Building an Automated Financial Clearance Process Niobis Queiro, MBA Corporate Vice President, Revenue Cycle Hartford HealthCare Corporation Hartford, CT

Hartford HealthCare 4 hospital system serving 63 towns in Connecticut 75,711 inpatient visits per year 2 Million outpatient and homecare visits a year 280,000 ED patients per year 60% of all behavioral health visits in the state of CT $52 million in charity care FY 2011 $14 million invested in research 15,000 Employees 2,100 Physicians $2.0B Total Revenue

Current Issues Facing Healthcare Industry Losing 7.2% on Medicare Cases, losing 14% on Medicaid* Medicare Reimbursement rates declining** Increasing Medicare & Medicaid population Increasing high deductable plans and bad debt Hospitals will Never Be Paid as Well as They are Today Rewards chasing revenue, not margin/quality Capitation payment encourages less volume Evidence Based Care Plans are needed Fee for Service versus Fee for Value Physicians, hospitals, providers and plans not aligned (incentives) Coordination lacking inside/outside walls of hospital EMR Adoption/MU requires new processes** Data is housed in silos Care Delivered in Silos Rapid increase in patients with multiple chronic diseases (CHF, COPD, Diabetes); 133M Americans have a chronic disease*** 5% patients = 55% of admissions, care at Medicare rates Health Plans shift risk to provider. Bundled care, ACO Chronic Disease Patient Volume Increasing What we know for sure is that we will never get paid more than we are today and that likely we will get paid less and more like Medicare rates across the board. This required Hartford Healthcare to identify areas to rapidly remove cost from the delivery mechanism and standardize process and accelerate revenue. Pick one of the below to speak to and then move on to the next slide: larger % of patient vol will be medicare/medicaid (due to reform, aging population, recession), and those rates are being reduced. Also with VBP where reimbursement tied to Quality Performance (30-day Readmits, Avoidable Admissions, HACs/HAIs, RAC audits), those that fall short on a broadening list of quality metrics, have more rev at risk. Fee for Service: Whether or not the nth service would be beneficial to the patient and the payer. Excessive fixed cost structure, abundance of access for competing entities for well insured population of patients Care Delivered in Silos – EMR/MU are great enablers but require revised processes to take advantage of the powerful information available for decision making on patient care. Chronic Disease Patient volume increasing – think about segmenting patients. 4 groups – healthy group, relatively healthy with scheduled elective procedures/emergencies. 3rd group is single chronic disease but healthy. 4th group is complex, multi-chronic disease. The 3rd and 4h groups require most care. Frequent flier in-patients. Chronic disease, and Complex Chronic disease wave is coming, where 7 out of 10 deaths are from chronic diseases. Heart disease, cancer and stroke account for 50% of all deaths each year. Require focused care plans that is 24/7, from an integrated care system. Monitoring the patient at home. Contracted Health Plans shift risk to providers, and pursue bundled care as a 3 yr focus on managing specific beneficiaries. ACO is program to be launched. *Source:Modern HC 6-29-09, pg 16 MEDPAC . FierceHealthFinance, 12-15-09 **ObamaCare Impact this for Primary care Physicians. 1 – Appropriate Tort Reform when practice pattern reflects standard. ***CDC 2005 Chronic Disease Prevention and Health Promotion Report.

Traditional Operating Models Will Fail Under The Complexities of Healthcare Reform Short term: Increased access to care New shared reimbursed at government rates Outcome risk Reduced operating margins On the horizon: ICD-10 Outcomes Performance Clinical integration IT interoperability ACO investments Next generation gain sharing Bundled payments Healthcare change is not new – BUT the difference this time is the rapid implementation of changes. In a very short time period, providers will be treating more patients and paid less per encounter (the only absolute of healthcare reform) If you are not working now to optimize patient revenue and aggressively control expense, your long-term viability will be challenged The demands of healthcare reform will require new investments and result in underinvestment in key operating areas (Patient Access, business office, supply expense) Providers must focus on and invest in core competencies (managing the health of a population) Importance of a centralized and organized access area to ensure Hartford’s success in an accountable care model to improve access and patient transitions between/across care providers across the HHC system. Greater Access – Reduced Reimbursement – Growing Operational Complexity

Patient Access: The Root of Much Evil Percent of data needed for billing originates at registration: 70% National average registration error rate: 46% Percent of denials that could be prevented at registration: >50% Healthcare Informatics Research Series Data http://www.hci-research.com/ME2/Default.asp Patient Access Resource Center - http://www.hcpro.com/content/70254.pdf NAHAM - http://www.nxtbook.com/nxtbooks/naham/accessmanagement_200912/#/18 Modern Healthcare - http://www.modernhealthcare.com/article/20091228/VIDEO/312289958/1157 HCPro Quarterly benchmarking report 12/10 Sources: Patient Access Resource Center: HCPro Quarterly Benchmarking Report 12/10, Healthcare Informatics Research Series Data, NAHAM, Modern Healthcare

Cash Collection Curve Cash collection probability and absolute dollar amount declines with passing time. Moral of the story: collect early and often.

Hartford HealthCare Project Goals Create an Optimal Patient Experience that Makes HHC the Provider of Choice Create and Automate a Data Rich Financial Clearance Process Produce Patient Liability Estimates for Transparency Improve POS Cash Collections Centralize Scheduling Real-time Quality Assurance to empower the end-user Enable Field Level Registration Edits Link patient Access Errors to Denials and A/R Liquidation Provide structure around E&B and Authorizations Establish a Partnership with all HHC providers and assets

Hartford HealthCare: Flashback 18 months No patient access standardization Variable financial clearance process No centralized scheduling No patient liability estimates < $1M/Yr in POS cash collections No registration quality edits No link between access & denials IT patchwork across 4 hospitals

Current state: Hartford HealthCare Patient Access 201 Automated Financial Clearance Workflow Platform Address Validation Centralized Scheduling Eligibility & Benefit Verification Prior Auth (pilot) Patient Funding w/ Via Note Patient Estimates Medical Necessity Reg Integrity ADT Feed ATB Data Reporting & Metrics HCIT Integration Post Go-Live

Point of Service Patient Liability Estimates

Linking Patient Access Errors to Denials Improved A/R Liquidation Rates Reduction in errors at Patient Access 12% 20%

Hartford HealthCare KPIs

Joys of the Open Road

Joys of the Open Road Employee Engagement Team Building Exercises HHC offers employees access to Local Community College HHC covers tuition and salary for Wednesday afternoon coursework Clear career path and education boost employee morale HHC maintains a 99% employee retention rate Team Building Exercises Rewards For Outstanding Performance

Lessons From The Road

Lessons from the Road Appraise organizational readiness Finance will likely want to run faster than departments Provide training to physicians and nursing staff Communicate early and often with hospital leadership (CEO/CFO) Appraise Financial Clearance Staff Some personality types are not suited to ask for payments Be aware of HR challenges 9 Benefits Packages 4 Compensation Models Union job descriptions Employee transfer requires new employee paperwork HHC full homogenization by 2013

John Godfrey Saxe "The Blind Men and the Elephant" by John Godfrey Saxe (1816–1887). It was six men of Hindostan To learning much inclined, Who went to see the Elephant (Though all of them were blind), That each by observation Might satisfy his mind And so these men of Hindustan Disputed loud and long, Each in his own opinion Exceeding stiff and strong, Though each was partly in the right And all were in the wrong.

Leadership Behaviors Be In The Moment Be Authentic & Humanistic Volunteer Discretionary Effort Constantly Model High Performance-Desired Behaviors that Drive Desired Results Respect & Leverage Separate Realities Be Curious vs. Judgmental Look in the Mirror First – Be Accountable Have Courageous Conversations Provide Timely, Clear & Specific Performance Expectations & Feedback Teach, Coach & Mentor - Spend at Least Half of Your Time Developing Others

Questions to Ask Yourself Everyday What more can I do right now to be a role model for those around me? What more can I do right now to achieve the outcome we desire? What more can I do right now to prevent something undesired from occurring? What expectations or feedback can I deliver right now to make a positive difference? What more can I do right now to seek or provide the clarity that I think does not exist? What more can I do right now to make this meeting more productive? When some outcome has not met my expectations, ask, “How did I contribute to that?” and “What more will I do next time to make it successful?”

A journey of a thousand miles begins with a single step. Lau-Tuz, Chinese philosopher (604 BC - 531 BC)