The number of High Deductible Health Plans (HDHPs) and Consumer-Directed Health Plans (CDHPs) in the market continues to increase as patients and employers look for lower monthly premiums and payers aim to place more financial risk on patients.
In 2016, the Kaiser Family Foundation reported that an average of 51 percent of workers were covered by a health plan with an annual deductible over $1,000 for single coverage. This group of individuals had increased by 22 percent since 2009, and this trend continues to rise.1 With high deductible plans, patients are often liable for the entire cost of the payer negotiated rate of their physician visit, and the high out-of-pocket expenses are driving them to make savvier healthcare decisions. Patients desire more financial transparency, access to healthcare costs, and increased communication from their provider. Yet despite patients’ increased financial awareness regarding their obligations, many are still unreliable payers in the market.
To avoid outstanding fees and bad debt, providers must consistently collect on balances owed from patients. There are four steps your practice can take to increase financial transparency for patients, while pursuing balance collections and increasing cash flow:
|1. File Accurate Claims|
Whenever your practice files a claim with a payer, it’s crucial that you ensure complete and accurate data. Claims filed with missing or incorrect information lead to longer processing times, as administrative staff work to identify errors and reprocess the claims. The more time required to file a claim with insurer payer before billing the consumer, the less likely a practice is to collect on the balance owed. For every 30 days an account ages, the likelihood of collecting patient fees decreases by approximately 50 percent.2
Conversely, if claims are filed accurately when first processed, practices can reduce claims processing time, increase cash flow, and improve communication with patients who receive bills in a timely manner. In some cases, filing accurate claims may decrease the total length of time an account is receivable or outstanding by up to two weeks.3 To ensure better claims accuracy in your practice, work with your front desk staff to verify all patient information during the initial patient encounter. Your staff should file copies of insurance and identification cards, verify insurance and coverage, and check that the patient correctly filled out the appropriate forms.4
You can also work with an outside partner who utilizes clearinghouse processes to check claims for correct and accurate information, prior to sending the claim to the payer. This helps catch any additional errors before waiting 30 days to find that the claim has been denied. Delays in claims processing impede the ability to collect fees from patients, so any steps your practice can take to prevent unnecessary delays will help improve the bottom line.
|2. Establish Clear Collection Policies|
Preventing debt from going to collections begins at the front desk. Every patient should be aware of your practice’s collection polices, so that they are prepared to pay their portion of the fee. While 74 percent of consumers are willing and able to make payment arrangements, patients have been conditioned over the years that healthcare billing doesn’t occur on site.5
Retrain patients that they should be prepared to pay their anticipated cost of care upon delivery of service. Staff members often feel uncomfortable asking for payment, but if patients expect to be asked, it becomes much less awkward for all parties.
Begin by updating collection policies to indicate that a patient is responsible for paying his or her copay, deductible, or full visit fee at time of service, in accordance with the patient’s insurance plan. Ensure that each patient receives a written statement of your practice’s policies and acknowledges its receipt with a signature.
You can also use direct mail and digital communications to promote the collections policy or include a copy of the policy in each invoice, e-statement, or follow-up correspondence. An additional method of pursuing collections for high deductible plan patients, is to issue an invoice for the services performed before the patient leaves the office. Include a copy of your collections policy indicating that the bill must be paid within a specified time period (e.g., 30 days).
|3. Offer Multiple Payment Channels|
In the age of credit cards, online payments, and virtual wallets, consumers are increasingly looking for easier methods of paying bills. Across all industries, 93 percent of consumers would prefer to pay online or with a mobile device, if given the option.6 To increase revenue cycle streams, practices should be using at least two or three methods of collecting payments.
If patients find making payments confusing, difficult, or easy to forget, the patients’ fees will end up in collections. To make payment processing easier, determine which payment methods your practice currently employs, and then look for opportunities to implement additional options.
Possible Payment Methods:
- Pay by mail, phone, or online/mobile: Offer the traditional payment methods for your clients, consistently reminding them they can pay online. Consider including a vibrant graphic on all written communication that indicates how a patient can make digital payments. Online payments free up staff and decrease costs, since they require less administrative time than mail or phone payments.
- Flexible payment plans or financing options: Giving patients an option to pay larger balances over an agreed period increases the likelihood the bill will be paid in-full and reduces bad debt.7
- Credit Card on File: Services are available to store patient credit card data so payments can be made directly. Practices can use a credit card on file program to implement automated payments when a balance is above a certain amount. Patient portals with credit card on file functionality also help keep patients apprised of their payment status and previous statements, as well as reduce questions and time-consuming billing calls to the provider’s office or billing company.8
- Guest Pay Options: Online guest pay options are a handy tool for practices because they allow patients to pay their bills online, without log-in credentials. The patient doesn’t need a username or password; they simply enter the information directly from their bill and process their payment. Guest pay is fast and easy, and it eliminates the issue of forgotten passwords or portal access.9
Identify a strategy for incorporating one or more of these payment options to provide increased convenience for your patients.
|4. Train Staff to Pursue Collections|
All staff members should understand the importance of consistently pursuing balance collections. The entire patient encounter must be focused on collections, from before the patient enters the main lobby, until after they leave. According to a 2016 American Hospital Association study, providers collect 50 to 70 percent of small dollar liabilities and only 10 percent of liabilities from self-pay.10 This leaves a large portion of healthcare dollars unclaimed, and as high deductible plans become more prevalent, steps must be taken to increase the number of collected payments.
Train your staff to be proactive in collecting fees and past-due debts. Prior to point of service, your staff should review a patient’s insurance policy and calculate their obligations. During the patient encounter, staff should determine the patient’s willingness to pay either partially or in-full, depending upon their plan. Staff should then outline the various payment methods available to the patient and gently remind them about the amount due. Following the visit, an invoice for any additional costs should be handed directly to the patient, along with a copy of your practice’s collection policy.
Most importantly, staff should actively pursue collections on bad debt, even if the fee has already been transferred to an outside collections agency. Train staff to always recognize when a balance is owed and to politely pursue collections on past-due balances whenever the patient calls or visits the office. This will increase the number of payments from the patients who had not yet received statements, forgot to pay, or were confused by their bills.
Independent practices must adjust to the changes a high-deductible, consumer-driven market presents. To receive timely payments and avoid bad debt, identify the area where your practice could benefit most from revenue cycle improvements. Create a strategic plan and begin working with your staff to implement this new action or policy today.
Today’s independent practices face a host of challenges like those outlined above. More than 2,000 providers across 400 locations in the Mid-Atlantic and Midwest have turned to Continuum Health to improve their fee-for-service and value-based performance. For more information about how we can help you, please email email@example.com or call (856) 782-3300.
1 4 strategies for providers to collect on outstanding patient balances
2 6 tips for improving your self-pay collections strategy
3 4 key ways to improve healthcare revenue cycle management
4 Do you have too many insurance claims over 120 days?
5 Increased Patient Financial Responsbility - The Consumer Payer - Webinar: Alpha II, Timothy Mills
7 Four ways to embrace patient consumerism
8 Continuum's Healthy Revenue Checklist
9 Increased Patient Financial Responsbility - The Consumer Payer - Webinar: Alpha II, Timothy Mills