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Eligibility determination and the future of patient payments

Determining insurance eligibility and estimating patient payment are two of the most overlooked steps in patient engagement and today’s revenue cycle process. Yet, they’re also arguably two of the simplest steps a provider can take to maximize revenue and profitability.

Despite the potential risks, less than 25 percent of physician practices have systems and processes in place to ensure eligibility and estimate what the patient owes at the time of service. Yet, when you consider that the patient pays $1 out of every $4 in healthcare, and according to McKinsey & Company providers can expect to collect only 50-70 percent of an insured patient’s balance after he or she is treated, cash flow and the very survival of a practice could be at risk. 

With the continued rise of high-deductible health plans and transparency, it’s only a matter of time before all providers are dependent on patient eligibility and estimation services.

Lagging adoption

To date, eligibility determination and patient bill estimation have been optional strategies for many physician practices, but that is certain to change.

In the past, eligibility determination and bill estimation capabilities had offered incomplete information. Determining where patients are within their annual deductible often wasn’t available, which resulted in an inaccurate patient financial picture. Now, real-time verification can determine what is remaining on the policy’s deductible, and patient estimation services can determine what a patient owes based on what the payer has paid historically. With this information in hand, providers can produce an accurate, professional bill at the time of service to spark dialogue about the cost of care and the practice’s payment policy.

Even with real-time technology, providers may hesitate to move forward since office staff and office policies and procedures have not been developed to deal with a ‘retail model’ of healthcare service. Providers should implement both the technology to produce an accurate bill at time of service, and begin training front office staff on how to discuss the payment policy as well as ask for payment during the patient visit.

The industry is clearly moving towards this more retail-minded model. For example, most dental offices have already implemented these types of payment policies, proving that patients can adjust to paying for care before they leave the building.

A retail model may seem like something that providers don’t need to worry about yet, regarding it as coming sometime in the future. But, the reality is that these market trends may already be impacting revenue, cash flow and profitability.

Entering a new era

Eligibility verification and patient bill estimation services are widely available for healthcare organizations, no matter the size. Every physician practice should use them as a key part of their revenue cycle and office workflow. Before patients see a provider, the front office staff can verify eligibility and show them what is owed on their deductible. Then, when the patients checks out, they are prepared to pay for the service rendered before leaving. This process can also lead to policies and procedures for helping patients make partial payments at the time of service and set up payment plans. 

The goal here is simple – if you can have an informed conversation with your patients before they leave the office, your ability to collect improves dramatically.   

Even the most conservative estimates show consumers paying more themselves with the rise of high deductible plans, which translates to unpaid bills for providers. To be frank – for these patients – the first few thousand dollars of their care each year is coming directly out of their pocket. For providers, leveraging technology to manage these changes in today’s marketplace is key to the financial success of an organization.