Even with plummeting uninsured rates, Americans continue to bear the brunt of rising medical costs. An article in Sunday’s LA Times highlights findings from a New York think tank, Commonwealth Fund, that show from 2003 to 2013, work-based insurance premiums rose three times faster than wages and deductibles grew by 150 percent.
Many Americans are one medical emergency away from insurmountable medical debt, which means emergency medicine practices are always treating patients who may or may not be able to pay, even if they are insured.
Calculating Zero Payment Rates
One way to understand how patients who pay nothing affect your medical practice is to track your zero payment rates. You should calculate these metrics on earlier dates of service where claims have had time to be fully adjudicated—including any bad debt adjustments or placements with a collection agency. Then, begin by looking at the percentage of total visits for which absolutely no payment was made.
To further delve into the patient payment challenges for your practice, consider analyzing these data at each location you serve, as well as dividing the data between patients who are insured and patients who are not.
While most physicians, especially emergency medicine physicians, expect a high percentage of zero payments among uninsured patients, you may be surprised at the number of your insured patients who also make no payment—nor have any payments made on their behalf by their insurer. On further investigation, these patients likely will fall into the high deductible category. You may also uncover a payment problem with a specific payer.
For that reason, take your analysis one step further and calculate your zero payment rates for individual primary insurers. As well, tracking this data from month to month may reveal that the problem is worse in the early months of the year when deductibles haven’t been met. Or surprisingly, you may find the opposite to be true. Drilling down deeper into the data may help you uncover why.
Once you have the data, what can you do with it to enhance your practice management and maybe even improve your bottom line?
- Allow the data to help you prepare for conversations or negotiations with hospital administrators. Maybe now is the time for the hospital to begin collecting copayments at time of service. Perhaps the information will help support your decision to not participate with a specific payer the hospital participates with. This data may also help the hospital rethink their financial hardship policies when they see the number of patients who never pay you.
- Use the data to negotiate with insurance companies and other payers. Showing an insurer that their members are not paying you when balances are applied to their deductible may provide leverage to negotiate higher rates for services. Masking the data to show one payer how more of their members are paying nothing compared to other payers may also help your cause.
- Let the data guide your own practice management. Knowing more about your patients’ history of not paying balances can guide the development of your own collection practices, hardship policies, and collection agency placement guidelines.
Interested in learning more about tracking your zero payment rates? Contact CIPROMS today.
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