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WCLS Revenue Cycle Summit

VIEWS: 2 PAGES: 44

									Next Generation Financial
      Counseling
         September 15, 2008
  Garett Jackson and Marie Mingus
  National Patient Account Services
       Learning Objectives

• Understanding the Self Pay Portfolio
• Maximizing your collector’s efficiency
  and effectiveness
• Overcome Objections to Payment
• Consistently negotiating for cash
   Understanding the Self Pay
           Portfolio
Benchmark – Evaluate – Segment - Measure
 HCA’s Bad Debt Action Plan
• HCA started implementing its Bad Debt Action Plan
  in an effort to understand and attack the issue
  quickly. NPAS was a key focus of the plan.
  – What does the healthcare portfolio look like compared to
    other industries?
  – Is it possible to change the early-out collection strategy to
    address the portfolio?
  – Which resources (up-front, early-out, primary) are best
    equipped to handle the inventory?
Collections Life Cycle
   Front End              Early Out Collections Collection Agency                Bad
   Collections                   (NPAS)                                          Debt


Pre-admit payments        Payment from letters      Payment from credit
                                                    reporting
Payment at registration   Payment from contacts
                                                    Payment from legal actions
Payment at discharge      Payment from re-billing
                                                    Payment from aggressive
Payment from billing      Customer Service Focus
                                                    collection activity
                          Identified as Facility
                                                    Identified as collection
                                                    agency


                               NPAS Statistics
       NPAS Credit Scoring Notes
•   Used the Equifax ERS 3.0 scoring      •   Self Pay was analyzed for
    method, which ranges from 1 to            comparative purposes. However,
    1000                                      the study compares Copay and
•   NPAS grouped number of                    Deductible in general.
    accounts in scored index ranges of    •   Search America provided scores
    100                                       for approximately 241k accounts
•   Scores of 0 mean that no data was         with a 96% score rate
    available                             •   Used a random sample of closed
•   Search America provided six               accounts
    industry comparisons done by          •   Statistical accuracy of sample is
    Equifax                                   95% +/- 4% as a valid
•   NPAS compared results against All         representation of our inventory
    Industries, Auto Finance, and
    Bankcard Industries
•   Work Effort is defined as Attempts,
    Contacts and Letters
                                                            NPAS Inventory
                                                        Credit Scoring Index Ranges by Industry Compared to Recovery Rate at NPAS
                            70%                                                                                                                                                            90%




                                                                                                                                                                                           80%
                                      77.31%
                            60%


                                                                                                                                                                                           70%

                            50%

                                                                                                                                                                                           60%
Percent of Total Accounts




                                                                                                                                                                                                 Recovery Percent
                            40%
                                                                                                                                                                                           50%


                                                        44.09%

                                                                                                                                                                                           40%
                            30%



                                                                      27.93%                                                                                                               30%

                            20%

                                                                                                                                                                                           20%
                                                                                       17.65%
                                                                                                       12.67%
                            10%                                                                                        11.02%
                                                                                                                                      7.69%                                      6.92%     10%
                                                                                                                                                    6.44%         5.07%



                            0%                                                                                                                                                             0%
                                  901-High       801-900         701-800       601-700            501-600         401-500         301-400       201-300         101-200      000-100

                                      NPAS (Hospital) Industry        Average of All Industries             Average of Auto Finance         Bankcard Industry         NPAS Recovery Rate
                                    Upfront Collection Efforts
                                               HCA Upfront Collections by Scoring Range

                            6.00%
                                     5.0%
Percent Recovered Upfront




                            5.00%

                            4.00%
                                              3.0%
                            3.00%
                                                         1.8%       2.0%
                            2.00%
                                                                               1.0%
                            1.00%                                                          0.7%       0.6%       0.6%                  0.6%     0.7%
                                                                                                                            0.5%

                            0.00%
                                                0


                                                           0


                                                                      0


                                                                                 0


                                                                                            0


                                                                                                       0


                                                                                                                  0


                                                                                                                             0


                                                                                                                                        0
                                    h




                                                                                                                                                 d
                                             90


                                                        80


                                                                   70


                                                                              60


                                                                                         50


                                                                                                    40


                                                                                                               30


                                                                                                                          20


                                                                                                                                     10
                                    ig




                                                                                                                                              re
                                   H


                                           1-


                                                      1-


                                                                 1-


                                                                            1-


                                                                                       1-


                                                                                                  1-


                                                                                                             1-


                                                                                                                        1-


                                                                                                                                   1-


                                                                                                                                            co
                                 1-


                                         80


                                                    70


                                                               60


                                                                          50


                                                                                     40


                                                                                                30


                                                                                                           20


                                                                                                                      10


                                                                                                                                 00


                                                                                                                                           -S
                               90




                                                                                                                                         on
                                                                                                                                       N
                                                                                                                                     0
                                                                                                                                   00
                                                                                Pct Recovered Upfront
                                                                 NPAS Self Pay
                                                        Credit Scoring Index Ranges by Industry Compared to Recovery Rate at NPAS
                            70%                                                                                                                                                            60%




                            60%
                                  48.58%                                                                                                                                                   50%




                            50%

                                                                                                                                                                                           40%
Percent of Total Accounts




                                                                                                                                                                                                 Recovery Percent
                            40%


                                                                                                                                                                                           30%


                            30%


                                                        21.80%
                                                                                                                                                                                           20%

                            20%

                                                                      12.22%


                                                                                                                                                                                           10%
                            10%
                                                                                       6.56%           4.48%
                                                                                                                       4.04%                                                     3.07%
                                                                                                                                                    2.24%         2.03%
                                                                                                                                      2.15%

                            0%                                                                                                                                                             0%
                                  901-High       801-900         701-800       601-700            501-600         401-500         301-400       201-300         101-200      000-100

                                      NPAS (Hospital) Industry        Average of All Industries             Average of Auto Finance         Bankcard Industry         NPAS Recovery Rate
NPAS Self Pay - Emergency Room
                                                          Credit Scoring Index Ranges by Industry Compared to Recovery Rate at NPAS
                              70%                                                                                                                                                            60%



                                    52.76%

                              60%
                                                                                                                                                                                             50%




                              50%

                                                                                                                                                                                             40%
  Percent of Total Accounts




                                                                                                                                                                                                   Recovery Percent
                              40%
                                                          31.79%
                                                                                                                                                                                             30%


                              30%



                                                                                                                                                                                             20%

                              20%
                                                                        14.41%



                                                                                                                                                                                             10%
                              10%                                                        8.74%
                                                                                                         6.27%
                                                                                                                         4.44%                                      2.79%          3.24%
                                                                                                                                        2.78%         2.79%


                              0%                                                                                                                                                             0%
                                    901-High       801-900         701-800       601-700            501-600         401-500         301-400       201-300         101-200      000-100

                                        NPAS (Hospital) Industry        Average of All Industries             Average of Auto Finance         Bankcard Industry         NPAS Recovery Rate
                            NPAS Self Pay – Outpatient
                                                        Credit Scoring Index Ranges by Industry Compared to Recovery Rate at NPAS
                            70%                                                                                                                                                            80%




                                  68.54%
                                                                                                                                                                                           70%
                            60%



                                                                                                                                                                                           60%
                            50%



                                                                                                                                                                                           50%
Percent of Total Accounts




                                                                                                                                                                                                 Recovery Percent
                            40%


                                                                                                                                                                                           40%


                            30%

                                                                                                                                                                                           30%
                                                        29.17%


                            20%                                       21.12%
                                                                                                                                                                                           20%
                                                                                       18.94%



                            10%                                                                                        9.19%
                                                                                                       7.42%                                                                               10%
                                                                                                                                      6.95%                                      5.88%
                                                                                                                                                    4.16%         3.22%


                            0%                                                                                                                                                             0%
                                  901-High       801-900         701-800       601-700            501-600         401-500         301-400       201-300         101-200      000-100

                                      NPAS (Hospital) Industry        Average of All Industries             Average of Auto Finance         Bankcard Industry         NPAS Recovery Rate
NPAS Self Pay
Work Effort vs. Recovery Rate

                        Average Work Effort Versus Recovery Rate by Index Ranges

                6.1

     5.6                      5.7
                                        5.6
                                                      5.3
     48.6%




                                                                   5.1
                                                                                 5.0      5.0       5.0
                                                                                                              4.7
                21.8%




                              12.2%




                                        6.6%




                                                       4.5%




                                                                   4.0%




                                                                                                              3.1%
                                                                                          2.2%
                                                                                 2.1%




                                                                                                    2.0%
   901-High   801-900       701-800   601-700       501-600      401-500      301-400   201-300   101-200   000-100

                                                Avg Workeffort     Recovery Rate %
NPAS Credit Scoring Flow
(Self Pay)
           FC 99
           Day 1




       Score account




       Day 2, receive                               Category =   No
                                                                                 Current Flow
        credit score                                  Low ?




                                                    Yes




                                                      Letter 1    Hold 20 days         Final Notice Letter   Wait 30 days   To Agency




 Note:
 No match, match no score and typos will follow current flow
 Phase II - No match may go into low
                   NPAS Copay and Deductible
                                                        Credit Scoring Index Ranges by Industry Compared to Recovery Rate at NPAS
                            70%                                                                                                                                                             90%


                                        83.72%
                                                                                                                                                                                            80%
                            60%


                                                                                                                                                                                            70%

                            50%

                                                                                                                                                                                            60%
                                                        58.98%
Percent of Total Accounts




                                                                                                                                                                                                  Recovery Percent
                            40%
                                                                                                                                                                                            50%
                                                                      47.25%


                                                                                                                                                                                            40%
                            30%
                                                                                       36.58%


                                                                                                                                                                                            30%
                                                                                                       27.61%
                            20%                                                                                          25.15%
                                                                                                                                       21.57%                                      22.32%
                                                                                                                                                                                            20%
                                                                                                                                                       17.88%

                            10%                                                                                                                                      13.22%
                                                                                                                                                                                            10%




                            0%                                                                                                                                                              0%
                                  901-High       801-900         701-800       601-700            501-600         401-500         301-400       201-300         101-200       000-100

                                      NPAS (Hospital) Industry        Average of All Industries             Average of Auto Finance         Bankcard Industry         NPAS Recovery Rate
NPAS Credit Scoring Flow
(Copay and Deductible)
    Non FC99
     Day 1




     SP Letter




                             Contact with      No                                                       No
                                                                                     Category =
   Wait 30 days           Patient or payment            Score Accounts   Day 31                              Current Flow
                                                                                       Low ?
                               received?



                                                                                      Yes
                            Yes




                             Current Flow                                         Final Notice Letter




Notes:                                                                              Wait 30 days              To Agency
 No match, match no score and typos will follow current flow
 Phase II - No match may go into low
     Keys to Implementation of
              Scoring
• Tools: Do you have the       • ROI: What will happen to
  right tools to manage          FTEs that might be
  workflow with a score?         working these accounts?
• Workflow: Determine          • Risk Tolerance: There
  what will be done with the     will be accounts that are
  score ahead of time            not correctly predicted
• Segmentation: What           • Board Acceptance:
  accounts will be scored?       Charity and Bad Debt
  Cost can be an issue.          processes require
                                 approval
   Maximizing Collector
      Performance
Select – Train - Motivate – Measure
    Hiring and Motivating CSPs
• Hire motivated employees
  – Test and interview based on motivation as much
    or more than experience
  – Train them to do the task
• Provide the CSP with tools to improve their
  performance daily
• Supervisors/Team leaders incentivized on
  same metrics to be consistent
• Set incentive plans to encourage team to
  compete against the others and meet goals
                Training
• Dedicated training resources provide
  consistent new-hire experience
• Documented materials and processes
  increase efficiency of training
• Formal class training ensures the basics
  are well defined
• Focus on negotiation techniques to
  ensure the CSP is asking for money
• Continuous coaching by supervisor to
  reinforce training
Measuring Productivity and Quality
Productivity
• Develop metrics for both efficiency (calls per day) and
  effectiveness (collections per hour, average pmt size)
Quality
• Perform quality reviews monthly on agents
• Develop a mechanism to inspect, report and improve
  process defects
Reporting
• Utilize the metrics in a balanced scorecard to keep CSPs
  focused on the right things in the right order
• Make the standards and measurements known to all CSPs
  at least daily
Balanced Scorecard – Incentive Plan
                                Weighted
                                Factors

                            Gold, Silver, and
                            Bronze payouts
                            on bonus points
                            Bonus Points –
                            70% measuring
                            efficiency and
                            effectiveness of
                            CSP
                            30% - Other
                            quality measures
                            Red figures are
                            below team avg
                            (coaching opp.)
                            RED LINE: Must
                            be above to
                            bonus
      Overcoming Objections

Identify – Understand – Overcome - Negotiate
 People Object for Three Reasons

1) Avoidance – The GN does not have or
   cannot see a solution.
2) Confusion – The GN does not
   understand what you are asking them to
   do.
3) “What’s in it for me?” -- The GN has not
   been given a convincing WIIFM.
            Examples of Objections
                                Feeling
 Feels that the bill is too high
 Feels the food was bad
 Feels the wait was too long
                                  Fact
 Recently became unemployed
 Holiday Shopping
 Multiple Medical Bills
                                Hidden
 In the car
 “I was just leaving”
 Spouse handles finances
   Seven Things Never To Do
1) Don’t be condescending
2) Don’t blame the GN or try to prove the GN
   wrong
3) Don’t interrupt our customers
4) Don’t tell the GN “To calm down”
5) Don’t treat your customers like just another
   inquiry
6) Don’t use an argumentative tone of voice
7) Don’t blame someone else or company policy
Steps to Overcome Objections
1. Pause:
  –   Not responding is critical to maintaining control of
      the negotiation
  –   GN may overcome objection by thinking out loud
2. Empathize:
  –   Put yourself in the GN’s shoes. Apologize if
      warranted.
  –   “I understand how you feel…”
3. Explore and Probe:
  –   If you don’t understand, ask before assuming.
  –   Get the GN involved. Ask for alternate money
      sources.
Steps to Overcome Objections
4. Agree:
  –   Find some point of agreement with the GN
      before you start addressing the objection
  –   The GN will not object as much if they know you
      understand the problem.
5. Playback:
  –   Restate the objection in your own words.
  –   Avoids misunderstanding and ensure the right
      questions are being answered
6. Solve:
  –   Take in the information above and offer a
      solution by pointing out the benefits
                     Summary
•    Reasons Why People Object:
     1.Avoidance 2. Confusion 3. WIIFM
•    Types of Objections
     1. Feeling 2. Fact 3. Hidden
•    Remember the six steps to overcome
     objections:
    1. Listen              2. Empathize
    3. Explore and Probe   4. Agree
    5. Playback            6. Solve
Negotiation: What to Expect


                          82% of SP
                          calls don’t
                          commit to
                          pay
            Negotiating for Money
THE MOST MONEY AS QUICK AS POSSIBLE
• Make sure you are not automatically setting due dates out 30 days
         • Post Dated/Recurring Checks
         • Balance Resolutions
• Explore Non Linear Resolutions
       • Before issuing a final notice make sure you explore a non
         linear arrangement. Ask probing questions! It’s possible that
         the customer’s current situation may only be temporary
• Negotiate!
          • Settlement offers do not have to automatically 20-25%
          • Don’t forget that we can negotiate in 5% increments
•   Sixty months is not always the right amount of time
          • Make sure that 60 months is your last option!
          • Remember this option exists only as a LAST OPTION
     Sample Payment Recipe
1. Can you pay today by check-by-phone or credit
   card?
2. Can you pay by check within 20 days?
3. Can you pay half this month and the other half next
   month?
4. Can you pay one third this month and the other over
   equal monthly installments?
5. Can you pay (max to min up to 60) months
6. Let me see if you qualify for a settlement for this
   facility?
7. You may be eligible for financial assistance at the
   facility.
 Benefits of Payment Recipe
• Consistency among all staff on what to
  ask for and in what order
• Starts with instant cash (Check by
  Phones/Credit Cards) and progresses
  toward partial pmts and settlements
• Provides basis for quality
• Becomes part of the routine
      Other Payment Sources
• Selling A/R
  – Cash infusion for best credit accounts only
  – Ensure a low-cost effort is done prior
  – Lots of players entering market, some are losing money
• Longer Partial Payments
  – Time/value of money is irrelevant if you don’t receive
    payment
  – Collection agencies charge between 10% and 35%
• Partially Paid Settlement
  – Combination of partial payments and settlements
  – Traditional settlements require a large one-time payment
    that does not usually help a cash-strapped GN
  – Negotiation of both what the amount needs to be, and
    how long to pay it off are the two basic tenets of a
    financial transaction.
                   Review
• Understand your population’s ability to pay
• Utilize a segmentation philosophy
• Hire the right skilled workforce
• Invest in the proper amount of training
• Incentives should reward CSPs for higher
  payments per transaction
• Standardize the collection process
• Getting the GN to start paying will result in
  payment in full most of the time.
             Questions?
• Garett Jackson, CPA
  – Chief Financial Officer
  – National Patient Account Services
  – Garett.jackson@hcahealthcare.com
• Marie Mingus
  – Sr. Operations Manager
  – National Patient Account Services
  – Marie.mingus@hcahealthcare.com
Additional Material
            Seal the Deal!
• Always request a firm commitment
  immediately after answering an objection.
• Always recap with M.A.D.
  – Method of payment
  – Amount of payment
  – Due Date
Balanced Scorecard - Unit




                     Unit Performance Index
             Accumulated unit averages from bonus
             plan monthly with same weightings
             Ranked over prior year and previous
             months
             Index above 1.000 means better than
             average performance of other months
             Incentivize Managers to increase results
  HCA Champion-Challenge:
             40% More Netback per Account Placed
                       Net Back per Account
                            All Self Pay




Competitor                                    $105




    NPAS                                             $148
HCA Champion-Challenge
                  Resolved 13% Faster
                        Account Status 8/1/06-2/29/08
                                All Self Pay




             0%   20%                 40%              60%   80%           100%



Competitor                720,391                            442,005




    NPAS                       775,256                           281,881



                   Num Accts Closed      Num Accts Active
Tips for Addressing Objections
• Never attempt to overcome an objection if
  there is any doubt that it is valid.

• Always isolate an objection before you
  attempt to handle it.

• Address each objection individually.
        Instant Cash Sources
(Check by Phone and Credit Card)
  Ask for the full balance due on the account
  as the first option in the balance resolution
  process.
• Instant Cash Pointers:
  – IT’S FREE!! Most companies charge $5-$25 for the
    same convenience
  – Through the IVR, the credit card and check by phone
    options are totally secure
  – No postage necessary for a check-by-phone
    Payment in Full by Check
  If the full balance cannot be paid by an instant
  cash source, ask for PIF by check or money
  order in a 30 day period.
• PIF pointers
   – Offer the payment in a 10, 15, 20 or 30 day period.
     Remember to attempt to get your money in as soon as
     possible
   – If GN refuses the post-dated option, please be sure to advise
     him/her to add the account number to the check or money
     order being sent
   – Also advise the GN to mail the payment at least 10 days
     prior to the due date
Partial Payment Characteristics
• Statistics show that 97% of the cash collected
  comes from accounts that pay in full.
• Establishing a partial payment plan that works for
  the GN helps the GN and ultimately resolves the
  account
• Balance Resolution Pointers
   – Always offer recurring cash sources (CBP/CC)
   – Set standard minimum amount and maximum
     months for CSPs
   – If the GN shows a willingness to pay or offers to
     pay a specific amount that is below guidelines, the
     CSP can negotiate out to a maximum of 60
     months

								
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