Next in our Getting Paid in 2018 series: Patient Collections. The decision to remain independent is grounded in nurturing cherished relationships with patients. These connections also are key ingredients to success in managing the revenue cycle. Large health systems, hospitals and medical practices struggle at times with today’s shift towards consumer-directed healthcare. For the independent practice, successful patient collections is bolstered by a framework of interpersonal relationships that keep patients compliant—and keep them coming back.
However, given the reliance on patient payments, managing the revenue cycle is getting more difficult every year. A study from the accounting firm Crowe Howarth found that self-pay patients generally compensate only 6.06% on the dollar while the amount of payments after insurance from patients with coverage was a similarly dismal 15.51% (Crowe Horwath). The timeframe to capture even these partial payments is narrow; a report by the payment clearinghouse Instamed reveals that 73% of providers reported that it takes one month or longer, on average, to collect payment from a patient. And, for many practices, one month is considered a positive outcome — often, the collection process drags on for many months.
Ratcheting up the stakes is the trend for more patients to hold high-deductible plans, and for deductibles to be climbing higher than ever. The average annual deductible for an individual policy available through the Affordable Care Act (ACA) is reported to be $4,328, reaching to $8,352 for families (eHealth). While high deductibles are a widely recognized characteristic of ACA marketplace plans, deductibles in the commercial, non-ACA market show a similar upward trajectory. The average single deductible amount (among privately insured patients facing deductibles) increased from $991 to $1,505 in just six years, largely driven by a nationwide trend of greater enrollments in high-deductible health plans. Looking at this trend from another perspective, since 2012, the percentage of workers paying for single coverage under an employer-sponsored plan featuring annual deductibles of $1,000 or more grew substantially, from 34% in 2012 to 51% in 2017 (KFF).
Read my white paper, Getting Paid in 2018: What Independent Medical Practices Need to Know to learn more about the issues impacting revenue in the coming year.
In the face of growing patient financial responsibility, medical practices are now looking to their front office staff as managers of point-of-service collections.
Important Patient Collections Skills for Front Office Staff:
1. Knowing how to ask patients for money
It may be as basic as remembering to say: “How would you like to pay?” while making eye contact with the patient and stating his or her name politely but firmly. Don’t let the privacy needs of a small reception area undercut this essential task; in those situations, the employee can record the due amount for the patient to read – or hand the patient a tablet displaying the information.
2. Understanding insurance basics
Collection efforts also hinge on whether employees can interpret insurance cards and eligibility reports from payers, in addition to routinely confirming important patient demographics such as current address and contact info. Employees must be equally adept at computing or accessing accurate current balances, including those already transmitted to a collection agency because bad debt can be reversed and payment applied.
3. Using insurance data
A vital prerequisite to getting paid is the capacity of the practice’s administrative and billing staff to read and understand an explanation of benefits or benefits summary (available from most clearinghouses) and then put that information into context for the patient. These explanations and summaries can help patients understand their coverage, as well as their financial responsibilities for unmet deductibles before they leave the office or schedule the procedure.
4. Allowing (some) flexibility
As appropriate, employees at the point of contact—whether scheduling, greeting or discharging—can inform patients about the payment plan policy. Payment plans must include a measure of flexibility to be successful. For example, the practice should offer bi-monthly installment payments that coincide with its patients’ paycheck cycles. For patients who qualify, extend a financial hardship policy. Writing off a balance for charity should not be done on a whim, however. Set up a policy, vet it with current payer agreements and restrictions, put it in writing and apply it consistently. Some patients may at times need relief from or more room to meet their financial obligations; sincere efforts to offer that respite can produce a grateful, loyal patient who ultimately pays the bill.
With the advance of high-deductible health plans and other trends that are shifting more financial responsibility to patients, maintaining a successful patient collections process has become a must-have skill set for independent practices. Investing in staff training, software automation and process revisions that invigorate collections efforts revitalizes the bottom line and secures the financial future for the practice.
Download the free guide, Getting Paid in 2018: What Independent Medical Practices Need to Learn, for more practice success tips and strategies for the coming year.