Citi Healthcare Research Highlights Report

Research Summary

Since the passage of enabling legislation, consumer-directed healthcare and high-deductible health plans have continued to expand in the marketplace, and they are seriously impacting healthcare providers in many important and often negative ways. In order to thrive, or perhaps even survive, physicians and hospitals must shift their revenue model from dependence on insurance reimbursement to aggressive capture of all possible out-of-pocket patient payments. This trend towards consumerism and the associated impact is now set to accelerate dramatically with the implementation of the Patient Protection and Affordable Care Act of 2010 (PPACA).

This shift to a more retail-like model in healthcare is adding new levels of accountability, significant operating challenges and difficult reporting requirements. Today's consumers are empowered by information and want to make their healthcare decisions the same way they make other purchase decisions, based on cost, quality and even other patient or consumer reviews. They are accustomed to finding that information online as well as receiving and paying bills from a single source with 24/7 access to flexible payment options.

Many healthcare providers, already taxed by years of forced regulatory change and a backlog of technology driven requirements, lack the staff and/or financial resources to experiment with unproven solutions. These providers are looking for best practices and peer advice to help guide them to successful technology investments and policy changes. Citi Enterprise Payments recently commissioned a research study with Boundary Information Group to provide physicians and hospitals with a detailed examination of the forces shaping the market as well as the strategies, technologies and best practices providers are currently implementing in response to the rise of consumer-directed health plans, and potential outcomes for the future. Through lengthy interviews with more than 50 prominent healthcare thought leaders, this report provides a thorough investigation of what is working in the market and the specific changes for which healthcare providers need to prepare. The full report can be downloaded at www.boundary.net.

An excerpt of the full report, this Citi highlights paper focuses on:

• The benefits and some key limitations of current technology solutions
• The need for a patient-centric lens on the healthcare revenue cycle and an introduction to an innovative new service offering by Citi designed to address this current need – Money² for Health
• A top ten list of proven best practices for providers

The Benefits and Limitations of Current Technology Solutions

More than 85 percent of healthcare providers interviewed are in some phase of implementation or planning for improvements in their ability to address higher patient financial responsibilities more effectively. Those initiatives include implementing new processes and technologies including increased use of eligibility checks and financial estimation tools and offering more flexible, digital payment options for patients.

New Processes and Technologies

In order to minimize the negative impact of the increasing patient responsibility amounts, more than half of those interviewed are placing more emphasis on the front end of the revenue cycle. This involves including financial discussions during appointment scheduling, preregistration, registration and discharge, and doing a more thorough collection of patient demographic, insurance, address and employment information. Forty percent of the interviewees said that the Internet is being used increasingly to enable registration information collection, appointment scheduling, delivery of test results, delivery of patient statements and for patient bill payment.

Three quarters of the providers interviewed are aggressively adopting additional online (web-based/cloud) information and services to improve patient transparency, reduce operating costs and enhance customer service – the patient experience – in ways similar to other service industries. However, most providers have only begun leveraging web services to improve quality and efficiency. Today, less than half of the interviewees take payments online and patient portals currently account for a very small percentage of payments received. This is expected to increase dramatically over the next 18-24 months, according to the study.

Eligibility Checks and Estimator Tools

All providers interviewed said they have adopted some level of automated real-time eligibility verification of health plan benefits and coverage inquiries as mandated by the Affordable Care Act. However, several indicated they still do not get all the information they need to support high levels of collection at the time of check-in and check-out or discharge. Many have taken the next step and created direct connections with their biggest insurance networks or "payers" to increase the completeness and usability of the data supplied to better quantify co-pay amounts, deductibles status, maximum out-of-pocket benefits and coverage limits. Technology advances have made this transition practical and it is increasingly beneficial for both providers and payers to have a direct electronic relationship to exchange this data.

There are a number of challenges, however, to patient acceptance of paying from estimates as well as implementation complexity to properly utilize integrated patient responsibility estimates. Despite that, patient financial responsibility estimator tools are helping to drive accelerated patient collections by better educating patients and enabling receipt of at least partial payments earlier in the revenue cycle amongst more than one half of the providers interviewed.

Ongoing Challenges

More than half of those interviewed said additional outside technology is needed to improve handling of complicated self-pay collections. Healthcare information systems, especially in the institutional setting, often do not efficiently handle complex patient debt processes or health benefits coverage. Consequently, most providers addressing this issue have either purchased, or are in the process of evaluating, third-party products and services to handle these functions.

According to the interviewees, no single vendor currently offers an easy-to-use, comprehensive, fully integrated, point-of-service product that meets their needs. Current offerings have challenges with integration, duplication and the ability to meet individual facilities' business requirements.

One bright spot appears to be the development of web-based patient portals. They enable efficient online payments and are familiar to consumers. They also simplify and reduce the effort and costs involved in accepting higher volumes and higher dollar values of patient payments. Increased adoption of some payment portal offerings may even help providers qualify for Meaningful Use credits, depending on the specific portal capabilities and deployment model. Most of the focus of patient portals has been on improving scheduling, secure physician communications, and patient access to clinical information. Patient-friendly payment portals are early in the adoption cycle and are not yet frequently utilized by providers.

Citi Launches the Money² for Health Web-Based Patient Portal

Providers overwhelmingly note they would prefer a single vendor that offers a patient-friendly solution that is easy and cost effective to implement. Research indicates they require a point-of-service product that can verify patient identity, check health plan eligibility, report benefits information, predict propensity to pay, process payment card transactions, accept and manage payment plans for the patient obligation, and facilitate a "loan" when needed. They are seeking new tools to help simplify the patient billing process for consumers, lower their costs to collect from patients, and at the same time, improve the patient experience, which they often times lose control of as soon as the patient leaves their facility.

If technology use and adoption trends across other consumer-driven markets prevail, providers should also be looking for a technology solution that offers a single point of entry with one password and 24/7 accessibility through any device including mobile phones and tablets. Providers recognize that consumers often do not pay, or do not promptly pay, their medical bills due to the confusing billing process and a lack of the tools consumers have come to expect in their online shopping, banking, and payment experiences.

Enter Citi and Money² for Health

Addressing many of the challenges outlined above, Citi Enterprise Payments recently launched a new mobile and web-based patient payment solution – Money² for Health. The payment platform, which brings together a network of insurance carriers and healthcare providers, alerts patients pro-actively when medical transactions are ready for payment, enables patients to go online or use their mobile devices to view and reconcile their healthcare bills, pay amounts due and view past payments – all in one digital location. This solution is being offered to consumers in the U.S. by participating health insurance providers (Aetna is the first health insurance provider to participate) and participating healthcare providers to enable mobile and online healthcare payments.

For healthcare providers, Money² for Health is an easy-to-implement web-based patient payment system that will continue to evolve with provider needs and consumer expectations. The platform aims to simplify and expedite the patient payment process in several ways which are expected to help providers lower their collection costs, reduce bad debt, and speed collections, while improving the patient experience, with features including:

• Proactive consumer alerts when medical expenses are ready to be paid
• Easy viewing and reconciliation of healthcare transactions, including their health plan payments and their personal financial responsibility with links to insurance explanation of benefit (EOB) details
• Payment via mobile or web
  • Patients will be able to pay their enrolled providers using their preferred funding source (such as checking accounts, credit cards or tax-advantaged accounts) and will be open to customers of any bank
  • Multi-channel alerts with the option to "Pay Now" via mobile device will be available through patients' choice of channel (such as email or mobile alert)
• User-friendly presentation of current and historical healthcare spending
  • Patients will be able to view and analyze all of their healthcare spending, leading to better planning decisions
• One portal, one enrollment and one password
• Fewer questions and calls
  • Access to online information will improve patient understanding and reduce the need to reach out to call centers

The Money² for Health platform is now being piloted in select markets and is expected to launch nationwide in late 2013.

Healthcare Provider Top Ten Best Practices

The following best practices list describes the components of a complete and comprehensive solution to effectively address all types of self-pay accounts. This is a list of the top ten best practices as identified by interviews across the last five years coupled with reviews of select industry publications, web presentations and other independent research.

Focus on Front Office Capabilities and Staff Training
     1. Improve and expand staff training to emphasize upfront copayment and deductible collection, and instill the mentality to "ask for payment" on a regular and consistent basis.
     2. Provide effective processes and staff training for a "high account balance collection team."
     3. Build into existing processes the routine electronic verification of insurance eligibility and benefits. Use this process at multiple times throughout the revenue cycle and for pure self-pay accounts. Additionally, check patient Medicaid eligibility on a monthly basis. Expand Payment Options
     4. Enable patients to understand their responsibility and resolve it at any time. Ensure you can accept any common form of payment including cash, debit cards, credit cards, healthcare account cards, checks and e- checks.
     5. Provide automated tools and improve processes to facilitate financial assistance or loans, enable payment plans and provide a process for Presumptive Financial Assistance. Invoice and Payment Protocols
     6. Define and implement separate, unique protocols for the handling of "self-pay after insurance" and pure "self-pay" following the models widely used in plastic surgery and dermatology where there is a mix of insurance and high value self-pay patients.
     7. Stratify pure self-pay patients with specialized attention focused on Medicaid, medical assistance or charity care as early in the revenue cycle as possible. This way, providers can concentrate their efforts on patients who will be more able to make payments, while reducing the effort spent on those who will not pay. Use Technology Systems to Save Time and Money
     8. Where feasible, implement patient financial responsibility estimation software capabilities to support staff/financial counselors. Enable patients to choose their preferred method to satisfy their account and set up payment in advance to automate the process.
     9. Take advantage of automated real-time communication abilities provided by insurance payers.
     10. Focus all revenue cycle decisions on creating a patient-centric focus that increases your ability to receive payment and jointly improve patient satisfaction with the process. New, web-based patient portals enable patients to go online or use their mobile devices to reconcile their healthcare bills, receive alerts when claims are ready to be viewed, pay amounts due and view past payments – all in one digital location, streamlining payments and increasing overall patient satisfaction.

To download the full Boundary Information Group report please visit: www.boundary.net