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Insurers aren’t the only ones responsible for paying on claims; patients are, by virtue of the way the system is set up, also a “payor.” But the ever-changing claims process can confuse even the most experienced coder or biller. So imagine how patients must feel — particularly when they receive more than one bill for the same episode of care, or if they receive a bill at all. In fact, nearly 50% of patients report they are confused by the bills they receive for medical care. And yet it’s becoming more important than ever to your revenue flow that patients pay, in full and on time. So what’s a busy hospital, practice or facility to do?
Factors driving the increase in self-pay patients
There are two key factors driving an increase in the number of patients who are paying all or part of their healthcare bills out of pocket.
- Healthcare reform
With enrollment on the healthcare exchanges, many patients are opting for high-deductible plans, in order to have lower monthly premiums. This is also a trend in employer-sponsored health plans. The most widespread federal insurance program, the “silver” state exchange plan, requires 40% out-of-pocket payment from the patient to the provider. So, at the same time that a greater number of patients are becoming insured, more than ever will have plans that require them to pay out of pocket — and often quite a large chunk, at that.
In an effort to increase their own profits, payors are also putting the squeeze on providers, often by denying coverage. This can happen inconsistently, and for any number of reasons — such as a missed premium payment by the patient, or lack of coverage for a certain service, or an inaccurate claim (making it all the more important to dot your i’s and cross your t’s when coding). In any event, someone has to pay and, in these cases, that responsibility typically falls to the patient.
Why you can’t let patient payments go
Every day that a claim sits in a payor’s system is a day that your practice, physicians or facility doesn’t get paid. The same is true if the payor is a patient. Revenue for services rendered is the life blood of any facility, and if patients need to foot 40% of the bill, you can’t afford to miss out. However, nearly two-thirds of consumers — 63% — say they didn’t know they had payment responsibility for a healthcare episode. The good news is that 74% of insured consumers say they’re both willing and able to pay their out-of-pocket medical expenses. The challenge, then, is ensuring that they do.
Strategies for capturing these payments
Patients who need to pay out of pocket for some or all of their medical care are frustrated by difficulties understanding what’s covered and what they owe, the lack of options for payment plans, and the poor timing of bills and communication around the process. Here are some strategies for capturing the revenue from this patient population.
- Patient education
Nearly half of patients are confused by the explanation of benefits from their insurance companies. Although it’s not necessarily within your remit as a medical provider, you can take on some of the educational responsibility, to ensure patients understand their coverage and are aware of their responsibilities — and that you get paid. Develop a self-pay policy, communicate it clearly to both staff and patients, and self-pay collection will become an integral part of your practice workflow.
- Point-of-service collections
One of the most effective means for improving days in A/R and, therefore revenue, is collecting some or all of the co-pay upon admission or before services are rendered, rather than sending a bill after the fact. Obviously, this isn’t possible in the case of many emergency room admissions, but it is for services such as elective surgeries. One expert estimates that only about 3% of hospitals collect a portion of co-pays up front from patients, and that this would be an ideal target for trimming A/R days.
- Make it easy for patients to pay
Although 90% of patients say that want to be able to pay their healthcare bills online, nearly 9 in 10 receive these bills by mail. Using a cloud-based application can connect your payment system with your patients, in the way they desire. A provider such as SwervePay Health can streamline the patient payment process, improving the revenue life cycle by decreasing collections efforts. With one swipe, a patient profile can be created, storing all patient payment data securely. Patients can receive email and text-based invoicing (and re-invoicing, if necessary), complete payments with just a click and receive automated payment receipts. In the SwervePay Health portal, they can update their details, view their history, and download receipts (which can be sent for reimbursement from flexible spending accounts). Facilities and healthcare providers can help ease the burden for patients by setting up customized payment plans, using patients’ preferred payment methods — which helps ensure that bills will be paid.
- Ensure regular follow-up
Whatever your approach, be sure to follow best practices for follow-up. Although the most recent guidelines do not prescribe a timeframe for each step of direct-to-patients collections, but the steps themselves are clearly delineated. Healthcare providers and facilities should do the following: “make reasonable efforts to ensure that patient bills are accurate and complete; attempt to enroll self-pay patients in any applicable public programs or other private insurance coverage; screen for financial assistance or charity care; offer payment plans that consider the patient’s economic circumstances; and follow the [Health Financial Management Association’s] long-standing Patient Friendly Billing Principles.”
The last resort
If these strategies don’t work, the last resort should be turning to a collections company. No one wants to hear from one, nor do you want to put your patients through that — but, sometimes, it has to be done. If you go down this road, be sure to choose a reputable agency that will work with both your practice/facility and your patients in a collaborative way.