Is improving your patient payment collections one of your top most priority? If not, you are in big trouble, say experts.
Gone are the days when practices could bank on payers to collect majority of payments for services delivered. Today, it is the age of high-deductible plans wherein patient financial responsibilities have skyrocketed and this is causing severe issues to both patients and providers.
“Today’s high deductibles are tomorrow’s bad debt,” say a recent Moody’s report. This is because, in a large number of cases high-deductible plans are leaving patients with bigger medical bills, which they simply cannot afford to pay. And if the patients don’t end up paying their end of the bargain, hospital’s revenue cycle will be in jeopardy.
The Link Between Deductibles and Bad Debt
As per experts, “One of the biggest reasons of bankruptcy in the US is huge medical bills.” Once patients go down the path of debt, either they opt to forego or delay medical treatment, putting their health at risk. For instance, consider the revelations made by the recent Kaiser Family Foundation and the New York Times report.
As per this report, as much as 20% of insured patients are reportedly having troubles paying for their medical care in the last one year. At a time when, patient co-pays alone account for 20% of a provider’s revenue, such numbers can send shivers down the spine of many providers.
Cost of Collection
Providers efforts to collect on patient self-pay accounts can be aggravated by the amount hospitals must spend in the process. Let’s understand this by the comparing the efforts needed to secure reimbursements from government and commercial payers, and from patients. To secure reimbursement from government and commercial payers, all healthcare practices have to do is simply submit a digital claim and it is no surprise that this process is not resource heavy.
However, when it comes to collecting from patient self-pay accounts, the process gets a bit complicated as it entails additional material costs, stamps, human labor and other expenses. Also, as the account ages in accounts receivable (A/R), the cost to collect will go up by several notches, while the patients’ likelihood of paying falls dramatically.
What’s more, the additional resources that you have to implement to track, manage and pursue patient accounts doesn’t necessarily add up to the value of the account. That is why a strong point-of-service collections strategy is a must to cut costs and improve efficiency farther downstream in the revenue cycle.
Patient self-pay accounts are also known to cause cash-flow issues for hospitals. This is because, average time for receiving reimbursements under Medicare is within 30 days, whereas the average time that patients take is twice as long as payers to fulfill payments. This delay in obtaining reimbursements can badly affect the financial stability of the organization.
Fortunately, there are fundamental debt management strategies that healthcare practices can employ to improve self-pay collections, and these are outlined in the next section.
Strategies for Success
Here is the list of patient collection strategies that you have to implement to keep your business running through the onslaught of revenue threats this year:
1. Implement Appointment-only Scheduling
An appointment-only scheduling structure gives you the liberty to capture and verify necessary patient information ahead of time. Yes, moving to such setup may be difficult for many public health agencies, but it is a vital step that hospitals shouldn’t hesitate to take if they aspire to clean and optimize their collection processes. And the best way to start making this transition is by allowing patients to fix their own appointments using a self-service online scheduling setting.
2. Verify Insurance Prior to the Time of Service
Verifying insurance, a day or two before their scheduled appointment increases your charge-to-collection ratio by manifolds. In addition, it will also give you the liberty to reschedule appointment if there are any issues with the insurance policy.
Opt to use one of the following methods to verify insurance:
- Insurance verification by telephone
- Insurance verification by EMR or billing software utilization
- Insurance verification by online payer resources
Also designate a dedicated resource as your insurance verification specialist, so that he can perform the verification job without any ambiguities or distractions.
3. Collect at Time of Service
Did you know that the probability of collecting reduces by more than 40% as soon as the patient leaves your premises? Hence make sure that you collect coinsurances, co-pays, past due balances and projected deductibles at the time of service. With this regards, it is advisable to implement a well-rounded check-out process, which essentially gives you an additional chance to collect before the patient leaves your office.
4. Capture Data and Measure Performance
The effectiveness of your collection process will be hampered if at any point in the process, the individual with access to information is not accountability for his performance. Hence make sure that there is consistent alignment between access to information and accountability for performance by incorporating appropriate monitoring and reporting metrics.
5. Utilize System Intelligence
EMR and other latest advancements in software have made it possible to automate daily patient collections functions such as eligibility checking. Hence why bear the burden of carrying out these cumbersome tasks in-house. Leverage the advancements in technology to get more time to focus on your core activities.
6. Clean and Submit Accurate Claims
The accuracy of information that is going out is directly proportional to the reimbursement that is coming in. Or in other words, higher the numbers of claims that leave your practice clean the first time, greater will be the financial stability of your practice. Hence make sure that you submit clean claims, which do not need any additional information for processing, the first time.
Every one of these strategies may not be a perfect fix for your practice but putting just a few into place should go a long way in curbing 40% of patient collections that are left on the table every year by hospitals in the US.
Want to know more about latest patient collection trends and how to use their trends to your advantage? Contact an expert healthcare back-office service provider.