Patients are footing more of their health care bill these days. So it's more important than ever to collect as much as you can at the time of service.
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Patients are footing more of their health care bill these days. So it's more important than ever to collect as much as you can at the time of service.
To boost your income, teach your staff to ask patients, "How would you like to pay your bill today? Credit card, check, or cash?"
Notice that the question isn't "Will you pay your bill today?" or "Can you pay your bill today?" By beginning with "how," you tell the patient that you assume immediate payment. On the spot.
And why not?
Money owed by patients is commanding increased attention for another reason: There's more of this money to collect. In 1999, cash from patients represented 10 percent of physicians' gross income. But in response to rising insurance premiums, many employers are forcing employees to assume an even bigger share of health care costs through higher copays, deductibles, and coinsurance obligations.
"Copays that used to be $5 to $15 are now $15 to $25," says Sharol Carlson, practice manager of Liberty (MO) Orthopedic Associates. Copays as high as $30which nearly cover the cost of an office visitare becoming more common. Even a seemingly small copay hike is nothing to sneeze at; 15 patients a day who each owe a $10 copay represent $39,000 in annual revenue. Jack up the copay by $5 and you're looking at $58,500.
Increasingly sophisticated practice management software and real-time electronic connectivity to payers are making it easier to know exactly how much a patient owes when he's talking to the cashier.* With one glance at a computer screen, a staffer can say, "You haven't met your deductible, so you owe the full $50"; or, "The insurance will pay $45 on today's visit. Your share is $15."
But technology alone isn't the answer to higher in-office collections. Staffers must be trained to ask patientspleasantlyto pay up. And doctors must get over qualms about employees operating like Wal-Mart checkout clerks.
The first step in getting serious about cash collections is setting up your office to accept credit and debit cards (see "Most doctors swipe plasticand for good reasons"). You can't count on patients having a checkbook or a $20 bill in their pocket for a copay, but they probably have plastic on them.
Next, you need to write and distribute an office policy indicating that patients are expected to pay their portion of medical bills at the time of service.
Then sell staffers on the importance of implementing the policy. "I told my people that we had nothing to apologize for," says Sherry Dorsey, executive administrator for HealthPoint Medical Group in Tampa. "Just as everyone is expected to pay at the grocery store, the doctor is owed this money; he earned it."
Practice management consultant Julia Hook in Seal Beach, CA, offers another talking point: "Bring up the employees' own paychecks. If they want to be paid every month, they need to collect what's due the practice."
Use role-playing and suggested dialogue to train staffers in the art of point-of-service collection. When asking for money, they should be matter-of-fact and assertive, but never uncivil or threatening. Also, stress the need to be compassionate and flexible. A patient in severe pain doesn't need to be bothered about a $10 copay.
It's critical to set a measurable goal for on-site collections, and track your progress toward it. Copays especially lend themselves to this charting. You may not know what a patient owes in terms of a deductible or coinsurance for a given visit until you receive an explanation of benefits from an insurer. Copays, however, are cut-and-dried.
"If you had 20 patients yesterday who owed a total of $300 in copays, find out how many paid, and what percentage of the $300 was collected," says practice management consultant Geoffrey T. Anders, president of The Health Care Group in Plymouth Meeting, PA. "When you measure something, and let employees know you're measuring it, performance improves."
Don't forget to combine measurable goals with employee incentives. That's what Sherry Dorsey did at the 50-physician HealthPoint Medical Group and its satellite offices in 1999. Before then, the copay collection rate across the group was inconsistent. Some sites garnered as few as four of 10 copays, while others nailed nine out of 10. "I figured if some sites could reach 90 percent, they all could," says Dorsey.
Employees and doctors at the HealthPoint office with the highest collection rate each month received a pair of movie tickets along with popcorn and soda coupons. Prizes cost HealthPoint $3,000 in the first year of the campaign, but yielded a phenomenal $200,000 in added revenue.
HealthPoint doesn't spend as much money on incentives these days, partly because peak performance is getting to be routine. The group collects on average 97 percent of copays. Some offices post perfect scores.
How well employees perform depends partly on whether doctors champion time-of-service payment. The worst thing they can do is send patients a conflicting message. "If a patient asks the doctor, 'Do I really have to pay today?' the doctor needs to say Yes," says Geoffrey Anders.
It takes more than a sign in the waiting room to move to a same-day payment policy. As soon as your practice formally decides to ask patients to pay at the time of service, send a letter to every patient announcing this change. Explain why the policy is not only fitting, but in their best interests:
Payment at time of service is the norm in business.
By reducing the number of patient invoices, payment at time of service keeps practice costs down.
Insurance contracts obligate patients to make copays and doctors to collect them.
You can deploy these same arguments to parry excuses you hear from patients in the office.
Your payment policy and its rationale should appear in brochures for new patients, on your practice Web site, and even on recorded telephone messages. Staffers at the Family Wellness Center in Vancouver, WA, make sure patients read the fine print. New patients there must initial each provision of the group's policy, including the necessity of same-day copays, to indicate that they reviewed it.
When a patient calls to make an appointment, your staff has an opportunity not only to reiterate the payment policy, but to indicate what he'll owe. That's done by scoping out his insurance status during the telephone call.
Is the patient a Medicare recipient who lacks secondary insurance? Remind him that he should be ready to pay the 20 percent coinsurance portion of the fee allowed by Medicare. Is the patient still covered by XYZ Health Plan, which doesn't pay for the physical he's going to receive? Inform him that he'll be expected to pay the entire charge that day.
Now the patient is in the office. You face a burning questionshould you collect a copay before the visit, or afterward? Primary Care Medical Center, a seven-doctor practice in Murray, KY, switched from the back end to the front and saw copay collection rise from just under 80 percent to more than 90 percent. "It was too easy for patients in the old days to leave without stopping at the checkout window," says chief financial officer Sarah Lovett.
However, several satellite offices of HealthPoint Medical Group collect copays after the visit and garner more than 95 percent of them. So the front-end approach isn't a hands-down winner. And collecting after the visit has this advantagethe patient enjoys more privacy talking money at the checkout window than at the receptionist's desk. And if an argument ensues, it doesn't create a waiting room spectacle.
Even practices that are zealous about time-of-service collections encounter patients who can't produce a credit card, check, or greenbacks. Don't resign yourself to mailing them an invoice, says consultant Julia Hook. Instead, hand them a self-addressed envelope and tell them to mail in the payment later that day. If need be, work out a payment plan, even for amounts as small as $20. "Give them two envelopes and ask for $10 this week and $10 next week," says Hook.
Staffers at Rothsville Family Practice in Lititz, PA, dramatize such deadlines by writing them down on the encounter formand making sure the patient notices. "We don't sweat these deadlines, but patients think we're dead serious," says operations manager Marsha Miley.
The office manager of a small practice in the South tells the story of a patient with no health insurance who underwent a physical for a new job. Afterward, he went to a checkout clerk.
"You owe $83 today," the clerk told him.
"I don't have any money on me," he replied.
"All right," said the clerk, smiling. "I'll put the results of your physical in this envelope, and when you have your money, you can come back and get it."
"Wait a minute," the man said. He darted to the waiting room, spoke to a female companion, and seconds later reappeared with the cash.
This medical practice may sound aggressive, but others are even tougher about same-day collection. More and more of them will turn away a patient who fails to meet a copay.
"It's pretty rare, but sometimes we'll cancel a nonurgent appointment if a person doesn't give us a copay," says chief operating officer John Somers at the 85-doctor Bristol Park Medical Group in Santa Ana, CA, which implemented a "copay or go-away" policy last fall. Several offices in HealthPoint Medical Group also took this stance when the practice began bearing down on same-day collections in 1999. "It only has to happen once or twice before everyone in the waiting room knows what to do about copays," says Sherry Dorsey.
Playing hardball like this, though, can embarrass a medical practice as well as a cashless patient. Internist Andrew Siskind, Bristol Park's president, recalls an incident when the group wouldn't give a physical to a man who denied owing a copayand later learned that the patient was right after all.
"From a business perspective, it's absolutely necessary to be assertive about collecting what we're owed," says Siskind. "But as a physician, I feel uncomfortable with turning people away over co-pays."
Such aggressive collection tactics, in fact, bump up against the Code of Medical Ethics published by the American Medical Association. Take the case of the fellow who had to pay up before he received the results of his physical. The AMA ethics code indicates that "medical reports should not be withheld because of an unpaid bill for medical services."
Likewise, the code recommends that doctors waive or forgive copays if they otherwise would prevent a patient with a financial hardship from receiving needed care. True, someone who forgets to bring a checkbook, credit card, or cash to the doctor's office might be careless or inconsiderate rather than broke. But refusing to see even this sort of patient could put you on ethical thin ice, says New Orleans endocrinologist Frank Riddick, chair of the AMA's Council on Ethical and Judicial Affairs. "You run the risk of impairing access to care, quality of care, and continuity of care," says Riddick. "I think it would be dreadful public relations, too."
Consultant Geoffrey Anders wonders whether groups that take a hard line on copays might risk incurring the charge of patient abandonment if they refuse to see a regular patient. "They're pushing the envelope," says Anders.
Groups like Bristol Park stress that they relax their copay policy when necessary. "We wouldn't turn away a patient who was really sick," says John Somers. (Of course, such a policy raises two questions: What qualifies as "really sick," and who exactly makes that determination?) Somers recalls one employee who dug into her purse to cover two copays so patients could keep their appointments. "They came back with the money the same day."
Similar flexibility is apparent at the Family Wellness Center in Vancouver, WA. Last year, it started charging patients an $8 penalty if it had to mail them an invoice for a delinquent copay. However, practice administrator Cathy Bolt-Jones says that if patients mail in their copay within 10 days, they won't be penalized. And first-time offenders who get the invoice can usually wrangle a writeoff. "The purpose isn't to generate revenue, but to educate patients," says Bolt-Jones.
By all accounts, patients are learning to pay at the time of service, and without much grumbling.
"We thought patients would hang us by our toenails when we started asking for copays up front," says Sarah Lovett at Primary Care Medical Center. "But they haven't objected."
*See "Claims in, approvals outin seconds," July 9, 2001.
Does your practice accept credit and debit cards from patients? If it doesn't, you're at a competitive disadvantage.
Based on estimates from MasterCard International and Visa USA, between 50 and 80 percent of physicians accept plastic, with doctors in group practices more likely to do so. And patients increasingly are pulling out cards at the checkout counter. They pay approximately 20 percent of out-of-pocket physician expenses that way, up from 10 percent in 1995, according to MasterCard.
Plastic confers many benefits. It eliminates embarrassment for patientsthey don't have to sheepishly report that they have only $5.36 on them. Then there's the issue of expediency. A patient can give your cashier a credit card number over the phone or through the mail. With a patient's permission, practices can automatically bill a card for deductibles, coinsurance, and other balances after the time of service, when an insurance company has sorted out who owes what. You don't have to worry about dunning the patient again. And you get your money in a matter of days.
Businesses have traditionally relied on banks to process card transactions through a so-called merchant's account. Banks charge a fee of 2 to 3 percent for each transaction and often an additional fee of 25 cents or so. You can snag lower fees by turning your card processing over to a credit union or a wholesaler such as Costco, which advertises a 1.53 percent fee plus 21 cents per transaction. Knowing such bargains exist can even help you negotiate a better deal with a bank, says Julia Hook, a practice management consultant in Seal Beach, CA.
Don't let fees discourage you from accepting plastic, though. What you'd pay a bank for processing a $20 copay is about the cost of mailing an invoiceand you're assured of payment.
You'll need a "swipe" machine and receipt printer for card transactions. Banks sometimes throw in a swipe machine for free, says Hook. If you have to pay for one, count on spending $200 or more. A printer runs another $200 to $300.
How do you know whether the patient has met his deductible, thereby reducing his out-of-pocket expense? Even if you ask the health plan, you may not get the right answer, because the patient may have paid for services that the plan doesn't know about yet. Some practices, for fear of having to refund money, never bill for a deductibleor coinsurance, for that matteruntil they hear what the insurance company will pay on a claim.
Not everybody's that cautious, though. The patient may know if he's met his deductible, so go ahead and ask him, says Allan DeKaye. It's also likely, DeKaye and others add, that in the first few months of the year a patient won't have met his deductible. So you might as well take a chance and collect it. This approach is even safer with regular patients in primary care practices, says Geoffrey Anders, because any money that you mistakenly collect can be applied to future claims.
Robert Lowes. Practice Pointers: Don't let dollars walk out the door.