Best practices for migrating healthcare payments to ACH

Transcription

1 Best practices for migrating healthcare payments to ACH Member FDIC Member FDIC Matt Brodis, MBA, MHA Adventist Health System, Inc. June St. John, SVP, CTP Wells Fargo Treasury Management Member FDIC

2 Healthcare industry overview Why is Healthcare such a hot button topic? 17.6% of GDP in 2009 ($2.5 Trillion), projected to 20.3% of GDP ($4.3 Trillion) by 2018 Has grown faster than the economy since the 1960s 10% of the US population accounts for 63% of healthcare spending Public and private sector healthcare spending is fairly evenly split private sector spent 54% in 2007 CMS projects public sector spending will rise to 51% by 2018 as baby boomers move onto Medicare Source: The Kaiser Family Foundation Trends in Health Care Costs and Spending, March

3 Provider value chain functional view C l i n i c a l V a l u e C h a i n Pre Visit Activities Office and Other Visits Inpatient Activities Surgical Cases Post Visit follow up Admin follow up Admin Responsibilities Clinical Technology Systems financial transaction moving earlier in clinical value chain Patient Eligibility; Fin l Evaluation POS Payments Comm l Insurance Billing Comm l Payment Processing Patient Billing Patient Payment Processing Bad debt, Collections, Refunds F i n a n c i a l V a l u e C h a i n 3

4 Healthcare industry EFT adoption Claims Submission Eligibility Verification Claim Status Inquiries Claims Payment Electronic Transactions Paper Transactions Claims Remittance 0% 20% 40% 60% 80% 100% Source: National Progress report on Healthcare Efficiency

5 Patient vs. insurance payment methods How patients pay P-Cards How insurers pay Debit Cards OLBP P-Card OLBP WT ACH Cash Debit Checks Credit Cards ACH WT Cash Credit Cards Checks Source: Payments Trends in the Healthcare Industry A Survey of Healthcare Providers Fall 2010 IAPP/IARP/TAWPI 5

6 Complexity of processing HC payments Average time to post check payments Average time to post eft payments Days to Post Days to Post All Providers Single Hospital Multi-Hospitals Medical Practices and Clinics Physician Offices All Providers Single Hospital Medical Practices and Clinics Multi-Hospitals Physician Offices Source: Payments Trends in the Healthcare Industry A Survey of Healthcare Providers Fall 2010 IAPP/IARP/TAWPI 6

7 Healthcare industry pressures Revenues Medicare/Medicaid reimbursement pressure Private insurance, high deductible pressure Growing number of uninsured Private insurance reimbursement denials/ delays Lower returns on investments Increasing competition Healthcare Providers Expenses Increased labor costs, labor shortages Manual processing Investments in new treatments/medical technology Malpractice and other insurance costs Aging population increases demand Government regulation and oversight 7

8 The perfect storm Continued recession with historically high levels of unemployment Multiple regulatory mandates with overlapping timelines for compliance 5010 and ICD-10 Final rule issued January 2009 Major changes to 837 (claims), 835 (remittances), (eligibility) and other HIPAA transactions ASC X Implementation Guidelines effective January 1, 2012 (required to support ICD-10 changes) ICD-10 effective October 13, 2013 (more characters, codes and complexity) Extensive testing and coordination required for providers and health plans (payers) 8

9 The perfect storm ARRA HITECH (February 17, 2009) Providers must demonstrate meaningful use of EHR technology to qualify for incentives Incentives start in 2011; Penalties start in 2015 New privacy and security provisions includes business associates (FIs); both civil and criminal penalties may apply Support for regional and state Health Information Exchanges funding is available to states to set up HIEs 9

10 The perfect storm Transaction Comments Adoption Date Effective Date Compliance Penalties Eligibility and Benefits (270/271) Claims Status Inquiry / Response (276/277) Electronic Funds Transfer (EFT) Electronic Funds Transfer (EFT) and Electronic Remittance Advice (ERA/835) Health Claims or Encounters (837 P and I) Enrollment / Disenrollment (834) Health Plan Premium Payment (820) Referral Certification and Authorization (278) Claims Attachment (275/277) May allow use of machinereadable ID card May allow use of machinereadable ID card Allows for automated reconciliation of payment to remittance advice 07/01/ /01/ /31/2013 4/1/ /01/ /01/ /31/2013 4/1/ /01/ /01/ /31/2013 4/1/ /01/ /01/ /31/2013 4/1/ /01/ /01/ /31/2016 Not specified 07/01/ /01/ /31/2013 Not specified 07/01/ /01/ /31/2013 Not specified 07/01/ /01/ /31/2013 Not specified 07/01/ /01/ /31/2013 Not specified 10

11 Healthcare industry challenges Fragmented world s largest cottage industry Payers frequently change the rules Managing multiple service providers, systems and contracts Changing priorities, slow decision making Complexity of payment structure 11

12 Automation challenges Complexity of remittance detail Lack of standardization across payers Multiple payments for same claim Multiple adjustments and submissions Payments and remittance detail received at different times and on different systems Large size of remittance files 12

13 Impacts to the bank/fi industry ARRA HITECH privacy and security breaches Business associate impacts Need to review and revise BAA agreements Patient Protection and Affordable Care Act (HR 3590) Will depend on final operating rules adopted Tests are underway (NACHA, SWIFT, TCH) to identify any new transaction sets that will enable data and $$ to travel together electronically more efficiently Fewer checks and EOBS; more EFTs and ERAs Will depend if any provisions regarding payments are modified or eliminated 13

14 Impacts to the bank/fi industry 5010/ICD-10 Changes revenue cycle management impacts Payer to provider (B2B) Extended lockbox 835 conversion testing EFT/ERA testing (820s) Patient to provider (C2B) Point of service testing Retail lockbox 835 conversion testing Other EDI products capable of creating 835 or 820 formats for providers - need to support testing 14

15 Best practices for banks/fi industry Provide solutions that meet HC industry electronic payments needs Leverage our core competencies of developing standards that facilitate the efficient movement of $$ and remittance data from FI to FI Participate in industry initiatives/pilots: NACHA, SWIFT and TCH Continue to educate HC indsutry on our plans; monitor their progress on these mandates Educate HC industry on any new FI industry solutions that emerge in response to these mandates 15

16 Common bank/fi healthcare products Patient point of service solutions include: Eligibility verification (270/271) Estimation of patient responsibility (co-pays, deductibles) (270/271) EFT (online bill payment or recurring payment plan) credit and debit card acceptance at POS Commercial/government insurer payment solutions include: EFT (CCD+, CTX) ERA receipt from payers (835) Automated and exception reconciliation options 16

17 Adventist Health Systems, Inc. A Best Practice Case 17

18 Florida Sanitarium

19 Florida Hospital

20 Christ Centered: Extending the Healing Ministry of Christ Largest Not-For-Profit, Protestant Healthcare Organization in the US Healthcare Facilities in 10 States 7,700 Licensed Beds 55,000 Employees 8,500 Physicians 2 Hospital Divisions (7 regions, 44 hospital campuses) Long-Term Care Division Total Operating Revenue of $6 Billion Serving More than 4 Million Patients Annually Winter Park, Florida 20

21 $6 Billion 21

22 22

23 KPI Financial Trending 23

24 Upfront Cash Collections Trend 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 2.1% 2.4% 2.6% 2.7% 3.1% 3.1% 3.3% 3.5% 0.5% 0.0%

25 Net Days in A/R Trend * All years - weighted using a full year of revenue & excludes bad debt from revenue 25

26 Patient Payments vs. Insurance Payments 26

27 Additional Reimbursement Strategies 270/271 Eligibility Transactions Ability and Propensity to pay. Price Estimation by service and physician Address Verification and Validation 276/277 Claim Status Inquiry Electronic Refunds 27

28 Completed Clinical Initiatives EHR Computer Assisted Coding Concurrent Scanning CPOE 28

29 How we get paid All AR payments are processed in one of three places Lockbox Client Initiated Payments: Paid via Kiosk, Patient Portal, E-Sig, Payment Manager. All transactions are nightly processed to update AR Remote Deposit Capture 29

30 Lockbox Payments Each facility has 3 lockboxes that may receive payments via: EFT, Check, Cash, Credit Card. Government Commercial Patient Payment Processed at the lockbox facility and deposited to the appropriate DDA. The paper backup is sent to the corresponding billing office to post payments either paper or 835. Credit Cards are processed by Merchant Services Vendor at Lockbox and deposited. 30

31 Paper to EDI Advantages Automation of Posting FTE Reductions Paperless No Shipping Cost Online Archival 100% Payments EDI Image Indexing Online Search Tools Disadvantages Expensive OCR Technology Still Evolving 31

32 Challenges Of Paper to EDI Conversion Multiple Entities paid under shared Tax ID Number Cultural shift in roles Shift from See & Key to Analytical problem solver Paper From My Cold Dead Hands Charlton Heston Conversational remits difficult to capture Reconciliation Challenges 32

33 Paper to EDI Implementation Recommendations Enroll for 80-90% EFT/ERA Direct payments (Transactional Volume) Exhaustive approach to Verification Rules Regularly revisit rules (Payor Mix Changes) Provide 100% Claim Data as baseline Use Pay To Address and NPI Split where applicable Require Banking Institution accountability support 33

34 Patient Payment Methods Credit Card 38.0% Check to AHC 9.3% Paper Checks: 44.5% Cash: 8.3% Credit Card 45.0% Check to AHC 12.5% Paper Checks: 38.9% Cash: 3.6% 34

35 Patient Payment Venue In Person 46.9% Lockbox 45.0% Portal 8.1% Kiosk 0.1% In Person 51.2% Lockbox 40.0% Portal 8.7% Kiosk 0.1% 35

36 Insurance Payment Method Paper Check 85.4% EFT 14.6% Paper Check 23.4% EFT 76.6% 36

37 Recommendations Location, Location, Location Kiosk, Mailed Statements, Online Bill Pay, Cash Drawer, Service Desk Pay their way Credit Card: Visa, MC, Discover, Amex Check Money Order Cashiers Check Travelers Check Catch and Don t Release Payment plans, automatic withdrawal, guarantor billing, reapply not refund 37

38 Questions? 38

39 2011 Wells Fargo Bank, N.A. All rights reserved. For public use