ASC Communications, Inc.

52 Executive Briefing Sponsored by: Individualized Patient Payment Solutions: ClearGage Increases Access to Care without Putting Providers at Risk I t's a sobering situation: As the number of Americans with high deductible health plans continues to grow, more and more families across the country strain under the burden of medical debt. This is placing an unprecedented and growing burden on healthcare providers as bad debt and patient collection costs skyrocket. Add in the declining patient case rate acceptance, and to survive and thrive in the years to come, providers must embrace a "retail" payments mentality to get paid for healthcare. What's driving the challenge? Several things. Studies show that one-quarter of adults report they or a family member had problems paying medical bills in 2015 and medical expenses remain the leading cause of bankruptcy in the US. Additionally, 69% of patients cite the lack of financing as the reason they delay or decline care, while at the same time, many patients are being declined by third-party financing companies such as CareCredit. 1 When asked, 37% of patients who did not pay their bills cited their provider's lack of financing as the reason. 2 And yet, healthcare providers' reluctance to provide financing is well-founded. Medical offices often struggle to collect from patients, spending valuable time and resources and exposing themselves to regulatory risk when acting as a "bank" instead of healthcare providers. These rules and regulations include the Fair Credit Reporting Act, Fair Debt Collection Practices Act, Truth in Lending Act, Equal Credit Opportunity Act, Graham- Leach Bliley Act, Driver's Privacy Protection Act, etc. There is hope in sight. ClearGage provides a suite of patient communication tools, payments technology, and financial services, all designed to help providers and patients conduct the business of healthcare. Predictive Analytics drives consumer payments It all starts with data and predictive analytics. In healthcare, one size does not fit all. "As a healthcare provider, you are trained to treat each patient's care individually, taking the time to evaluate each patient's signs and symptoms before you recommend a treatment plan. We think financial staff members should apply the same principles to consumer finance and patient payments," says Chip Hunziker, Founder and CEO of ClearGage. "You would never think of treating every patient the same, so why would you treat every patient's financial situation the same?" ClearGage healthcare and consumer finance data analytics allows providers, in most instances before treatment is rendered, to customize and enter a payment agreement with their patient. Today, patients are fully aware that they must pay for a significant portion of their healthcare bill and are demanding price transparency when it comes to healthcare. ClearGage's healthcare data analytics platform calculates the patient's out- of-pocket costs and answers the question of "how much is this going to cost?" ClearCalc™, ClearGage's patient treatment estimator, is a batch or real-time benefits eligibility verification and patient responsibility calculation system, confirming a patient's benefits and estimating what the patient owes prior to the delivery of service or at the time of care. Once the payment amount is estimated, ClearGage conducts a "soft" credit inquiry analyzing the patient's credit history and propensity to pay. This soft credit inquiry will not impact the patient's credit rating and looks much deeper into the patient's financial history and propensity to pay than a traditional FICO- based credit score. ClearGage algorithms rely on over 200 data elements made up of such things as address stability, home ownership, liens, judgements, criminal history, phone and utilities payment history, job stability, education, income estimation and a host of other variables. "With over 53 million or 22% of the US population considered credit invisible and with over 109 million or 44% of the U.S. population with a subprime FICO score, we feel relying on these alternative sources of data gives our clients much more insight into their patient's propensity to pay," opines Hunziker. Individualized and targeted payment plans drive behavior Based on a patient's expected balance and their credit ranking, the patient is offered payment plans targeted to fit within their budget which enables them to receive (and importantly pay for) their care. These targeted payment plans are all facility pre-approved and meet the provider's preference for credit, risk and impact on cash flow. One thing to point out is that all plans are available to all patients and that the system does not discriminate. Patients are offered incentives and rewarded for paying off their balance as soon as possible. Payment arrangements can include: pre-pay or prompt pay discounts; no interest short-term payment plans; and longer term plans with various degrees of 1 Center for Studying Healthsystem Change 2007 2 McKinsey & Company, Revisiting Healthcare Payments, 2010

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