9% CategoryCPT Range Claim Error Rate Nat’l Average Anesthesia00100-0199926.5%6.1% Integumentary10000-1999918.7%6.1% Musculoskeletal20000-2999918.8%5.7% Respiratory30000-3299921.0%4.9% Cardiovascular33000-3779919.2%6.8% Lymphatic38000-3899919.4%7.8% Mediastinum39000-3999921.5%5.5% Digestive System40000-4999916.9%4.6% Urinary50000-5399916.9%6.9% Male Genital54000-5589918.6%5.5% Intersex Surgery55900-559990.0% Female Genital56000-5899916.4%3.5% Maternity59000-5999913.0%2.1% Endocrine60000-6099918.8%3.4% Nervous61000-6499917.9%5.6% Eye65000-6889923.4%6.9% Ear69000-6998915.8%4.7% Microsurgery6999010.6%4.4% National Underpayment Rate3.0% Maximize Revenue with Contract Clarity Contract Management

18. 18 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Negotiate More Favorable Terms  Model proposed contract terms and tailor your negotiation strategies to the factors that impact reimbursement the most  Strategically evaluate overall contract performance and assess the potential introduction of new lines of business Leverage claim logic and historical claim data  Accurately value claims by taking into account all line items and associated claims, bundling and payment rules  Apply a proposed contract change to your actual historical service mix & entire claims history to get a more precise picture of the impact Analyze the financial impact of policy changes  Any potential new policy changes should be compared to your actual historical service mix, to determine the financial impact Maximize Revenue with Contract Clarity Contract Analysis

19. 19 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Best Practices for Increasing Self Pay Collections ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Confidential. Patient Data Insight Advanced Reporting & Analytics Communication Strategies

20. 20 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public.  Tip #1 – Develop custom collections strategies  Tip #2 – Analyze in-depth reporting and benchmarking  Tip #3 – Evaluate in-house and agency collections performance  Tip #4 – Monitor patient financial status insights  Tip #5 – Manage the outsource crossroads 5 Tips for Increasing Self-Pay Patient Collections

21. 21 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Confidential. Tip #1 - Develop Custom Collections Strategies Screen Patient Accounts

22. 22 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Tip #1 - Develop Custom Collections Strategies Segment Patient Accounts Prioritize receivables with a highly predictive healthcare collections score to prioritize inventory and produce optimal segmentation and treatment strategies. What is it?  10% of accounts make up 50% of self- pay revenue  50% of accounts make up 90% of self- pay revenue  Work most collectable accounts first to accelerate cash Why is it important? How does it work?  50%-85% increase in collections per account for high segments vs. simple segmentation  Up to 2-4% negotiable reduction in agency contingency fees  Significant reduction in cost to collect What is the value? Healthcare score 2134 Optimal strategy Cleansed A/R

23. 23 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Credit data model  Based on credit report data  Higher no hit rate Behavioral model  Uses account-level payment data  Takes months to truly perfect the model Demographic model  Uses demographics data  Not as precise and higher hit rates than credit data Optimal model  The optimal model uses all three above to maximize predictiveness and collections ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Confidential. Tip #1 - Develop Custom Collections Strategies Segment Patient Accounts

24. 24 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. High Profit Accounts Low Profit Accounts ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Confidential. Segment 1 (most collectable) represents 10% of the accounts and 50% of the revenue Segments 1 and 2 represents 50% of the accounts and 90% of the revenue Segment 1 (most collectable) represents 10% of the accounts and 50% of the revenue Segments 1 and 2 represents 50% of the accounts and 90% of the revenue Tip #1 - Develop Custom Collections Strategies Segment Patient Accounts

25. 25 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Segment Number of Accounts % of Accounts Initial Patient ResponsibilityTotal Payments Avg Initial Patient ResponsibilityAvg Payments Recovery Rate Segment 17,85219.63%$645,027.46$458,588$82.15$58.4071.10% Segment 24,41111.03%$7,078,861.34$2,195,787$1,604.82$497.8031.02% Segment 38,55621.39%$26,209,369.22$1,473,026.00$3,063.27$172.165.62% Segment 47,51718.79%$15,441,376.84$397,309$2,054.19$52.852.57% Segment 511,66429.16%$19,525,497.01$170,650$1,674.00$14.630.87% Grand Total40,000100.00%$68,900,131.87$4,695,360.00$1,722.50$117.386.81% Tip #1 - Develop Custom Collections Strategies Segment Patient Accounts

26. 26 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Once segmented, assign and transfer accounts to the most appropriate internal or external servicing channel. Reconcile inventory and recall accounts. What is it?  Assigns accounts to in-house or external agency that is best positioned to collect that type of account  Ability to quickly add/replace agencies  Better inventory management through real-time reconciliation Why is it important? How does it work?  Improved recovery rates due to using most effective collection channels  Elimination of reconciliation costs and errors  Reduction in IT and file management costs due to automated transfers What is the value? In-houseAgency 1Agency 2Agency 3 Tip #1 - Develop Custom Collections Strategies Route Patient Accounts

27. 27 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Sample Account Routing Workflow Optimization Tip #1 - Develop Custom Collections Strategies Route Patient Accounts

28. 28 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Tip #1 - Develop Custom Collections Strategies Account Routing Workflow Optimization Basic Charity & Medicaid Return mail Intermediate Segmentation code Call file in- house group Advanced Complete agency routing Payment & adjustment Example

29. 29 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public.  Tip #1 – Develop custom collections strategies  Tip #2 – Analyze in-depth reporting and benchmarking  Tip #3 – Evaluate in-house and agency collections performance  Tip #4 – Monitor patient financial status insights  Tip #5 – Manage the outsource crossroads 5 Tips for Increasing Self-Pay Patient Collections

30. 30 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Collect the dots by capturing the right information Connect the dots by leveraging the data Decipher the dots to transform data into actionable information Tip #2 – Analyze In-Depth Reporting & Benchmarking Manage Account Performance

31. 31 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Confidential. Tip #2 – Analyze In-Depth Reporting & Benchmarking Manage Account Performance  Detailed provider reporting ► Payer scorecard ► A/R aging report ► A/R inventory report by site ► Payment plan analysis reporting ► Return mail analysis reporting ► In-house performance & inventory reports ► Segmentation performance & inventory reports ► Executive dashboards

32. 32 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public.  Tip #1 – Develop custom collections strategies  Tip #2 – Analyze in-depth reporting and benchmarking  Tip #3 – Evaluate in-house and agency collections performance  Tip #4 – Monitor patient financial status insights  Tip #5 – Manage the outsource crossroads 5 Tips for Increasing Self-Pay Patient Collections

33. 33 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Benchmark against organizational and industry metrics Analyze effectiveness of in-house and agency collections Monitor agency performance and access performance reports AgencyMonitorBenchmark Scorecard DATA & ANALYTICS Experian’s Agency Management Platform EXPERAIN HEALTHCARE Tip #3 – Evaluate In-House and Agency Performance Manage Agency Performance

34. 34 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Confidential. Tip #3 – Evaluate In-House and Agency Performance Manage Agency Performance  Detailed agency reporting ► Agency production reports ► Dynamic agency reconciliation ► Agency inventory reports ► Collection analysis ► Performance & contact reports ► Account monitoring performance reporting ► Executive dashboards

35. 35 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public.  Tip #1 – Develop custom collections strategies  Tip #2 – Analyze in-depth reporting and benchmarking  Tip #3 – Evaluate in-house and agency collections performance  Tip #4 – Monitor patient financial status insights  Tip #5 – Manage the outsource crossroads 5 Tips for Increasing Self-Pay Patient Collections

36. 36 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Perpetually monitor unpaid accounts for changes in a patient's ability to pay and timely updates to contact information. What is it?  Immediate notification when patient’s ability to pay has changed  Important to quickly contact patient to get “wallet share”  Aged inventory usually doesn’t receive much attention Why is it important? How does it work?  150%-200% increase in collections per triggered account  2-3% of consumers have some sort of impacting change to their contact information or ability to pay per month  Increased collections in aged inventory What is the value? Updated address/ phone New job Paying off debts Tip #4 – Monitor Patient Financial Status Insights Monitor Unpaid Patient Accounts

37. 37 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. No ability to pay Diminishing ability to pay High ability to pay A Patient’s Cycle of Delinquency Patient overextended Health issues Job loss Bankruptcy Employment Paying off debts Shopping for credit New credit line Be immediately notified when a patient’s ability to pay changes Tip #4 – Monitor Patient Financial Status Insights Monitor Unpaid Patient Accounts

38. 38 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Tip #4 – Monitor Patient Financial Status Insights Monitor Unpaid Patient Accounts

39. 39 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public.  Tip #1 – Develop custom collections strategies  Tip #2 – Analyze in-depth reporting and benchmarking  Tip #3 – Evaluate in-house and agency collections performance  Tip #4 – Monitor patient financial status insights  Tip #5 – Manage the outsource crossroads 5 Tips for Increasing Self-Pay Patient Collections

40. 40 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Insourcing Model Keep all collection activities in-house. Dedicated staff members. Co-Source Model Top tiered accounts are kept in-house. Middle Tier accounts are sent to outsource vendor. OutsourcingOutsourcing Complete outsourcing of early out collection activities any where from day 1-60. Activity done in the name of the provider. The outsource crossroads

41. 41 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Determine appropriate staffing levels

42. 42 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Determine appropriate staffing levels

43. 43 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public.  Work underpayments aggressively to collect the missing payments  Determine the financial impact of contract and/or policy changes to reimbursement  Self-pay dollars will become a main component to profitability  Become an expert at collecting self-pay dollars – Expertise is available  Develop a seamless and flexible collections strategy  Screen patient accounts for bankruptcy, Medicaid eligibility and charity  Segment patient accounts to determine which accounts to target first  Route patient accounts to the most effective collections team  Analyze the performance of internal collections staff and outside vendors  Monitor unpaid patient accounts for changes in financial situations  Determine the appropriate staffing levels  Technology does not have to be a deterrent to working accounts internally  Determine where you are at today and where you want to go for next steps Impacts and Lessons Learned

44. 44 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Questions and Answers

45. 45 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. Thank You Shawn Yates Vice President, Consulting Services shawn.yates@experian.com www.experian.com/healthcare Shawn Yates Vice President, Consulting Services shawn.yates@experian.com www.experian.com/healthcare

46. 46 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 46 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public.