Healthcare billing and collection: Best practices

There has never been a more critical time for U.S. healthcare providers to ensure they follow best practice guidelines when it comes to billing and payment.

 

A report released in May 2011 by the Department of Health and Human Services found that a massive $49 billion of medical bad debt is amassed every year by uninsured hospital patients. Those findings followed a study by the American Hospital Association where 87 percent of healthcare organizations surveyed reported increased bad debt and charity care as a proportion of total gross revenue.

 

More money per person is spent on healthcare in the US than in any other nation in the world (WHO, May 2009), and as a result of the Affordable Care Act, nearly 20 million newly insured patients will enter the healthcare system by 2014, and will assume increasing responsibility for healthcare payments.

 

With the increased percentage of initial payments being shifted to the patient from traditional payers through high deductible health insurance policies, there is a greater onus on practices and hospitals to collect balances outside their clinics.

 

Healthcare providers can manage their billing and collection processes by following a set of best practice guidelines to help them address this situation cost-effectively.

 

Multiple payment options

One obvious option for a healthcare organization is accepting payments through an online web portal that accepts debit or credit card payments. This ensures fast payment and removes the worry of safeguarding patient data. The web portal is branded with the organization’s name and logo so the patient feels comfortable with paying the bill directly to the facility. Patients can even use their mobile phones for reminder texts and to pay bills.

 

This is a far cry from the “check is in the mail” with all its inherent delays. But even if a patient pays with a check, these are easily converted to electronic checks and processed as ACH transactions. For NSF, where banks currently re-present returned checks for three consecutive days, there are now payment services that can strategically manage the returns by holding checks and presenting them on specific dates that are the most likely to yield a return.

 

For example, a check can be re-presented on strategic days, such as the 1^st or 15^th of the month, rather than successive days, increasing the time frame in which funds can be made available.

 

There are also online debt negotiation solutions that enable patients to negotiate payment online without having to engage with a billing department or collections agency. The system sets up an automated repayment schedule, self-generates reminder emails or auto-dials the customer over the telephone, to ensure re-payments are made on time and funds are collected.

 

Encourage advance payment

Encouraging patients to pay for procedures in advance through pre-funded accounts allows them to plan for payment effectively. This is precisely the sort of customer service that takes the stress out of the payment process for the patient.

 

By offering the patient payment terms over several months through payment from a pre-funded account, the process of settling healthcare bills is simplified for both parties. The patient finds it easier to settle their account and the health provider is spared the costly task of chasing payments.

 

Keep billing costs low

The growing impact of bad debt on the bottom line of healthcare organizations means there is a greater requirement to reduce the cost of servicing payments.

 

This can be difficult for those providers who do not embrace new technology and who still rely on the costly process of mailing out invoices and account statements or accepting payments in the traditional way via checks or bank transactions.

 

By moving to a paperless mode of billing and payments, healthcare organizations can save between 60 percent to 90 percent of their paper and postage costs and achieve a 30 percent reduction in Days Sales Outstanding. And this doesn’t begin to take into account the environmental benefits.

 

Patent driven healthcare

One of the quickest ways to ensure a patient goes elsewhere for healthcare is to compromise the security of their financial information.

 

Taking payment card details over the phone and writing them down so the card information can be hand-keyed into a card swipe carries a huge risk, and could infringe the standards set up to protect the security of card holders' data, as well as leading to heavy fines.

 

A secure online portal protects a patient's financial data and makes it faster and easier for the healthcare provider to process payment. Healthcare organizations can then add other patient services such as allowing them to negotiate payments online and use pre-fund options ­– all of which will help build and strengthen the organization-patient relationship.