As reimbursements shrink and value-based payment models take shape, healthcare providers are realizing they must create and sustain a more effective revenue cycle to ensure long-term viability.
After being pushed to the back burner due to electronic health record adoption, meaningful use achievement, ICD-10 migration and other clinical & regulatory initiatives, the revenue cycle is now surfacing as a high priority for organizations that want to maintain a healthy business. To remain competitive, providers must closely evaluate the current state of their revenue cycle and implement improvement opportunities.
This article, the first in a four-part series examining ways to optimize the revenue cycle, focuses in particular on improving patient collections.
Strategies for increasing patient-facing revenue
Historically, patient responsibility has represented about eight percent of the revenue cycle. Now, however, patients are responsible for closer to 30 to 35 percent of their healthcare bill, making them one of the largest payer groups that physicians and hospitals manage. In response to this change, providers must adopt a different way of thinking about patient payment. Consider the following strategies healthcare organizations can leverage to boost patient collections to maintain profitability:
Set the expectation for patient payment
Though the idea of collecting patient payments upfront might be common for some patients, others may not be expecting the healthcare organization to ask for money at the time of service. Thus, organizations need to set this expectation. Although the highest probability of collecting a copay, co-insurance or remaining balance is through a face-to-face conversation when the patient is onsite, organizations can introduce the topic when patients make an appointment, receive a reminder call or exchange emails with the provider.
Place the right people at the front desk
Ironically, in many organizations, the receptionist is the lowest paid employee, and yet, has what may be the most important role in the revenue cycle—collecting patient demographic information and payment. For instance, if this person fails to collect accurate demographic and insurance information up front or collect a patient payment, the rest of the revenue cycle can be damaged. Organizations should train front desk staff to effectively communicate with patients, stressing the importance of gathering accurate demographic information, discussing payment responsibility and collecting payments. In some cases, organizations may choose to incentivize these team members for accuracy and their contributions to successful collections.
Make it easy to pay
Consumers expect multiple ways to pay their bills, and healthcare bills should be no different. In addition to accepting traditional checks, credit cards and kiosk payments, organizations should think about including a 1-800 number on the patient statement that offers automated phone payment or allows the patient to speak with a live attendant who can answer questions and take payment information. Organizations can further simplify things by accepting online payments through their patient portal.
Leverage kiosk technology to collect payment
Similar to checking in at the airport before boarding a flight, some healthcare organizations use kiosks for patient check-in. This technology can streamline the registration process and make it easy for patients to make payments. In addition to updating any health information, the system shows patients their outstanding balance and collects the balance due via credit card.
Request a credit card on file
Because every healthcare encounter is different, it can be challenging to estimate patient responsibility—outside of pre-established copayments—at the start of the patient encounter, especially for patients with high deductible health plans. That leaves organizations asking for money after the insurance company adjudicates the claim and the organization determines patient responsibility—sometimes 30, 60 or 90 days after treatment. By this point, the patient may not feel as compelled to make a payment. In fact, a recent report by McKinsey and Company indicates that individuals prioritize paying their cell phone bill over any medical bills when it comes to the family budget.
One way to overcome this challenge is to request that patients leave a credit card on file when they check-in for their appointment. The organization can then charge the card when patient responsibility is finalized. To allay fears about big-ticket charges, patients can put parameters around the charge amount, authorizing up to a certain figure. For example, a patient may allow the organization to charge up to $250 to the card, but the organization must request additional approval for a higher amount.
Proactively communicate to reduce no-shows
Kept appointments drive the revenue cycle, meaning no-shows and unfilled appointments have a negative financial impact. Communicating with patients frequently and in several ways, such as live or automated phone calls, emails, patient portal messages or text messages, can reduce no-show rates. Organizations can improve patient receptivity to reminders by asking for and using a preferred communication method.
Optimize practice management technology
Many feature-rich systems allow organizations to track missed appointments, patient payments, charge accuracy and so on. By leveraging these features as well as others, organizations can monitor trends and shifts in payment to understand how successful the organization is in collecting from patients.
One step in a multifaceted approach
Revenue-driving practices such as engaging in a proactive dialogue with the patient early and often and making it easy for the patient to pay go a long way in supporting a stronger revenue cycle. However, improving patient payment is just one aspect of the total picture.
Part two of this series explores several payer-facing strategies that can further improve cash flow and the bottom line.
Monte Sandler is the executive vice president of revenue cycle management services at NextGen Healthcare.