Organizations of all sizes are struggling with skyrocketing healthcare costs, burdened in part by employers shifting to consumer-directed health plans (CDHP), which include higher medical deductibles and a bigger share of employee payment responsibility. The result of this self-pay shift is that many patients can't (or won't) pay for healthcare without employer subsidies. Research indicates that consumers at all income levels are more likely to pay for their mortgages, insurance, loans, utilities, cable TV, Internet, lawn care and newspapers before paying their healthcare bills. That's a growing problem for providers, yet there are ways to offset these challenging self-pay trends.
The following are 10 ways providers can improve self-pay collection and communication at all three stages of patient contact: pre-service, point-of-service, and post-service.
1. Stratify payment potential
One study found as much as 31 percent of self-pay revenue written off to bad-debt collection actually met provider charity-eligibility guidelines.1 The right technology can make it easy for front-line agents to conduct charity screening interviews as part of the preregistration workflow. This enables quick determination of whether patients should be placed on a financial assistance pathway or patient payment pathway--which can enhance the ability to collect payment for services rendered.
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2. Verify eligibility
For the most complete and accurate eligibility verification, providers need information from both EDI and web-based searches. Real-time queries provide the latest information, while scheduled batch queries provide ongoing checks for changes or updates in patient eligibility and coverage. Together, they enable more accurate bill estimation, better management of patient expectations, and the ability to catch errors and updates quickly. Eligibility verification reduces denials and rework, and it can improve accounts receivable (AR) significantly.
3. Verify patient data and identity
Half of all required billing elements on a claim originate at the point of access, so correct information at registration is vital to an efficient revenue cycle.
4. Estimate patient responsibility
Systems that can help staff calculate a patient's financial obligation for services and his/her ability to pay make it easier to communicate accurate expectations of financial responsibility, collect deposits and set up payment plans. Such clear, accurate communication can improve the likelihood of on-time bill payment--and increase patient satisfaction.
5. Set up and confirm payment plans
Technology and propensity-to-pay scoring systems should be used to create appropriate deposit and payment schedules. You can also take advantage of retail consumer strategies to collect payment, including collecting deposits, assuring that contracts clearly set out payment schedules and expectations, and securely storing credit card data to improve future point-of-service collections.
6. Collect payment
E-cashiering systems can post patient payments directly to the patient accounting system. Organizations that use these systems routinely report collection increases and AR reductions.
7. Advance your point-of-service policies beyond co-pay, fee schedule and flat-rate collections
More complete, credible and defensible estimates can help expand collection activities while providing patients with a more precise understanding of their responsibilities. Again, this can improve both collections and patient satisfaction.
8. Confirm changes before billing
Plan enrollment, data collection, coverage limits and dependent coverage are all subject to change unexpectedly, and constant enrollment changes in governmental plans like Medicare Advantage and Medicaid HMOs will only increase the likelihood of errors and rework. Double-check all to keep final billing from hitting any snags.
9. Make your billing information and process clear and simple for patients
This includes easy-to-read statements that improve patient satisfaction and increase willingness to pay earlier in the revenue cycle; consolidating family payment information to help the guarantor better manage their account; consolidating bills from the lab, physician and hospital, making the bill easier to understand; offering online account management that reduces patient billing questions and phone calls, lowers costs, improves patient satisfaction and accelerates post-service payment collection; and offering online payment plans, which lower self-pay AR and reduce processing costs by as much as $10 per transaction.
10. Improve collections efficiency
Obviously, it costs significantly less to collect from a large insurer with millions of patients than to collect from each individual patient. On average, consumers pay more than twice as slowly as all payers except Medicaid. This lag is why many providers find it more effective, efficient and profitable to outsource all self-pay accounts for maximum collection potential.
Improving self-pay strategies through all points of service clearly will deliver benefits. But a thorough performance analysis can take results to a new level. Drilling into self-pay data can help identify trends and better understand which patients are most likely to pay; which physicians bring the highest--and the lowest--yield patients; which ZIP codes' patients tend to pay bills by the second statement; and which referring doctors' patients have the highest propensity to pay.
Options and Opportunities
The rise in self-pay receivables is a significant issue for hospital financial performance, with receivables growing faster than patient revenue. Estimating the cost of services before and at the point-of-service, as well as providing an efficient self-pay process, can help make it significantly easier for patients to pay outstanding balances.
Still, development and implementation of these essential functions and processes can be extremely time-consuming, requiring more than most hospital administration teams can afford to commit. The right outsourcing group should be able to support the process as an extension of the hospital's business office, with extensive knowledge on optimizing self-pay account resolution. With the right solution in place at every stage of patient contact, higher levels of patient satisfaction and faster payment recovery should follow. Add the ability to identify and analyze important trends, and the healthcare organization's performance should improve significantly.
1. Ledue, C. Study: 31 percent of patient bad debt misclassified, should be charity. Healthcare Finance News. http://www.healthcarefinancenews.com/news/study-31-percent-patient-bad-d....
About the Author:
Ken Carr, Vice President, Revenue Cycle Management at Change Healthcare
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