Optimizing Your Revenue Cycle Management: Step 2

Doctor with PatientCollect the Patient’s Responsibility of the Service

Patient responsibility is increasing year after year – it is now at nearly 25% of the value of the total bill.[1]   Practices need to develop a core competency in collecting the patient portion. The insurance payment alone is unlikely to cover the full cost of the service provided. The patient portion is often the source of profit in a visit, yet practices generally only collect on 50% of what they are owed from patients.[2]   Understanding patient responsibility and having the skills to collect co-pays, co-insurance and deductibles during the visit are critical to your revenue cycle management process. In order to do this, however, the practice needs to have the information on patient responsibility and past due balances close at hand.

Automate Patient Eligibility

More than 25% of payor denials occur because patients are not eligible for benefits.[3]   An insurance card is not an ID card; it functions like a credit card – proof of an ability to pay for the service to be provided.   No other business says to a customer, “Oh, we have your card on file and we will just assume it to still be good.”  Not likely.  Every time you buy something with your credit card, you have to produce the card to prove that it is still in good standing.  Your practice should be no different.  Seeing a patient without confirming his/her insurance information is taking a huge risk on never receiving payment.  Patient’s coverage can change from visit to visit. Ensuring active coverage is essential in preventing eligibility and coordination of benefit denials and identifying accurate co-pay and deductible amounts.

The problem is that checking eligibility either through the web or online is cumbersome and time consuming. It can also be expensive if your practice is paying for each transaction through a traditional practice management system or clearinghouse.  Implementing a modern revenue cycle system will enable your practice to automate this process - ensuring patient eligibility and enabling early collection of patient responsibility. You can enable automated 270/271 responses, access real-time verification, and create flags and alerts to identify demographic capture errors in scheduling process. Automated identification of patient responsibilities will vary from payor to payor but will likely communicate in-network co-pay, out of network responsibility, and deductible used to date.  This information is critical in estimating costs for services, as well as the outstanding balance for your patients.

Patients need to understand their payment responsibility upfront – before the service is provided. By leveraging software tools to verify a patient’s insurance coverage upfront, communicate the estimated cost for services, inform the patient of their obligation, and help them understand the terms and timing of their payment, you can eliminate payment confusion and improve patient payment outcomes.

Institute Patient Friendly Statements

In today’s healthcare market, there is a fine line between sufficiently informing patients of their responsibilities regarding balances not collected at time of service and overwhelming them. Enhancing your billing statement’s functionality, design, and delivery method will increase the speed in your patient receipts. Patient friendly statements are clear, with legible fonts that highlight pertinent sections of the statement, such as account information, guarantor, amount due, due date and remittance address. In addition, your statement should be concise and correct in terms of services rendered and balance due. Finally, your practice should provide the ability for online as well as offline payment.

Online Bill Payment – Make it Easy for Patients to Pay

Think of your experience today as a consumer. How do you pay your bills?  The majority of consumers today are strongly encouraged to pay their bills electronically and most do so willingly.  It is more convenient for the patient and much more cost effective for the practice, since paper checks and trips to the bank are reduced.  Making it easy for patients to pay is vital in creating a patient positive experience and collecting the ever-growing amount owed by patients.  Setting up an online payment portal will also enable automated withdrawals and payment plans. It’s fast, easier for patients, reduces payment procrastination, eliminates manual processing of deposits, and eliminates late fees and overdrafts.

In summary, by automating the entire billing process – from eligibility to patient payment, your practice can significantly increase timely, accurate collection on the patient portion owed for your services, while at the same time reducing any confusion for the patient in terms of their responsibility.

Sources:

[1]“New AMA Study: Patients Responsible for Nearly One-Quarter of the Medical Bill,” June 2013, http://www.ama-assn.org/ama/pub/news/2013/2013-06-17           

[2]  “The next wave of change for US health care payments, ”McKinsey Quarterly, May 2010

[3] AMA, “Follow That Claim,” http://www.ama-assn.org/resources

 

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