The climate in healthcare collections is rapidly changing. While providers are pressured to increase their margins amid evolving value-based care requirements, the expense of medical care is shifting from insurers to patients. According to Bloomberg, in 2017, almost half of privately insured Americans under age 65 had annual deductibles ranging from $1,300 to $6,550. Furthermore, a Kaiser Health tracking poll found that 43 percent of insured adults said they have difficulty affording their deductibles, while 29 percent have problems paying medical bills.
As out-of-pocket costs and patient liabilities rise, medical practices struggle to get paid for their services: It’s far more difficult to collect from patients than payers. Therefore, it is important for providers to adjust their workflows to collect at the time of service and enable easier, more immediate payment processes for patients. If weeks and months pass without payment, providers lose money due to rising administrative costs.
Other proactive strategies can help providers with complex claims, unpaid bills, and practice profitability. A practice can reinvent its billing approach with improved patient and payer communication, enhanced engagement, and a precedency for system integration.
It’s not only how much, it’s when
For a provider, the true value of a dollar received for services depends on the timing of its collection. According to The Advisory Board Company, providers may be receiving as little as 18 to 34 cents for every dollar billed to those with high-deductible health plans because of additional administrative costs.
When financial responsibility lies with the patient, practices send, on average, 3.3 statements before receiving payment for an outstanding expense, according to Becker’s Hospital CFO Report. Costs of printing and mailing are significant, as are those related to staff time. As much as 42 percent of providers say it typically takes between one and two months to collect payment from a patient, while 35 percent say it takes them even longer, says InstaMed’s 2018 report on trends in healthcare payments.
Create an engaging experience
First and foremost, providing a positive and engaging patient experience is a good practice. Focusing on patient-centered offerings can lower some of the practice’s costs, generate an increase in patient return rates, and lay the foundation for solid collections. Providers can start by creating a self-service culture.
Practices can make it easy for patients to schedule appointments online, and send text and email appointment reminders to reduce no-shows and encourage mobile pre-check-in. Providers want to consider how to simplify the registration process and include a real-time insurance eligibility check as soon as the appointment is made. Many times, claims are identified as having incorrect insurance. With an automated check upfront, providers can reduce these rejections.
Patients should have the opportunity to fill out intake forms online before their visit or through a patient kiosk just before the appointment. This is a good opportunity to collect any outstanding balances and co-payments for the visit.
It’s also important for providers to communicate with the patient if the benefit has been exceeded or the deductible has not been met. Some practices share procedure codes for non-emergency services with patients in advance so that they could confirm the amounts with their plans directly. Consumers for Quality Care found that 83 percent of those surveyed said they want more cost transparency from their providers. For the patient to actually “become the payer,” he or she must be aware of the responsibility and, whenever possible, the amount.
On the health plan side, providers also find that claims scrubbing – proactively identifying and performing corrections for errors in billing codes – is advantageous. The process generates cleaner claims, a reduction in denials, and improved payer communication. By getting it right from the outset—and enabling multiple types of edits to the claim before it is submitted—providers will be more efficient and find greater success with reimbursement.
Streamline payments with technology
To improve upfront collections from patients, practices need to think like retail, not healthcare businesses. It’s all about offering customized, web-based and on-demand services. While patients want easy access to online bill pay, they are not always given that opportunity. It’s reported that while 44 percent of consumers receive household bills electronically, only 18 percent get medical bills that way. Patients want multiple ways to pay, and for transactions to be seamless. They also benefit from notifications regarding when payments are due and simple online access to view their balance.
To optimize efficiency, automating as many steps as possible within the practice’s integrated clinical and administrative workflow will both save staff hours and help avoid unwanted surprises in the form of denials, ineligibility, or larger than expected patient responsibility. This includes automating demographic and health plan verification checks, using claims scrubbing technology, and incorporating patient self-service applications, such as portal functionality, E-statements, digital communication access points, and integrated credit card payments.
Other worthwhile tactics include demographic update requests and financial responsibility notifications during—or in addition to—an appointment reminder call. A friendly phone call would include addressing a balance or co-payment due, perhaps with an invitation to pay securely over the phone, put a credit card on file, or discuss a flexible payment plan. Providers can also utilize analytics to identify patient propensity-to-pay behavior, tailoring its strategies for collection calls.
There will always be a need for billing experts in the practice; some claims are far too complex, including in certain specialties such as orthopedics and oncology, or in worker compensation and motor vehicle accident claims. Understanding the practice’s billing specifics and typical workflows and applying technology to automate a large portion of them eases the burden on the practice. However, practices should shift the mindset toward collecting patient responsibility at the time of service to optimize their collections, now and in the future. To make this attainable, providers must elevate the patient experience and remain in touch—consistently and through multiple channels—during the entire patient health journey, not just when patients are in the office.
Naveen Sarabu is vice president of product management at AdvancedMD.