Even as the uninsured rate in the United States dropped to 12.9 percent for 2014’s fourth quarter—the lowest since 2008 when Gallup began measuring it—collecting patient balances continues to irk medical practices, particularly emergency medicine groups.
One reason is the upsurge of consumer driven health plans (CDHP) with their characteristic high deductibles and out-of-pocket costs that create large patient balances, particularly at the beginning of the year. A survey by the national benefits firm Mercer revealed that 88 percent of companies with 20,000 or more employees may offer CDHPs as their group plan by 2017. The sky-rocketing costs associated with these plans often force even insured patients to forego checkups and other necessary care until the situation becomes urgent. Then, those patients arrive at the emergency department with unmet deductibles.
Also, patients continue to be confused about medical bills, especially those patients who are newly insured and faced with the complexities of EOBs, copayments, and other payer-related concepts for the first time. A recent TransUnion Healthcare survey found that 54 percent of insured consumers are either sometimes or always confused by their medical bills. Without understanding the billing process, patients may use all of their available resources to pay the hospital bill, not realizing they also have a balance with physicians. Or patients may incorrectly assume that since they have insurance now, they won’t have any out-of-pocket expenses.
Then there’s the issue of previous medical debt. According to a 2013 Commonwealth Fund survey, in 2012, 75 million Americans were either paying off medical debt or having trouble paying their medical bills, with 80 million Americans skipping care due to cost as a result. When those patients do finally seek medical intervention, it’s often at the emergency department. With few resources left, patients also struggle to pay for new charges incurred.
While the problem of collecting patient balances grows in complexity, the solution also requires a multi-pronged approach. Here are a few suggestions for optimizing your collection of patient balances.
- Have discussions about costs and payment with patients as early as possible in the process. Ideally, those discussions should happen before care is rendered. But if not beforehand, begin contacting patients soon after care, even before they receive statements. If a patient has insurance, contact them as soon as the claim has been adjudicated and you know their remaining balance. CIPROMS uses automated calls that easily connect back to a billing representative to communicate with all self-pay patients and those with patient balances throughout the billing cycle. If your hospital’s protocol includes a billing representing meeting with patients about payment arrangements during registration, see if that discussion can include information about your physician bill as well. Even if balances aren’t collected at the time of service, discussing potential charges and possible means of payment can help overall patient collections. At Thomas Jefferson University Hospitals, a Philadelphia-based academic medical center with 1,020 beds in four primary sites, simply having patients meet with a representative from the finance department before undergoing a scheduled or emergency treatment increased point-of-service collections by 30 percent in one year. They also realized a 40-percent increase in overall patient collections over a the three-month period.
- For self-pay patients, confirm that the patient does not have Medicaid or another insurance option, including secondary insurance. CIPROMS routinely checks Medicaid eligibility for all self-pay patients to be sure that information did not get lost in the shuffle. When possible, provide information to patients or have your staff help them enroll in Medicaid or an insurance exchange plan.
- Ensure making payments is easy for patients. Simplify your statements, allow payments with major credit cards, and offer online payments options, some of which provide automatic payments from a stored credit card. When your staff is talking with a patient who has an outstanding balance, make it your policy to request a credit card payment before they hang up.
- Make patients aware of charity care options to reduce balances to manageable amounts. Know what options are available from the hospital or other outside organizations, as well as making your staff or billing company aware of your own financial hardship policies. With a more manageable balance, patients may be open to establishing payment arrangements.
- Work with your staff or billing company to offer no-interest payment plans. Work with patients to set up reasonable payment amounts, attempting to avoid excessively small payments that will require years to eliminate the balance. Also, provide a coupon book or monthly statement reminders to ensure patients fulfill their commitments.
- Establish a policy for transferring accounts to outside collection agencies when balances are deemed uncollectible. Sometimes, patients just don’t pay regardless of the effort made. In those cases, an outside agency that regularly deals with negligent or delinquent payers may be your best option. But since collection agencies typically charge a percent of collected revenue for their services, be sure your staff is following best practices to collect as much of the balance as possible before transferring the debt.
Collecting patient balances may never be the easiest part of managing your revenue cycle, but it can get easier by acknowledging the complexity and using multiple strategies.
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