1 “the fast and the Furious” Revenue Cycle - 3. 0 (a. k. a“the fast and the Furious” Revenue Cycle (a.k.a.) The Revenue cycle of the future

2 Industry analysis 82% of people say price is the most important factor when making a healthcare purchasing decision* The costliest 1% of patients in the US consume 20% of the nations healthcare* 11-20% of Americans think healthcare is affordable* Percentage of covered workers enrolled in a plan with a deductible of $1000 or more is on the rise* (i.e., 46.0%) 43% of patients in fair or poor health found medical treatment unaffordable** In % of employers are only offering high deductible plans** Source: *Price Waterhouse Copper HRI Consumer Survey 2014 Source: **Money Matters Billing and Payment For A New Health Economy

3 Revenue Cycle of the FutureThree Greatest Sources of Revenue Leakage or Lost Yield Patient Access Guarantor Obligations / Collections Denials Management © Availity, LLC. All rights reserved.

4 Revenue Cycle ManagementBilling and Collections (Safety Net) Coding Clinical Enterprise Registration Front-End Continuous Process Improvement Mid-Cycle Back-End Data Hub Claims Remits Clinical Reallocating processing to the front-end will result in cost reductions and increased yield

5 Revenue Cycle of the FutureMedical Informatics Revenue Cycle becomes the technology-driven, data repository Source for consumer-centered care and care coordination programs Consumer-Focused Revenue cycle will move from rules-based to behavior-based processing Create personalized plans that emphasize quality and affordability Value-Based Reimbursement Systems must support dual-track processing for reimbursements / claims Evolution towards “fee-for-value” Retail Model Move towards a “cash and carry” model where payment is received in advance Opportunity for “peer-to-peer” lending Clinical Revenue Integrity Focus on coding and documentation Basis for establishing reimbursement and risk adjustment factor score Greater Collaboration Sharing across the continuum of care to improve outcomes and reduce costs Partner of the clinical department

6 Providers are facing a perfect stormMassive Shift to FFV with Inadequate Tools or Information Commercial payers and CMS both committing to significant FFV targets over the next 3 years Providers tracking upwards of 100 quality measures, primarily via spreadsheets Accurate coding/HCC capture is essential FFV Administrative Administrative Requirements Reaching a Breaking Point Greater usage of pre-authorizations, referrals, etc., to control utilization of services Increase need of data concerning predictive analytics in a team based care environment Cost-Shifting to the Consumer Approaching $650 billion in annual patient responsibility Increased bad debt expense. Providers must increase yields just to maintain current revenue. Patient Pay Coding Massive Productivity Challenges Projected to result in 40% productivity loss in coding operations Significant impact to cost-to-collect metrics and denial rates Consumerism is Changing the Game and the Necessary Tools to Play Patient experience; mobile; transparency tools; patient payment options… All critical to maintain patient volume Consumerism Consolidation Pressure to Consolidate or Become Employed Limited options to achieve necessary scale, manage risk and make necessary technology purchases

7 Overarching Themes We must simplify the health care consumption experience Consumers will pay more for healthcare Providers will have to collect payments directly from the patients Employer sponsored health insurance will evolve to only high deductible plans with the end game being “defined contribution” We must significantly take down the cost structure – not bend the cost curve. © Availity, LLC. All rights reserved.

8 Approximately $1,800 Today © Availity, LLC. All rights reserved.

9 © Availity, LLC. All rights reserved.

10 CBO JULY 2016

11 WHAT DO CONSUMER’S VALUE?Data shows how most of healthcare’s inflation has resulted from increased administrative spending *2300% increase in U.S. healthcare spending per capita between Source: Heath Care Costs: A Primer, The Henry J. Kaiser Family Foundation

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13 140M Consumers 175M Customers THE CHALLENGE Supply Side PushACO / PCMH / Pop Health Value Based Reimbursement Continued consolidation Patients should value quality the way we define it. 175M Customers Demand Side Pull Employer shift to CDHP then DC Increased economic exposure Innovation in delivery and focus producing solutions that consumers want Fracturing the health care consumption marketplace New players (i.e., Walmart)

14 Revenue Cycle – The New World of ReimbursementsBy 2018, 50% of Medicare Payments will be based on value-based payment models By 2018, 95% of all Medicare Fee-for-Service payments will contain a quality component Utilizing Four Main Programs: Medicare Shared Savings Program Bundled Payments Primary Care Medical Homes Value-Based Purchasing Programs  Five Common Features: Clinical Integration Team-Based Care Financial Risk Self-Governance Physician Leadership

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16 ACA Impact TARGET AREA 2013 2014 2015 Uninsured Rate 41% 17% 13%Under Insured (Deductible / Co-Pay over $2,500) 22% 29% 43% Medicaid Recipient 10% 16% Healthcare Exchange NA 6% 9% Platinum 2% 3% Gold Silver 60% 65% Bronze 21% 19% Source: Kaiser Family Foundation

17 Future State of ACA Target Area 2016 2017 2018 Uninsured Rate 10% 9%4% Under Insured (Deductible / Co-Pay over $2,500) 43% 49% 52% Medicaid Recipient 16% 18% 20% Healthcare Exchange 11% 13% 15% Platinum 5% Gold 17% Silver 67% 69% 70% Bronze 12% 8% Source: Kaiser Family Foundation

18 Percentage of Covered Workers Enrolled in a Plan with a General Annual Deductible of $1,000 or More for Single Coverage, By Firm Size, All Small Firms (3-199 Workers) 70% All Large Firms (200 or More Workers) All Firms 63% 61% 58%* 60% 50% 49% 50% 46% 46% 40% 41% 38% 40% 35%* 34% 31% 39%* 30% 27%* 32% 21%* 22%* 28% 18%* 26% 20% 16% 10% 22%* 12%* 17% 10% 13%* 8% 9% 6% 0% * Estimate is statistically different from estimate for the previous year shown (p<.05). 2011 2012 2013 2014 2015 NOTE: These estimates include workers enrolled in HDHP/SO and other plan types. Average general annual health plan deductible s for PPOs,

19 How Much is too much? Patients are unlikely to pay medical bills that are greater than 5.0% of household income, per The Advisory Board Median household income in the United States is approximately $53,000 suggesting that when out-of-pocket expenses exceed $2,600 guarantor collections become extremely difficult © Availity, LLC. All rights reserved.

20 Provider Strategy: revenue optimizationACHIEVE FOUR OBJECTIVES THREE PRODUCT SUITES THREE CONCEPTS Enhance the Patient Experience Better Manage the Insurance $ Patient Access Pre-Service Clearance Core Claim Mgmt / Scrubber Denial / Contract Management Coding / Clinical Advisory Services Authorizations Payment Plans Patient Statements & Collections Guarantor A/R Management Increase Yield Patient Revenue Management Tackle the Problem of Patient Collections Cost Containment Accomplish Both by Focusing on the Front End Incremental Net Revenue Enhancement Pre-Service Clearance Claim Management

21 Four Key Strategies I. Enhance Patient Experience II. Increase YieldPre-Service Clearance Retail Model Comprehensive Transparency II. Increase Yield Increase Insurance “Yield” (e.g., 88.0% %) Guarantor Recoveries (e.g., 38.0% to 70.0%) Enhanced Denials and Contract Management Services III. Cost Containment Capital Constraints Reduced Productivity (e.g., ICD’10) Increased Automation and Reduce “Cost-of-Rework” IV. Incremental Net Revenue Enhancement Eliminate Revenue “Leakage” Health System Revenue Leakage 3.0% - 5.0% annually Revenue Leakage vs. Revenue Preservation

22 Shifting Focus to Pre-Service ClearanceWhat it means… Shifting the revenue cycle processes’ focus from “post-service” and “point-of-service” to “pre-service” Performing all administrative functions associated with a scheduled appointment for a patient prior to the patient arriving for his/her service Creating a “one stop shop” patient service call center in order to facilitate the patient experience Leveraging technology, particularly mobile, to engage the patient prior to the visit

23 Shifting Focus to Pre-Service Clearance (continued)Why it’s important… Roughly 45% of denials are due to patient access issues Only 40-60% of post-service patient responsibility is never collected Expectation that this individual program/function would increase yield by approximately 3% to 4% Tackles consumerism and patient experience head-on. Separates the patient clinical encounter from the financial clearance process in order for the visit to the provider to be purely clinically related Allows for the conversion of the revenue cycle to a “clinically driven, retail model” Provides for the horizontal integration of functionality across the revenue cycle, which will improve efficiencies, reduce the number of errors, and streamline the back-end process while enhancing the patient experience Provides a mechanism to manage increased volume, due to the evolution of the market to a decentralized ambulatory or outpatient care model

24 Search for Missing/Incorrect InsurancePatient Services + Clinical Revenue Integrity + A/R Management Pre-Service Clearance Perform All Administrative Functions Prior to the Patient Encounter Propensity-to-Pay POS Standalone & Automated Batch Processing Automated Authorizations & Referrals Registration Quality Assurance (RQA) Address Verification & Improvement Online Patient Payments SSN# Verification Automated Workflow Red Flag Alerts Dual Eligibility Review Pre-Registration and Registration Medicaid Eligibility Screening Automated Insurance Verification (primary & secondary) Presumptive Charity Care Benefit Verification by Individual Plan Coordination of Benefits Network Status (patient and provider) Patient Out-of-Pocket Estimates Frequency Edits Medical Necessity Checking Search for Missing/Incorrect Insurance

25 Solution overview – Patient Access automated workflow processPayors Physicians 1) Accurate Estimates based on Patient’s Plan and Historical payments Eligibility & benefits Care gaps Authorizations/referrals Attachments Summaries Claims Remittances Payments 2) Instant Response by Payers for Eligibility & Benefits 3) Patient Registration Staff equipped to collect “appropriate” POS Cash from Patient Admission/ discharge notifications Lab/test results Eligibility & benefits Care gaps Authorizations Attachments Claims Remittances Payments Hospitals 4) “Notice of Admission” to the Payer

26 The intelligence Platform evolution of Technology and capabilities That power the providerBroad range of solutions built on a single, integrated platform Optimized for risk adjustment as an initial priority focus Enabled by a powerful suite of intelligence capabilities Built on a foundation with world-class scale, security, reliability and flexibility 26

27 Competitive DifferentiationInvesting in pre-service automation and services to simultaneously impact insurance and patient revenue yields Leveraging OHP/payer data and networks in the pre-service program and the digital clipboard Using a service model leveraging payer relationships to bridge the gap to full automation of authorizations, referrals and orders Leveraging automation, patient engagement and payer data to empower a unique comprehensive guarantor A/R management offering

28 Appendix

29 Pre-Service Clearance FunctionalityStandalone Point-of-Service Processing Automated Batch Processing Propensity-To-Pay Address Verification and Improvement SSN Search and Verification Segmentation and Scoring Red Flag Alerts Insurance and Benefit Verification (e.g., primary and secondary) Benefit Verification at the Service Type Level Out-of-Network Benefit Verification Provider and Patient Network Status Cascading (e.g., incorrect, missing, uninsured, inactive primary/secondary insurance) Advanced Search Algorithms Coordination of Benefits (e.g., age, dialysis, MSP, Birthday Rule) Dual Eligibility Determination Membership Lists

30 Pre-Service Clearance Functionality (continued)Automated Authorization Management An automated process to submit, obtain and manage the authorization process Complete Authorization Rules Engine by Payor Approximately 80% of the Process – Automated Automated Follow-Up Reconciliation of Authorizations Workflow Driven HIPAA Compliant Comprehensive Pre-Service Clearance Automated Batch Processing (e.g., including eligibility, benefits and demographic verification) Medical Necessity Frequency Edits / Limitations Embedded Management Analytics to Allow Reviews by Individual Physician, Practice, and Department by Service (e.g., Procedure) Performed by Payor.

31 Pre-Service Clearance Functionality (continued)Calculation of “Out-of-Pocket” Estimates Provider based clinics (e.g., two bills, two out-of-pocket amounts and two deductibles) Calculate the value of two commercial insurances “Combined” out-of-pocket amount for recurring accounts Frequency edits or benefit limitations related to services provided or the corresponding utilization limits (e.g., archive search or payor data) Interpretation of modifiers and reduced reimbursement Government payors as secondary payors are not taken into account (e.g., prime paid more) Contract Management System Historical Charges Ability to or fax the out-of-pocket estimate to the patient

32 Pre-Service Clearance Functionality (continued)Comprehensive Guarantor A/R Management Services Functionality Provider based clinics (e.g., two bills, two out-of-pocket amounts and two deductibles) Propensity-to-Pay Address Verification and Improvement SSN # Verification Red Flag Alerts Early-Out Program (e.g., pre-collection) Patient Statements (e.g., paper and electronic) Bad Debt Collection Agency Program Second Placement Agency No Interest Patient Payment Plans Medical Eligibility (e.g., comprehensive sources) Alternate Funding Programs Patient Advocacy and Navigation Automated Presumptive Charity Care Liens/Accidents/Para Legal Collection Optimization Program (e.g., management of third party vendors)