Photo of OhioHealth's Deleware Health Center from Facebook.
Health systems are looking to better their accounts receivables process and are employing a host of new methods to make the collections process smoother.
OhioHealth is one of the few in the industry that has begun issuing a single bill from both hospital and physician when the doctor is employed by the hospital.
“We are moving towards a single business office,” said Margaret Schuler, executive director of revenue cycle at the health system. “I’m able to send a single statement to the patient. That will cut down on confusion.”
And when insurance companies deny a claim deeming the procedure not medically necessary, OhioHealth aggressively appeals the case, Schuler said.
“We use clinical information to put that information together,” she said. “If we don’t get paid on those, those are write-offs. We fight hard for those dollars.”
OhioHealth also sorts through claims denied due to coordination of benefits around the primary versus secondary payer.
The fight has paid off in the millions of dollars.
OhioHealth’s final write-off for fiscal 2014 was .10 percent of patient revenue, according to Schuler, amounting to $6 million. The industry standard is 1 to 2 percent.
Bad debt used to represent small portion of revenue and was all but ignored, but the rise of high deductible plans suggests healthcare providers can no longer afford to leave that money on the table.
It’s getting them the information they need to stop worrying about the bill and concentrate on their medical needs.
For example, 2 percent of unpaid gross revenue is considered the industry standard. But OhioHealth is at 1.21 percent, Schuler said.
The organization is aggressive in collecting debt from patients, but it does all it can to prevent the bill from going that far, beginning with giving the patient an estimate of out-of-pocket expenses at registration.
Inpatients are visited by a financial counselor bedside, according to Schuler.
Those without insurance or who can’t pay the high deductible are referred to an interest-free payment plan or assistance program.
Ohio has an expanded Medicaid program, which has helped, Schuler said.
In 2014, five hospitals in the OhioHealth system converted 45 percent of the self-pay population onto Medicaid.
“We were able to convert $216 million for 2014,” she said.
OhioHealth also has its own internal charity program which offers additional discounts.
“There are many ways to get that medical bill paid,” Schuler said.
The Healthcare Financial Management Association recognized OhioHealth as among the 2014 winners of the MAP Award for High Performance in Revenue Cycle.
All of what OhioHealth does is part of what Schuler calls the “secret sauce” to revenue cycle, and relieves the patient of the burdensome question, “’How do I pay for this?’”
Bryon Health CFO Russ Gronewold in Lincoln, Nebraska agrees patients need to be informed up-front of what they can expect to pay, but admits that’s a challenge for the trauma center.
The focus when a patient comes through the door is getting him or her stabilized, he said.
“We focus on the payment once their stable,” he said. “It’s getting them the information they need to stop worrying about the bill and concentrate on their medical needs.”
Bryon Health falls in the median range for collecting payment, he said.
“We do a good steady job,” Gronewold said. “Our price estimate on the front end is one of the areas we’re working on going over the next year.”
The staff also does a good job qualifying patients for financial assistance, he said.
“We are not an aggressive up-front collector,” Gronewold said. “We’re strong on the back-end as far as diligence, aggressive in qualifying people for the charity care program,” which he said is liberal, up to 400 percent of the poverty level.
Bryon uses a regional bank in which every patient automatically qualifies for a loan, he said.
“Patients are worried about the financial, so knowing how they’re going to pay for care relieves them of that burden.”
Both OhioHealth and Bryon deal with bill payment in-house.
“We’ve felt that we’ve done a pretty good job by holding onto those,” Gronewald said.
Other providers find it makes financial sense to farm out that work.
The vendor option
For a fee, vendors such as CarePayment of Lake Oswego, Oregon offer financial management products with zero interest plans to collect bill payment while other companies provide patients with a single medical credit card to consolidate bills.
Baptist Health Care in Florida has been using CarePayment for about a year.
“While we now are primarily using CarePayment when accounts are overdue, we want to make a major shift to offering CarePayment at registration and point of service, which studies show is much more effective,” said Senior Manager Amy Davis.
Baptist Health Care has seen a $4 million increase in the amount of total collections this year, Davis said, from $30 million to $34 million.
Day Kimball Healthcare in Connecticut has used CarePayment for about four years, allowing patients up to 25 months to pay at zero interest.
The amount of bad debt at Day Kimball has been holding flat, even as the number of patients has increased, according to Sarah Ginnetti, director of revenue cycle.
“We’ve not seen that same incremental shift in bad debt,” she said. “It’s prevented bad debt from growing.”
Neither Davis nor Ginnetti gave the cost of the program, but both said the collections it has generated has more than offset the cost.
More than a financial gain, the program is a patient benefit, Ginnetti said.
Patients who can pay their bills think more highly of their providers, and will be more prone to choose the same facility for future care, said CarePayment CEO Craig Hodges.
The program has been around for about 10 years.
“The growth acceleration started two years ago with the advent with the growth in high deductible plans,” he said.
“Now our footprint is 483 provider locations across the country.” Crozer-Keystone Health System partners with CarePayment, offering patients the option to finance medical expenses for up to 25 month at no interest, according to CFO and Senior Vice President Philip Ryan .
“We have seen a strong increase in people paying more out of pocket for medical services, from those with group health insurance to others with high deductible coverage and even senior citizens who can no longer afford a Medicare supplemental plan,” Ryan said. “The bigger impact is when we help patient on the front end. There’s a much higher engagement of payment.”