Remember the revenue cycle of the 90s? The typical patient made an appointment, showed up, received treatment and possibly made a modest co-payment. Financially speaking that was the story’s end for too many patients. Consequently, the bulk of the practice’s revenue cycle workload addressed claims management.
Today, however, is an all-too-different scenario — and many practices need to help patients make the adjustment.
According to America's Health Insurance Plans (AHIP) Center for Policy and Research, the number of people with health savings accounts and high-deductible health plans rose to nearly 17.4 million this year. With patients shouldering more of our nation’s rising care costs in the form of higher deductibles and co-payments and in a slowly recovering economy, medical bills compete with a long list of other financial responsibilities.
These factors add up to a more challenging collections scenario, namely because patients need more education regarding their financial responsibility as well as more options for making payments. But here’s the silver lining: 52 percent of patients are willing to pay something at the point of care — they just need to know an estimate of the cost .
Regardless of whether you have a patient portal, you can capitalize on this trend to establish early and ongoing communications regarding financial responsibility. With a proactive strategy that engages patients at all points of service, as explained below, you can set expectations and ultimately both increase and accelerate patient payment.
Step 1: Establish expectations
With patient financial responsibility on the rise, it’s important to establish expectations in regard to when patients will pay and how much they’ll owe. The newly insured under the Affordable Care Act may not be used to the inner workings of health insurance. The formerly insured also benefit because they’re coping with rising payment responsibility. Removing any element of surprise will help you collect, and if done tactfully and matter-of-factly, will be appreciated by patients.
These discussions require a credible estimate early in the process. While many practices elect to provide estimates at point of service, it’s even better to perform this task before service is rendered. That way, staff can begin setting expectations during a pre-service call such as the appointment confirmation. If this seems foreign to staff, train them to present your new payment policy and provide verbiage that stresses the positive: You’re providing more upfront information so patients can be more financially prepared.
Also, leveraging technology to automate eligibility, verification and estimation can alleviate this burden from busy practice staff and give them more confidence in the estimate. Then, upon the patient's arrival for the appointment, you can ask him or her to sign the estimate and provide payment authorization on a credit card up to a specific amount. If the patient is unable to authorize payment for the entire amount, you can initiate discussions regarding payment plans. Taking this step prior to rendering services establishes the expectation for patient payment and can ultimately accelerate collections.
Step 2: Borrow from successful payment models
Fiserv’s Sixth Annual Billing Household Survey shows that 74 percent of U.S. households pay bills online. Eighty-three percent use two or more bill payment methods such as auto-debit, online and mobile phone. While physician practices don’t need all the bells and whistles offered by industries such as utilities and banking, they can yield great results by leveraging the technology preferred by consumers.
Providing online bill payment and e-statements can facilitate payment simply because it’s the method of choice for an overwhelming number of Americans. By combining consumer-friendly options with proactive discussions about financial responsibility, you’re making payment easier and more convenient for patients — an effort they’ll appreciate as they cope with higher care costs.
Step 3: Stay engaged through final payment
If employer-sponsored health insurance premiums continue to grow at the average annual rate from 2003-2011, the average family premium will rise to $24,740 by 2020. The Affordable Care Act currently caps out-of-pocket costs at $6,350 for individuals and $12,700 for a family. Whether your patient mix is primarily employer-insured or insured through ACA legislation, your patients likely have rising post-service balances.
Post-service dollars are notoriously difficult to collect, but by maintaining an open dialogue with patients, you can ensure that their financial responsibility — and the quality care they received at your practice — stay top-of-mind. If patients cannot pay in full at the point of service, online options such as email reminders and recurring payment plans can help.
Changing patient behavior
Forty percent of Americans have medical debt. This statistic jumps to 60 percent if the patient has been uninsured, according to the Healthcare Financial Management Association (HFMA). As patient payment responsibility increases, the price of leaving processes unchanged is high for practices. But by discussing financial obligations with patients as soon as possible and using technology to highlight outstanding balances, you can not only improve collections but also the patient experience.
Jeff Wood is vice president, product management at Navicure, a billing and payment solutions provider.