While healthcare payments from patients and payers are expected to reach as much as $5 trillion per year by 2022, more than 30 percent of those dollars are purported to be wasted due to “inefficient, disjointed payment processing and costs associated with paper-based billing and administrative processes,” according to an InstaMed report published in May 2015.
A quick look at some of the key findings of that 2014 study reveal why.
Providers
- 72 percent of providers said that it took more than one month to collect from a consumer.
- 75 percent of providers indicated that they consistently mailed more than one paper statement to collect a consumer payment.
- 60 percent of providers said that they collected at least some money due at the point of service for the majority of their consumer visits.
- When they did not collect at the point of service, 35 percent said that it was due to uncertainty of the amount due and 35 percent said that it was due to consumer resistance to pay.
Payers
- 33 percent of payers indicated that they did not currently meet the January 2014 ERA/EFT mandate of the ACA requirements.
- Of the payers that offered ERA/EFT to their providers in 2014, 58 percent indicated that less than half of their providers accepted EFT payments and 75 percent indicated that less than half of their providers accepted ERA.
- When asked for the primary reason why providers did not accept ERA/EFT in 2014, 25 percent indicated that it was due to a lack of the necessary tools or technology.
Patients
- 63 percent of consumers said that they did not know their payment responsibility prior to a provider visit.
- Only 10 percent of consumers said that they received their healthcare bills via email in 2014.
- 93 percent of consumers indicated that they would pay online through their provider or health plan website and 46 percent indicated that they would pay online through their bank’s bill pay portal if given the option.
- 42 percent of consumers were very confused by bills from their providers.
- 47 percent of consumers were very confused by the explanation of benefits (EOB) they received from their payer.
What Should You Do?
Thankfully, many of the underlying problems causing so much waste in the healthcare payment process have solutions providers can do something about. Based on the above findings, here are a few suggestions to improve the efficiency and reduce waste in collecting payments.
1. Be proactive about your payment process and expectations on first contact with patients. Post your policies and provide a copy to patients.
2. Inform patients before the service what their costs will be.
- Verify eligibility for patients with insurance.
- Estimate the cost of services, and collect copayments, coinsurances, and deductibles upfront if you are an office-based practice.
- If you are a hospital-based practice, talk with the facilities you work with about implementing these protocols, too.
- Use one of many online electronic eligibility verification solutions to quickly compile this information on patients from various payer networks. Some insurance networks also offer their own free online verification systems.
- If a patient does not have insurance, discuss payment arrangements before the service is provided, especially for patients who may need to set up payment plans, receive financial hardship discounts, or apply for Medicaid or other income-based health coverage (i.e. the Healthy Indiana Plan).
3. If a patient has a balance from a previous service, require payment or set up payment arrangements before the next service is provided.
4. Make it easy for patients to pay you.
- Accept payments in as many forms as possible in your office and online.
- When you send statements, make sure they are in everyday language that patients can understand (not just diagnosis, procedure, or other internal codes that mean nothing to patients).
- Give patients the option to receive statements by email if possible.
- Offer online payment portals (with mobile capability if possible) with the option to pay with a credit card, bank transfer, or other forms of payment (like Paypal or Apple Pay).
- Provide payment plan options, and when possible, allow patients to set up automatic payments through your payment portal.
- When automatic payments are not an option, send monthly reminders when payments are due.
5. Make it easy to refund patients who overpay. Even with your staff’s best effort to estimate charges and anticipate deductibles, if you are collecting payments upfront, occasionally you will need to give some of the money back. Keep patients happy about your payment expectations by establishing refund policies and procedures that are just as efficient.
6. Train your call center staff to help patients navigate insurance explanation of benefits, which can sometimes be hard to understand even for professionals in the industry.
7. Take the time to set up EFT/ERA payments with all payers (or at least all major payers) and train your staff to process these electronic payments and denials.
The payment trends in healthcare don’t have to be the norm in your practice. Explore these and other ways today to streamline your collection processes.
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