1. The Unique Alternative to the Big Four ® Accelerating Net Revenue Analysis and the Related Month End Close Process March 21, 2013 AAHAM

2. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 2 Audit | Tax | Advisory | Risk | Performance Topics for Today  Introduction and Assumptions  Critical Issues & Risks with Net Revenue  Revenue Cycle Analytics (RCA) Overview  Fundamentals for GPSR & A/R Valuation  Accelerated Monthly Closing Process for Net Revenue  Perspective from BayCare Health System  Questions?

3. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 3 Audit | Tax | Advisory | Risk | Performance Challenges Facing Healthcare Finance Executives  Soaring patient responsibility for A/R (growing uninsured, high deductibles/consumerism, etc.)  Increasing number of accounts that are Pending Medicaid and challenges in estimating conversion and related reserves  Difficulty in explaining the impact of changes in prior estimate affecting the current period results  How do I explain that we have more Medicaid contractual than revenue this month?

4. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 4 Audit | Tax | Advisory | Risk | Performance Challenges Facing Healthcare Finance Executives  Difficulty in quickly projecting net revenue mid-month  Material year end reserve adjustments can have unpleasant consequences  Reporting come from many data sources  Reserve estimation approach needs to be standardized and consistent yet allow for end-user judgment

5. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 5 Audit | Tax | Advisory | Risk | Performance Financial Reporting, Planning & Monitoring Provides analytics to: Explain & forecast net revenue Estimate reserves Accelerate monthly close process Identify revenue opportunities Strengthen internal controls Designed to support external audit What is Crowe® Revenue Cycle Analytics?

6. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 6 Audit | Tax | Advisory | Risk | Performance National perspective on net revenue challenges

7. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 7 Audit | Tax | Advisory | Risk | Performance Single source of truth for net revenue

8. 8 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP Crowe ® Net Revenue Reporting modules 1 - Hindsight Analysis 2 - Monthly Reserve Analysis 3 - Variance Analysis 4 - Net Revenue Budgeting 5 – Revenue Cycle Monitor 1 - Hindsight Analysis 2 - Monthly Reserve Analysis 3 – Net Revenue Analysis 4 - Net Revenue Budgeting 5 – Revenue Cycle Monitor RCA Modules

9. 9 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP GPSR and Account Receivable Valuation: Hindsight vs. Zero Balance Account Analysis

10. 10 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP  Regular hindsight analysis is fundamental in tracking accuracy of estimation approach and providing supporting data  Leverage Historical Data for Real Time Insight  Supporting data for current reserves calculation  Validation of Historical G/L estimates Hindsight or “Look-back” Analysis Hindsight Analysis Overview

11. 11 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP Example: Hindsight Analysis Take A/R as of June 30, 2005 and show the actual resolution of those balances over a period of time (e.g., through June 30, 2006)

12. 12 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP Single hindsight analysis – June 30, 2005

13. 13 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP Two years of analysis – June 30, 2004 & 2005

14. 14 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP 3 Reference Points – June 2004, June 2005, April 2006

15. 15 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP Complete Picture -Monthly Hindsight Analysis June 2005 June 2004

16. 16 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP Example Hospital – 12 Month Hindsight Inpatient Amounts as a % of Gross A/R 08/1109/1110/1111/1112/1101/1202/12 Bad debt write-offs 6.1%6.9%7.7%7.6%8.5%8.6%9.1% Charity care 6.2%8.5%9.2%9.7%10.4%12.8%13.3% Remaining balances 6.7%4.8% 4.9%5.4%5.5%5.4% Administrative adjustments -0.2%-0.6%-0.5%-0.7%-1.8%-2.2%-1.9% Denials 7.5%7.2%6.3%5.1%4.6% 4.3% Combined BD and Rem Balance 12.8%11.7%12.5% 13.9%14.0%14.4% Contractual allowances 49.3%49.2%49.1%50.9%50.2%48.5%47.0% Payments 24.1%23.8%23.3%22.6%22.8%22.3%23.0% Bad debt recovery % 1.0%1.1%1.3%1.2%1.1%1.2% Takeback % -2.6%-2.1%-2.2%-2.7%-2.8%-3.0%-3.1% Outpatient Amounts as a % of Gross A/R 08/1109/1110/1111/1112/1101/1202/12 Bad debt write-offs 8.4%8.9%8.7%9.4%11.0% 10.9% Charity care 5.6%7.0%7.9% 9.0%8.7%8.4% Remaining balances 7.5%7.9%8.1%7.2%7.5%7.1%6.8% Administrative adjustments 0.9%0.5%0.2%-0.7%-1.5%-1.6%-1.8% Denials 6.6%6.8%6.9%5.8%6.0%5.4%4.9% Combined BD and Rem Bal 15.9%16.8% 16.7%18.6%18.1%17.7% Contractual allowances 56.2%54.9%55.0%56.7%54.0%55.6%55.7% Payments 14.2%13.5%12.7%12.9%13.2%13.3%14.4% Bad debt recovery % 1.0% 2.1%2.0%1.9% Takeback % -0.2%-0.3% -0.6% -0.5%

17. 17 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP Charity Care and Bad Debt considerations Hindsight data will be best source of supporting data Determine what is the appropriate hindsight time period  12 months is industry norm  Remaining balance should be 3% or less Consider updating reserve percentages monthly and no later than quarterly Bad debt recoveries  Closed A/R should continue to generate cash collections from agencies  Must consider “takeback” in addition to recoveries on Bad Debt and Inactive Accounts  Should mirror Hindsight Ranges

18. 18 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP High Risk Payors Use hindsight data instead of ZBA data What are high risk payors?  Examples  Self Pay Primary  Medicaid Pending  Self Pay After Insurance  State or local programs Focus on historical net realizable value We typically see 5-10% realization on Self Pay Primary We typically see 25-35% realization on Self Pay After Insurance Medicaid Pending realization should be somewhere between Self Pay Primary and approved Medicaid

19. 19 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP Supporting Data for Current Reserves Calculation

20. 20 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP Validation of Historical G/L estimates

21. 21 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP Zero Balance Account (ZBA) Analysis  Performed on Accounts with Dates of Service in given time period  Generally not less than Three to Six Months, or up to 1 Year.  Total Charges = Total Charges to provide robust data sample  Parameters used to Increase and Decrease Sample  Large Dollar Account Threshold  Inpatient/Outpatient Co/Deductible Threshold  Minimum Account Threshold  Must Consider Pricing/Realization Changes Use of contract modeling system should be considered in the estimate RCA Reserve Approach: Hindsight vs. ZBA

22. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 22 Audit | Tax | Advisory | Risk | Performance Example ZBA data (based on date of service) Total ChargesPaymentsPayment Percent AllowanceContractual Percent InpatientAetna (AE)$1,905,281.93($1,146,144.92)-60.16%($691,647.33)-36.30% BLUE CROSS MANAGED CARE (B)$9,883,564.44($4,517,849.34)-45.71%($5,201,189.20)-52.62% BWC (WC)$807,472.51($315,858.96)-39.12%($491,424.95)-60.86% Cigna (CI)$716,527.25($421,521.92)-58.83%($272,600.94)-38.04% COMMERCIAL TRADITIONAL (CT)$377,850.43($167,212.54)-44.25%($104,360.24)-27.62% Healthspan (HS)$2,142,776.38($1,097,876.13)-51.24%($1,017,186.93)-47.47% Humana (HU)$5,039,775.78($2,738,267.80)-54.33%($2,201,457.99)-43.68% MEDICAID (MD)$2,439,112.91($710,587.98)-29.13%($1,681,962.83)-68.96% Medicaid HMO (PW)$5,058,116.60($1,821,354.90)-36.01%($3,234,367.73)-63.94% Medical Mutual (MM)$1,937,489.18($969,361.35)-50.03%($927,821.01)-47.89% MEDICARE (MC)$40,745,085.89($13,870,705.81)-34.04%($26,707,095.11)-65.55% MEDICARE HMO (MB)$13,908,555.78($4,763,764.79)-34.25%($8,966,768.34)-64.47% OTHER (OT)$185,888.66($59,327.88)-31.92%($126,560.78)-68.08% OTHER MANAGED CARE (OM)$858,835.36($537,961.37)-62.64%($301,916.25)-35.15% PENDING MEDICAID (PM) (PM)$960,227.64($229,379.62)-23.89%($586,388.81)-61.07% Self Pay (SP)$2,368,945.21($58,369.34)-2.46%($80,185.52)-3.38% United Healthcare (UH)$4,305,907.08($2,096,523.24)-48.69%($2,150,105.22)-49.93% InpatientTotal$93,641,413.03($35,522,067.89)-37.93%($54,743,039.18)-58.46%

23. 23 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP Allowance categorySource data Contractual allowancesZero balance account (ZBA) activity, unless accounts are contract modeled Administrative adjustments & denials ZBA activity or hindsight activity (if considerably different from ZBA) Charity CareHindsight (trending) data Bad DebtHindsight (trending) data Reserve Approach: Hindsight vs. ZBA An integrated calculation approach is best practice.  Special Attention Provided to “High Risk” Payors

24. 24 Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2009 Crowe Horwath LLP Accelerating the Month End Close Process and Net Revenue Reporting

25. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 25 Audit | Tax | Advisory | Risk | Performance Fundamentals for the Month End Close Reporting Process Identify Appropriate Month End Close Team  Should Include Finance, PFS & MC Resources  IT maybe necessary depending on source of data  Make inquiries of revenue cycle & managed care Develop and Outline Standard Process  Process should included Timeline & Checklists  Assignment of Reporting & Close Model Completion  Assign Roles & Responsibilities with back-ups  Separation of Duties: Preparer vs. Reviewer Leverage Technology to Accelerate Process  Automate, Update & Refresh Assumptions  Recast New Assumptions against Prior Period AR  Decrease time spent “building” models  Increase time spent analyzing and prescribing PeopleProcessTechnology

26. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 26 Audit | Tax | Advisory | Risk | Performance Example Month-End Timeline for 2 - 5 Day Close Opportunity area where close process could be further condensed Continuous net revenue monitoring

27. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 27 Audit | Tax | Advisory | Risk | Performance Crowe Healthcare Advisory Services RevenueManagement Revenue Cycle Managed Care Finance Budget development & monitoring Service Group Pricing & Payer Parity Net Revenue Yield Variance Managed Care Portfolio Mgmt -Rate -Volume General Ledger Net Revenue Reporting Charity Care Reporting Open A/R valuation Bad debt write-offs & recoveries Daily cash management A/R PerformanceContract InventoryRevenue Enhancement - Open A/R-Expected Pmt- Discrepancies - Bad Debt Mgmt-Payer Mapping- Underpayments - Denial Mgmt- Product parity People: Revenue Management Team

28. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 28 Audit | Tax | Advisory | Risk | Performance Trouble rolls down hill…

29. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 29 Audit | Tax | Advisory | Risk | Performance Who’s fault is it?

30. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 30 Audit | Tax | Advisory | Risk | Performance Process: Standardize Pre-Close Activities Revenue Management Team Meeting: “Pre-Close” Discussion  Determine Regular Meeting Time – 5 Days Prior to Day 1  Standardized Agenda designed to Address Potential Area of Risk  Meeting minutes should be taken and shared Most common issues discussed:  Patient volumes/Payer mix  Revenue cycle process changes; ie new initiatives  Payer realization rates/Pricing Changes Finance can do “heavy lifting” in Pre-close Phase  Update all reserve assumptions: Hindsight & ZBA Analysis  Re-Cast: Run New Assumptions against Prior Period AR to Isolate/Understand Impact  Large Balance Account Review  Net Revenue Monitoring Throughout Month

31. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 31 Audit | Tax | Advisory | Risk | Performance Fundamentals of net revenue reporting  Permanently store reserve estimates at the patient account level  Standardization of payors across multiple different entities  Calculates current month gross revenue by payor (should tie very closely to G/L)  Determines deductions on current month gross revenue, based on:  Transactions posted during the month on current month revenue  Reserves estimated on current month revenue  Separately determines changes in prior estimate based on:  Changes in reserves on open accounts  Differences in actual transaction experience versus prior reserves  Separately categorizes changes where primary insurance did/did not change

32. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 32 Audit | Tax | Advisory | Risk | Performance Technology: Finance Continually Monitors Net Revenue  Biggest barrier to accelerated close is review and explanation of net revenue variances  Continuous monitoring can surface issues and causes for variance well before close process actually begins  Daily or (at least) weekly reporting can help to facilitate the quick analysis of fluctuations in net revenue during a period of time  Actively monitor and project net revenue to avoid surprises during close  Segregation of current period activity from prior period  Determine cause of fluctuations

33. Solving the mystery…

34. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 34 Audit | Tax | Advisory | Risk | Performance Many of the material changes in prior estimates where there is a difference between estimate & actual can be explained by revenue cycle process issues  Issues with contract modeling system  Posting errors  Inconsistent write-off practices  Re-classing prior activity from bad debt to charity or administrative adjustments  Interim billed accounts  Charge removals or late charges Change in Reserve Estimates - Primary Insurance Unchanged

35. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 35 Audit | Tax | Advisory | Risk | Performance Change in Reserve Estimates - Primary Insurance Changed  Accounts frequently flip payors during the month will change reserve estimates or actual activity (particularly if posting discounts at time of billing)  Most common example is Pending Medicaid  Reserves will be a blend of contractuals, charity, and bad debt  If account flips to Medicaid, reserves will be mostly contractual (hit to contractuals, pick up in bad debt and charity)  If account flips to Self Pay, reserves will be mostly charity and bad debt (hit to charity and bad debt, pick up to contractuals)  No current period gross revenue, yet net revenue is impacted

36. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 36 Audit | Tax | Advisory | Risk | Performance Net Revenue Analysis – Summary level 11/30/2012 InpatientOutpatientTotal $%$%$% Gross Revenue$19,822,026.00 18,1102,253 $37,939,279.93 Contractuals Allowances($11,082,452.27)-55.91%($10,614,959.98)-58.61%($21,697,412.25)-57.20% Admin Adjustments($20,370.13)-0.10%($179,885.85)-0.99%($200,255.98)-0.53% Charity Care($1,861,897.02)-9.39%($558,489.80)-3.08%($2,420,386.82)-6.38% Bad Debt($297,798.82)-1.50%($419,309.75)-2.32%($717,108.57)-1.89% Current Period Net/Net Revenue $6,559,507.8133.09%$6,337,608.5034.99%$12,897,116.3134.00% Changes In Prior Estimate$602,495.573.04%($1,181,624.47)-6.52%($579,128.90)-1.53% Total Net/Net Revenue$7,162,003.3836.13%$5,155,984.0428.47%$12,317,987.4132.47% Cash Collection$7,662,320.8738.66%$6,073,045.6433.53%$13,735,366.5136.21% Bad Debt Recoveries$28,210.260.14%$55,823.720.31%$84,033.980.22% Total Cash Collected$7,690,531.1338.80%$6,128,869.3633.84%$13,819,400.4936.43% Difference$528,527.75 $972,885.32 $1,501,413.08 Cash to Net/Net Revenue107.38% 118.87% 112.19%

37. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 37 Audit | Tax | Advisory | Risk | Performance Net Revenue Analysis – Payor level Financial ClassGross Revenue Mix %Gross Revenue with Pricing Reduction Current Month Net Revenue % Change in Prior Estimate s Realization % - VA1 AGENCY (AGEN)$263.30.63%$263.316.26%$78.946.23% AHCCCS (AHCC)$3,484.58.31%$3,484.516.78%($398.4)5.35% AHCCCS SENIOR PLANS (AHCCSR) $3,865.19.21%$3,865.125.62%($75.1)23.67% STATE DEPT OF CORRECTIONS (ADOC) $0.00.00%$0.00.00%($0.2)0.00% BCBC INDEMNITY PLANS (BCBSIND) $19.20.05%$19.227.30%$0.228.11% BCBS HMO PLANS (BCBSHMO) $0.00.00%$0.00.00%$3.70.00% BCBS PPO PLANS (BCBSPPO) $1,674.83.99%$1,674.832.43%($23.0)31.05% CHAMPUS (CHAM)$221.30.53%$221.319.88%$32.634.61%

38. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 38 Audit | Tax | Advisory | Risk | Performance Net Revenue Analysis – Account level ATB Listing Account NumberPeriod DateAccount BalanceTotal ChargesAging Bucket Current Financial ClassPrimary Insurance Provider AcctXXXX1/31/2013$37,804.48 DNFBCHARITYCHARITY-MISC AcctXXXX2/28/2013$37,804.48 31-60MedicaidUNIVERSITY FAMILY CARE/Medicaid Transaction Listing Account NumberPosting DateTransaction AmountTransaction CodeTransaction TypeTransaction Sub TypeTransaction Description AcctXXXX2/2/2013($370.00)ASELFADMIN ADJUSTMENTNot SpecifiedSELF PAY ADJUSTMENT AcctXXXX2/5/2013$370.00ASELFADMIN ADJUSTMENTNot SpecifiedSELF PAY ADJUSTMENT AcctXXXX2/28/2013$0.00PUFC1PAYMENTInsuranceUFC ELECTRONIC PAYMENT ATB Listing Account NumberPeriod DateAccount BalanceContractual EstimatesAdmin Adj EstimatesCharity EstimatesBad Debt Estimates AcctXXXX1/31/2013$37,804.48$0.00 $37,804.48$0.00 AcctXXXX2/28/2013$37,804.48$30,031.88$215.49$638.90$434.60 Activity On Account Reserves On Account

39. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 39 Audit | Tax | Advisory | Risk | Performance Periodic Triangulation Three high-level indicators to validate net/net revenue reporting:  Hindsight analysis – do historical cash collections equal net A/R?  Source: Hindsight trending template  Cash to Net/Net Revenue – over a period of time, are cash collections tracking with reported net/net revenue?  Current A/R valuation – is current ratio of net A/R to gross A/R at or below historical hindsight payment rate?

40. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 40 Audit | Tax | Advisory | Risk | Performance Accounts Receivable Analysis – Payor level 181-270 271-360 360+ Total Transaction Type$%$%$%$% MEDICARE PPS (MC) Total Gross A/R$63,947 $61,564 $20,249 $8,674,043 Contractual$9,00914.09%$00.00%$00.00%$3,783,26443.62% Administration Adjustment$190.03%$180.03%$60.03%$850.00% Net A/R (After C/A & AA)$54,91885.88%$61,54599.97%$20,24399.97%$4,890,69556.38% Charity$3,1854.98%$9051.47%$1460.72%$31,2210.36% Bad Debt$4,8727.62%$2,5674.17%$18,33790.55%$183,0032.11% Net A/R (Less BD & Charity)$46,86273.28%$58,07394.33%$1,7618.70%$4,676,47053.91% SELF PAY (SELF) Total Gross A/R$1,315,169 $580,189 $1,028,019 $6,522,286 Contractual$151,11311.49%$48,7368.40%$34,1303.32%$807,41912.38% Administration Adjustment($123,100)-9.36%$4,4670.77%($9,766)-0.95%($897,937)-13.77% Net A/R (After C/A & AA)$1,287,15697.87%$526,98690.83%$1,003,65597.63%$6,612,804101.39% Charity$398,23330.28%$113,65919.59%$260,60325.35%$2,623,62040.23% Bad Debt$801,91860.97%$370,70763.89%$677,94865.95%$3,554,81354.50% Net A/R (Less BD & Charity)$87,0056.62%$42,6207.35%$65,1046.33%$434,3716.66% Self Pay After Insurance (SPAI) Total Gross A/R$809,242 $418,211 $1,125,551 $3,339,479 Contractual$136,03416.81%($1,715)-0.41%$78,6766.99%$223,0816.68% Administration Adjustment$56,0006.92%$40,0659.58%$127,52511.33%$298,8178.95% Net A/R (After C/A & AA)$617,20976.27%$379,86190.83%$919,35081.68%$2,817,58184.37% Charity$149,62918.49%$48,97311.71%$121,89710.83%$535,87116.05% Bad Debt$339,11941.91%$233,90155.93%$727,58264.64%$1,768,43352.96% Net A/R (Less BD & Charity)$128,46115.87%$96,98723.19%$69,8716.21%$513,27715.37%

41. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 41 Audit | Tax | Advisory | Risk | Performance Accounts Receivable Analysis – Summary level A/R % Increase/(Decrease) Accounts Receivable - Debit BalanceFeb-2013Jan-2013Change Feb-2013Jan-2013% Change Inpatient$66,859,353$66,472,967$386,387 0.58% Outpatient$64,138,287$63,304,534$833,754 1.32% Total Accounts Receivable$130,997,641$129,777,500$1,220,140 0.94% Contractual Allowances % of Gross Inpatient RCA Contractual$28,860,523$29,259,945($399,422) 43.17%44.02%-0.85% Inpatient Unapplied Contractual Discount$296,578$417,395($120,817) 0.44%0.63%-0.18% Outpatient RCA Contractual$36,248,619$35,573,294$675,325 56.52%56.19%0.32% Outpatient Unapplied Contractual Discount$776,120$780,619($4,499) 1.21%1.23%-0.02% Total Contractual Allowances$66,181,840$66,031,253$150,588 50.52%50.88%-0.36% Admin Adjust Allowance Inpatient($142,243)($211,161)$68,917 -0.21%-0.32%0.10% Outpatient$561,423$953,956($392,533) 0.88%1.51%-0.63% Total Admin Adjust Allowance$419,179$742,795($323,616) 0.32%0.57%-0.25% Bad Debt Inpatient$9,845,740$9,400,423$445,317 14.73%14.14%0.58% Outpatient$12,927,259$12,850,046$77,213 20.16%20.30%-0.14% Other Bad Debt Reserves$61,695$64,798($3,104) 0.05% 0.00% Total Bad Debt$22,834,694$22,315,267$519,427 17.43%17.20%0.24% Charity Inpatient$10,144,930$10,370,269($225,339) 15.17%15.60%-0.43% Outpatient$6,001,558$5,875,696$125,862 9.36%9.28%0.08% Other Charity Allowances$82,788$14,293$68,495 0.06%0.01%0.05% Total Charity$16,229,276$16,260,258($30,982) 12.39%12.53%-0.14% TOTAL RESERVE$105,664,989$105,349,573$315,417 80.66%81.18%-0.52%

42. BayCare Health System  Background  RCA Implementation  RCA Next Steps

43. About BayCare Leading community-based healthcare system in Tampa Bay, Florida  Network of 10 not-for-profit hospitals, outpatient facilities & services including imaging, lab, behavioral health and home health care  More than 200 locations throughout Tampa Bay  Founded in 1997 as integration of 3 Community Health Alliances (CHA) 1.St. Joseph’s Baptist 2.Morton Plant Mease 3.St. Anthony’s

44. RCA Implementation  April-June 2012 = 12 Week Installation for 9 hospitals  July 2012 to December 2012 = “Deep Dive” of data inside RCA tool  July 2012 to present 1.Perform parallel review of RCA and BayCare allowance methods 2. During certain months, we applied different allowance assumptions and completed more than one scenario  method is acceptable

45. RCA Implementation (cont.)  February 2013 = Concluded that Crowe RCA allowance method is reasonable and started transition with some adjustments  May 2013 = Will book to Crowe RCA allowance method in the general ledger

46. RCA Next Steps  March 2013 = Consider the implementation of Budget Module of RCA for usage of rolling 18 month net revenue Forecast  July 2013 = Begin implementation of Winter Haven Hospital

47. Contact Information Mindy Arroyo Revenue Management Specialist BayCare Health System (727) 519-1742 Mindy.Arroyo@baycare.org

48. The Unique Alternative to the Big Four ® © 2011 Crowe Horwath LLP 48 Audit | Tax | Advisory | Risk | Performance Crowe Horwath LLP Disclosure  Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2011 Crowe Horwath LLP