Hospitals and medical practices are facing what I’d call an economic pandemic, spawned by high-deductible health insurance plans (HDHPs) gaining traction as insurance costs continue to rise. In the last 10 years, HDHP enrollment has increased from 4 percent to nearly 25 percent, and deductible amounts for employer offered plans have increased 67 percent in the last five years (Henry J. Kaiser Family Foundation).
As a result, healthcare collections have reached a critical level, with many patients simply unable to afford deductible amounts that can quickly rise into the thousands of dollars. While some have access to credit, many do not. According to a study by Availity, physicians reported that only 56 percent of patients were able to pay the full amount requested during point of service collection efforts, with more consumers maxed out on their credit limits. A SuccessEHS study found that a staggering 79 percent of patient balances that aren’t collected at the point of service will never be paid.
Tools, training, and the following best practices will enable your staff to communicate with patients about financial issues, heading off future collection issues. Patients need to understand that your first priority is providing their continued care, and without payment, your organization’s ability to do so may be compromised.
Before the Patient Visit
Determine Insurance Eligibility & Estimate Financial Responsibility – Before the patient arrives for their scheduled visit, your front office should determine the patient’s active health insurance coverage, terms and conditions, deductibles and copayment options. You will know what will be covered by insurance, how much the insurer will pay, and what your patient is responsible to pay, so you can provide your patient with a clear understanding of their requirements and out-of-pocket expenses.
Another opportunity for front office staff is to contact the patient prior to the scheduled visit to review the estimated patient responsibility. During these conversations, front office staff should attempt to collect the amount due from the patient, or set up a repayment plan.
These approaches not only supports a successful patient collection plan, but also facilitates a timelier, more complete claims handling process.
During & After the Visit
Counsel Patients about Self-Pay Options – The rising cost of health insurance has motivated a high number of people to opt for no insurance, but many younger, healthier people prefer to pay for healthcare as needed. In either case, when patients with an outstanding balance call for an appointment, your staff should ask for a payment of their outstanding balance and let them know they’ll be expected to make an additional payment at their appointment. Having patients sign an agreement to take future funds from their credit card on file is yet another fiscal safeguard.
Consider your overall patient checkout process. A critical part of the process is to have your office staff review any previous payment arrangements that have been made. This will help limit post-visit collection activities.
Handle Collections Internally—for as Long as Possible
While the use of collection agencies for past due amounts may sound like a reasonable course, a recent report by the ACA International stated that medical practices recover less than $14 for every $100 owed once they turn bad debt over to third-party collection agencies. An earnest internal collection effort starts with training your staff to make reminder calls to patients who have outstanding balances and providing a script for them to follow. If a patient has not made progress in trimming their outstanding balance within a predetermined time frame, then need to consider outsourcing its collection.
These practices should improve your cash flow while maintaining good patient relationships and delivering a better experience. The benefits of improvement in upfront payments, increased patient satisfaction, and a reduction of accounts receivable will foster a healthy bottom line so you can continue to keep your patients healthy.