Getting paid for medical services has always been hard work. For years, healthcare organizations have devoted a multitude of staff resources to collecting reimbursement from payers in the most expedient and efficient way possible, from carefully scrubbing claims prior to their submission to validating reimbursement once payment is received.
And while these strategies are still very critical to the bottom line, providers now face an even more daunting task—capturing revenue from patients. As enrollment in high-deductible, consumer-directed health plans continues to soar, patients now shoulder a greater portion of financial responsibility for their care and are projected to comprise a whopping 30 percent of a provider’s revenue sources by 2012.
Despite this shift, few providers are adequately equipped to collect patient balances, putting them at serious risk for payment delays, sluggish cash flow and patient bad debt. In fact, recent research from McKinsey Quarterly reveals that consumer bad debt resulted in more than $65 billion in uncollected revenues in 2010. So how can providers revamp their existing patient billing and collections processes for increased revenue?
For starters, many leading-edge healthcare organizations are embracing the power of technology to deliver accurate estimates of a patient’s out-of-pocket obligations at or before the time of service. By verifying a patient’s eligibility and benefits status in real time and incorporating the relevant CPT codes to determine insurance allowables, providers can then apply applicable deductibles, co-insurance and other patient responsibilities to determine the patient’s financial responsibility.
These upfront estimates not only boost time-of-service collections, but they also establish a strong foundation on which to build a comprehensive patient financial counseling program that includes a number of innovative, retail-based approaches, such as:
- Delivering patient-friendly statements. With the wealth of changes to insurance coverage in recent years, many patients are unsure of exactly what their policy covers and how it works. Providing billing statements that clearly define the patient’s policy and how it impacts the final bill takes the guesswork out of the process and helps to expedite payment.
- Gauging a patient’s propensity to pay. No two patients are alike. And neither is their likelihood to pay medical bills. By conducting a soft medical credit check prior to the time of service, healthcare providers can customize payment policies to reflect the unique situation of individual patients.
- Verifying self-pay patients. Many patients may unknowingly have Medicaid coverage, and it’s often the quickest way to secure payment. By electronically matching self-pay patients against Medicaid databases, providers can easily re-classify these patient accounts and successfully submit claims.
- Accepting credit and debit payments. Virtually every service provider—from taxi drivers to fast food restaurants—accepts credit and debit cards these days, and patients expect the same from their healthcare providers. Even with any associated fees, it still costs considerably less than chasing down past due balances.
- Offering payment plans. Flexible options like recurring payment plans allow patients to meet their financial obligations in a way that conforms to their budget. They also let healthcare providers get payment in the door more quickly and efficiently than waiting for one lump sum payment.
The bottom line? Even though prevailing wisdom suggests patients either can’t afford to pay their medical bills or don’t want to, the reality is that many of them are frustrated by the confusing and complicated process that making these payments entails. By leveraging technology to promote more open communication with patients and setting clearer financial expectations prior to service, healthcare providers can boost collections, drive revenue and optimize their financial performance, while enhancing the patient-provider relationship.
Tom Stampiglia is CEO of MPV.