1. Building a Revenue Cycle Vendor Management Program Presenters: Leah Klinke – Director Patient Financial Services, WVU Healthcare Nicholas Fricano – President, Healthfuse September 26, 2014

2. “If you chase 2 rabbits…you will not catch either one” – Russian Proverb 2

3. 3 Background Big shoes to fill Growing list of projects – EPIC upgrade, meaningful use, business office consolidation, etc “Tightening of the belt” – cost savings initiatives and revenue recovery goals Shifted more to external partners to “share the load” (and the risk) Required more from our vendor partners; management is a 2-way street Focus was required achieve goals in a timely and efficient way (doing it the right way)

4. 4 WVUH Trend Similar to Industry* – Spending More (on third-parties) and Getting Less (rising cost to collect) Percentage of Revenue Cycle Operating Budget Spent on Third- Parties Cost to Collect (Headcount, Technology, Third-Party Spend/Outsourcing) * Healthfuse statistics as of January 2012 – based on combination of collected data and surveys from 983 health systems

5. 5 Our Top 5 Challenges: Patient complaints or compliance issues Over invoicing or high fees in general Sub-par performance (and functionality) or limited visibility into performance Mistakes requiring our time to resolve (e.g. inventory reconciliation) Limited vendor interaction or limited vendor understanding of our goals and day to day operations

6. 6 #1 – Developed Vendor Portfolio

7. 7 #2 – Formed a Vendor Management Office (VMO) Manager – dedicated leader for all things revenue cycle vendors – evaluating current partnerships, new partnerships, etc. Liaison between WVUH RCM leadership and vendor Analysts – dedicated team responsible for tracking and monitoring outcomes, evaluating trends regarding outcomes and activities, developing business cases for change, and conducting market research Auditors – dedicated team responsible for auditing accounts and determining root causes of errors – manual audits and technology-enabled audits Legal – full time resource is not required. Contract renegotiations required IT – full time resource is not required. We generated reports and customized a technology to enable macro-auditing, streamline reporting, and reconcile invoices and inventories

8. #3 – Developed Outcome-Based Scorecards Net Liquidation Comparison KPITargetActual Gross liquidation % on balances > $5,00012.5%9.5% Gross liquidation % on balances < $20048%45% Median number of payments per patient0.50.3 Average payments by patient$113$56 Median age of first payment - BAI5463 Median age of first payment - PSP9394 8 #5 – And Set Goals

9. 9 #4 – Developed Activity-Based Scorecards (Audit) KPITargetActual Median # of phone attempts – first 12093 Median contacts per patient0.70.2 Median statements per patient44 Median day of first contact4178 Median age of account placement3256 Vendor compliance to SLAs85%47% #5 – And Set Goals

10. 10 #6 – Monthly Reconciliations -Invoices -Inventories #7 – Consistent Operating Rhythm & Governance

11. 11 #8 – Coaching & Remediation Common Findings SLA and compliance discrepancies Improper balance adjustments Incorrect patient demographic information Mismanagement of automated workflow tools Unanswered requests for the application and/or release of account holds Insufficient tracking of defaulted payment plans Inadequate documentation of account notes Common Improvements Refined inventory and transaction reconciliation to correct balance discrepancies Revised system logic used to apply automatic f/up based on manually applied acct dispositions Honed tracking of FA and CC apps Elevated accounts in need of supervisory review - weekly Shortened response requests for the app and/or release of acct holds Augmented utilization of skip tracing protocols

12. 12 Invoice issues – 100% audits (and across vendors) Accounts not worked to SLA or industry standards. SLA compliance was 8% - 100% account audit (tech-enabled) and manual review of exceptions; compliance is over 95% today Outdated contracts; old terms – vendor getting paid, but not receiving or working accounts – renegotiated contracts Tools not used but being paid for – discontinued contracts Addressed RFPs (underpay, TPL, BD) that were sitting on desk for 6 months – dedicated resource to coordinate entire process High Impact Efforts (Areas of Focus) – First 180 Days

13. “Barry Bonds doesn’t step up to the plate thinking home run. He steps up to the plate focused on a sweet swing” – Jim Camp (renowned expert negotiator) 13 Managing the Fundamentals is Key…

14. “Success demands singleness of purpose” – Vince Lombardi 14 But Since It’s Football Season…

15. 15 Questions? For Additional Information: Leah Klinke klinkel@wvuhealthcare.com 304.598.4198 Nick Fricano nfricano@healthfuse.com 414.988.1136