1. FLEX CAH Financial Improvement Collaborative 12-11-2012 Sponsored by Florida ORH & Hometown Health

2. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: Feeling Squeezed?

3. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: The SMART objectives of the “Florida CAH Financial Improvement Collaborative” are action oriented, and data driven with measurable outcomes to ensure marked improvements for the thirteen participating CAH’s: 1) Conduct financial and operational assessment with SWOT (Strengths, Weaknesses Opportunities, and Threats) analyses in each hospital resulting in Strategic Financial Improvement Plan; 2) License and employ the iVantage Hospital Strength Index™ Scorecard Data and Reports; 3) Identify Financial Improvement Opportunity through Cost Report Analysis; 4) Complete Comprehensive Revenue Cycle Analysis; 5) Provide relevant and up to date educational resources to be delivered through live workshops, webinars, and online education at www.hthu.net 6) Improvement in 6 financial indicators;

4. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: 1)Conduct financial and operational assessment with SWOT (Strengths, Weaknesses Opportunities, and Threats) analyses in each hospital resulting in Strategic Financial Improvement Plan; STATUS: Dec-Feb timeframe A review of the hospitals recent performance (historical data) SWOT analysis (discussion and data generated) Assessment of competitive position (iVantage report) Assessment of competitive strength (iVantage report) Identification of strategic problems/issues confronting the hospital (discussion) ✔ HTH will provide a framework for this analysis to assist in its completion.

5. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: 1) Conduct financial and operational assessment with SWOT (Strengths, Weaknesses Opportunities, and Threats) analyses in each hospital resulting in Strategic Financial Improvement Plan; STATUS: Dec-Feb timeframe 2) License and employ the iVantage Hospital Strength Index™ Scorecard Data and Reports;STATUS: ✔ Accomplished

6. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: 2) License and employ the iVantage Hospital Strength Index™ Scorecard Data and Reports Webinar hosted by iVantage. Topic: Using the hospital strength index to its full potential. Webinar date: January 8 th, 2013 at 9 CST/ 10 EST.

7. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: 1) Conduct financial and operational assessment with SWOT (Strengths, Weaknesses Opportunities, and Threats) analyses in each hospital resulting in Strategic Financial Improvement Plan; STATUS: Dec-Feb timeframe 2) License and employ the iVantage Hospital Strength Index™ Scorecard Data and Reports;STATUS: ✔ Accomplished 3) Identify Financial Improvement Opportunity through Cost Report Analysis;

8. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: 3) Identify Financial Improvement Opportunity through Cost Report Analysis; STATUS: Under contract negotiations with Keith Williams $1000 Cost Report Estimate Tool – by Keith Williams

9. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: 1) Conduct financial and operational assessment with SWOT (Strengths, Weaknesses Opportunities, and Threats) analyses in each hospital resulting in Strategic Financial Improvement Plan; STATUS: Dec-Feb timeframe 2) License and employ the iVantage Hospital Strength Index™ Scorecard Data and Reports;STATUS: ✔ Accomplished 3) Identify Financial Improvement Opportunity through Cost Report Analysis; STATUS: Under contract negotiations with Keith Williams 4) Complete Comprehensive Revenue Cycle Analysis;

10. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: 4) Complete Comprehensive Revenue Cycle Analysis;

11. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: 1) Conduct financial and operational assessment with SWOT (Strengths, Weaknesses Opportunities, and Threats) analyses in each hospital resulting in Strategic Financial Improvement Plan; STATUS: Dec-Feb timeframe 2) License and employ the iVantage Hospital Strength Index™ Scorecard Data and Reports;STATUS: ✔ Accomplished 3) Identify Financial Improvement Opportunity through Cost Report Analysis; STATUS: Under contract negotiations with Keith Williams 4) Complete Comprehensive Revenue Cycle Analysis; 5) Provide relevant and up to date educational resources to be delivered through live workshops, webinars, and online education at www.hthu.net

12. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: 5) Provide relevant and up to date educational resources to be delivered through live workshops, webinars, and online education at www.hthu.net STATUS: On-going Workshops: Jan 17 th meeting in Tallahassee, Thursday 1:30 – 3:00 PM is all FLEX Webinars: Dec 11, 2012 January 8, 2013 @ 10 CST/9 EST (hosted by iVantage) February 12, 2013 @ 10 CST/9 EST Online education: www.HTHU.netwww.HTHU.net HTH FL Wiki page: Where you can find all things related to FL FLEX Initiative. http://hometownhealthflorida.wikispaces.com/home

13. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: 1) Conduct financial and operational assessment with SWOT (Strengths, Weaknesses Opportunities, and Threats) analyses in each hospital resulting in Strategic Financial Improvement Plan; STATUS: Dec-Feb timeframe 2) License and employ the iVantage Hospital Strength Index™ Scorecard Data and Reports;STATUS: ✔ Accomplished 3) Identify Financial Improvement Opportunity through Cost Report Analysis; STATUS: Under contract negotiations with Keith Williams 4) Complete Comprehensive Revenue Cycle Analysis; 5) Provide relevant and up to date educational resources to be delivered through live workshops, webinars, and online education at www.hthu.net STATUS: On-going 6) Improvement in 6 financial indicators (4 pre-selected and 2 hospital selected)

14. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: 6) Improvement in 6 financial indicators (4 pre-selected and 2 hospital selected) -Days cash on hand -Patient deductions -Medicare outpatient cost-to-charge -Salaries to net-pt.-revenue -Hospital choice #1 -Hospital choice #2 Action Item: update the 4 financial indicators and choose 2 additional indicators by end of December 2012.

15. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: Fiscal Year Cost Report DataiVantage Hospital ID Days Cash on Hand Patient Deductions Medicare Outpatient Cost to Charge Ratio Salaries to Net Patient Revenue Net Days Revenue in Accounts Receivable 2010113412.167.90%0.2644.90%96.6 201011327.847.80%0.3956.50%49 2010101911162.70%0.3741.50%86.3 20101141-10.460.30%0.2435.20%152 2010113517.567.60%0.3352.50%62.1 2010113823467.50%0.2564.70%47.3 2010113312.844.30%0.3650.30%22.8 20101140065.30%0.2759.40%57.6 20101142 63%0.2726%52 2010113720.957.80%0.2436.20%50.3 20101131 70.40%0.2955.40%43.1 20101139 67.40%0.2652.70%40.3 Hometown Health FL CAH Median12.8064.15%0.2751.40%51.15 US CAH Median65.9436.02%0.4844.66%53.45

16. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: External & internal factors that determine if you make payroll Referrals Outpatient volume Inpatient volume Surgery volume Demographics Keep this in mind : Some improvements maybe one time catches (DNFB) and some are on-going improvements (POS cash collections) Following P&P Efficiencies Proper documentation Contract issues

17. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: Salaries to net-pt.-revenue [worksheet A, col. 1, line 101/worksheet G-3, line 3] Range: 19.9% to 59% Benchmark: FL median CAH % = 52.51% (increasing trend since 2005) U.S. median CAH = 44.78% (constant since 2007) A value greater than 50% indicates that the majority of net revenue is for salaries and may indicate a labor intensive organization and/or one that employs the medical staff. A low denominator, net patient revenue, can give the appearance of a salary issue. A high numerator, salaries, can give the appearance of issues in the business office or that all is well. So is the issue salaries or net patient revenue? Maybe both.

18. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: Medicare outpatient cost-to-charge [OP Medicare costs/OP Medicare expenses] Range: 0.19 to 0.39 Benchmark:< 0.55 FL median CAH = $0.29/$1.00 (decreasing trend since 2005) U.S. median CAH = $0.48/$1.00 (constant since 2006) On average, FL CAH’s OP costs for Medicare patients is less than half of the related charge. A value less than 0.50 may indicate high patient volume, gross charges are high, costs are low, or a combination of these factors.

19. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: Patient deductions [worksheet G-3, line 2/worksheet G-3, line 1] Range: 44.31 to 70.41 FL median CAH = 65.31 (51.82 in 2005) U.S. median CAH = 36.78 (30.84 in 2005) A high value indicates high discounts and/or allowances.

20. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: Days cash on hand (an OUTCOME) [calculated at fiscal year end] Range: 0 to 463 days Benchmark: > 60 days FL median CAH = 12.80 days (trend up since 2005) U.S. median CAH = 68.43 days (trend up since 2005) A low value indicates financial difficulty. Need cash? Look here! Contractual deductions Write-offs Contractual underpayments High salary costs compared to volume Denials (<2% of contractual net revenue) Extended time for DNFB (<8 days) POS collections AR collections (<53 days, but don’t stretch to far to fast)

21. Florida CAH Financial Improvement Collaborative (FCFIC) CASH COLLECTION PROCESS (adapted from “The Outsource Group”) 1.Are all non-urgent services scheduled? 2.Are benefits verified prior to the date of service? 3.Does registration staff have access to price lists? 4.Has registration staff been trained to collect? Do they use scripting tools? (“My ex-spouse pays my bills” or “my doctor told me not to worry about the bill”) 5.Are you calculating the patient’s estimated liability prior to the date of service and calling them prior to the date of service to discuss their obligation? Is the expectation that the patient does not have to pay? 6.Do you have a discharge-planning process in place for emergent & non- emergent services? 7.Is your discharge policy written? Is the admin team a participant in this policy? 8.Do you have a cash collections policy? 9.Do you offer prompt payment discounts to encourage self-pay patients to pay at the POS? 10.Are you screening and collecting previous bad debts? 11.Do you have an on-site, third party eligibility vendor?

22. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: CASH COLLECTION MONITORING PROCESS 1.Track cash collections against goal 2.Track POS cash against goal 3.Track clean claims throughput against goal 4.Track denials against goal 5.Track 3 rd party payments against contract rates (under-payments and overpayments) 6.Monitor write-offs against P&P 7.Track credit balance receivables 8.Track patient complaints (if staff is asking for cash up-front, you should be getting complaints initially, especially if that is not the expectation of the patient) 9.If A/R has decreased, is it because of write-offs or improvement in collections 10.Track collection agency netback percent and age of accounts being collected (fishing for easy money?)

23. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: Action Item: update the 4 financial indicators and choose 2 additional indicators by end of December 2012 (when selecting consider upstream or downstream improvements).

24. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: Four aspects to consider about communicating indicators to stakeholders: Indicator > names the financial indicator (net days in A/R) Purpose > trending, snap shot, etc. (trending indicator of overall A/R performance) Value > what the indicator shows or identifies (revenue cycle efficiency) Formula > metrics used to calculate the indicator (net A/R / net patient revenue)

25. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: Jimmy Lewis, CEO theleadershipgrp@mindspring.com Kathy Whitmire, Managing Director kfw@windstream.net Lou Semrad, Director of Clinical Services Lsemrad@gmail.com Susan Wiese, Director of Events & Communications Susan.wiese55@gmail.com

26. Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES: 1)TEMPLATE PAGE