FIGHTING INCREASING PATIENT A/R LEVELS CAUSED BY HIGH DEDUCTIBLE HEALTH PLANS
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Amid national healthcare reform, Meaningful Use requirements, reduced Medicare reimbursements, Medicare recovery audit contracting (RAC), changes in coding and a difficult economic climate, streamlining your practice’s revenue cycle is more important than ever. Especially given that the health care industry is becoming a much more consumer centric industry. This paper will discuss some simple, but often overlooked, ideas to enhance revenue-to cash conversion.
The process of capturing patient-owed dollars is especially challenging in today’s world of high deductible health plans. Your practice can spend less time collecting patient-owed balances and more time caring for your patients, if you have the correct procedures in place.
Using standardized procedural and diagnostic codes to your maximum advantage is always a huge challenge. As Medicare and insurance coding regulations change, staying current is crucial to maximize third-party reimbursement. From Medicare RAC to the transition to ICD-10, revenue cycle managers have plenty of responsibility.
To facilitate reimbursement and compliance, practice revenue cycle management experts recommend that you develop specific coding guidelines for your office. When doing so, make sure to define clear objectives and designate acceptable primary and secondary resources. It also helps to create standard protocol for challenging coding issues that arise.
Finding the right software or online tools for coding can also save your coders time and your practice money. From complete code-sets to resources to help you interpret jargon and stay abreast of changes, finding the right coding tools for your practice can be the first step toward increasing the speed and returns of third-party payers.
There are numerous coding seminars held across the country each year and most are a worthy investment for your billing staff. Invest regularly in this type of education to keep your office up to speed on these changes.
The American Academy of Professional Coders (AAPC), American Medical Association (AMA), American Health Information Management Association (AHIMA), Center for Medicare & Medicaid Services (CMS) and the various medical specialty organizations are all great sources for coding information to facilitate your third party billing efforts.
One last significant but often overlooked statistic in the industry -- almost 20 percent of all filed claims get rejected. Incredibly, some for reasons that aren’t even published. Herein lies a key question for you and your staff to contemplate, why of these rejected claims do 65 percent never get re-submitted? Don’t fall into this administrative burden trap.
Many practices do an excellent job of billing insurance companies, but fail to properly educate patients about their financial responsibilities. This common mistake can lead to unnecessary high patient balances that are frequently never collected.
When asked by Consumer Reports “What bugs you most about your doctor?” patients ranked “Billing disputes hard to resolve” third, behind only “Unclear explanation of problem” and “Test results not communicated fast enough.”
So, how do you make patient visits comprehensive; not just in terms of their diagnosis and treatment, but also on the business side of the equation? Start by taking the extra time to explain verbally and via print the insurance benefits, HSAs/FSAs and patient responsibilities. Doing so will alleviate confusion and frustration, while at the same time increasing the speed of your accounts receivable collection cycle.
Adding to patient frustration is the fact that employers have embraced new insurance offerings to combat rising healthcare costs. High Deductible Health Plans (HDHPs), which shift significant financial accountability to consumers, have matured in the last few years. According to America’s Health Insurance Plans (AHIP), the growth in HDHPs is a major contributor to current expectations of out-of-pocket payments growing from what was $250 billion in 2009 to $420 billion this year. A whopping 68 percent increase in five years. Couple this with the industry fact that almost 50 percent of patient-owed balances go uncollected and you have cause for concern.
These same rising out-of-pocket healthcare costs have also added a financial strain to many families. When faced with larger medical bills, many patients are inclined to pay those with harsh late payment penalties first (i.e. mortgage, credit card, cell phone, etc.) while relegating their health care obligations to a lower priority.
With an increased burden on the patient, it is vital that your efforts to collect patient-owed balances begin with educating new patients about your financial policy and payment options. This education should occur when new patients are registered and be reinforced whenever treatment is given. Comprehensive interactions like this prepare patients to pay their portion of the bill before it arrives. Then, by implementing a patient-friendly customized statement, you can expect to collect a significant portion of the patient-owed balance quickly and at a much lower cost to your practice.
For most practices, their patient statement is the printed form their patients see most frequently. Unfortunately, the look-a-like, cookie-cutter, patient statements utilized by most practice management systems do not deliver the ease of understanding and collection power needed in today’s practices.
It is important to analyze your outgoing statement. Is it comprehensible to patients? How do you know? Is your staff faced with the same questions month after month? A 21-item survey about annoying items by Consumer Reports identified “incomprehensible bills” as the fifth most annoying item to Americans. If your patient statement uses unnecessary insurance or medical jargon and does not clearly identify the patient-owed balance you could wait longer for payments and also damage your relationship with disenchanted patients.
So how do you make sure your statement is patient friendly?
Consider these questions:
- How clear and easy to understand is your statement for your patient?
- What percentage of patients call with questions?
- How do these questions vary month to month or are they the same?
- What can be done to eliminate these labor intensive calls?
- Is the amount due clearly highlighted, and is it clear that this is the patient’s responsibility?
- Is there a due date and is it a reasonable number of days from receipt of your statement?
- Do you provide easy and convenient payment methods, such as online or with a credit card?
- What percentage of your patients pay online and should that percentage be higher?
- Do you offer payment plans and do you publicize this option on your statement?
- Do you suppress aging information (30/60/90/120 day balances) rather than show patients how many days you are willing to carry their balance?
- How does your statement reflect your brand? Is your logo and key contact information prominent?
- Do you communicate useful information on the back of your statement?
- Do you implement the use of statement inserts to share important practice news, information and policies?
Now just may be the right time for you to analyze your current A/R approach. How is everything currently being done and what should be done?
Practices that have switched to POS-I-BILL® Statement Processing see measurable A/R improvements by working with POS to implement improved proactive education pieces and upgraded patient-friendly statements. Below are just a few examples.
INCREASED COLLECTION S = FEWER PHONE CALLS = FEWER PAST DUE & FINAL NOTICE STATEMENTS
When your statements are easy to understand, and when you make it easy for your patients to pay in whatever way they prefer, they’re more likely to pay you.
At Burlington Pediatric Associates, two small changes on their statements have made a significant impact. When the practice switched to POS-I-BILL, they added credit cards as a payment option. They also had POS suppress/remove aging information from the bill altogether, since some patients might misinterpret the data or use the extended timeline to procrastinate payment.
“We process 1,200 statements a month,” says Patty Goudie, the Burlington Pediatric Associates office manager. “These simple changes greatly influenced an increase in collections for our practice.”
The billing manager and ophthalmology provider with ten practitioners saw several benefits from a custom statement through POS-I-BILL.
“We have seen a quicker turnaround in our patient collections and less account aging. It was also great that we are able to use the back of our statements which were previously blank. We also ordered a flyer announcing a new physician to our practice and had POS insert it with our patient statements for two months. It was an economical way to advertise in difficult financial times.”
SAVED TIME & MONEY
How much time and money does your office spend processing statements each month? Does your staff manually print, fold, stuff and mail them?
One St. Louis pediatric patient account representative, used to spend the majority of her time processing statements - at an estimated cost of $5-$7 per statement, once printing and postage were included.
“Now, we spend about 10 minutes a week generating statements. Instead, we can spend time working accounts and processing payments.”
A Pain Medicine practice in Fort Worth that used to manually process their statements indicated that the time savings associated with the POS-I-BILL statement processing solution was quite significant. They said the entire statement process took less than five minutes when prior to POS-I-BILL this same process would take a complete day. The billing time they saved was refocused toward outstanding collections and they reduced their outstanding patient A/R by 25 percent since using POS-I-BILL.
REDUCED STATEMENT VOLUME
The flexible design and comprehensive reporting options influenced a California ophthalmology office, to switch to POS-I-BILL from their practice management software, Allscripts. By customizing their statements to the fullest extent, including eliminating aging buckets, they reduced the number of monthly statements sent by 22 percent.
REDUCED A/R CYCLE TIME
When formatted correctly, your statements can reduce your accounts receivable cycle time, improving the overall cash flow of the practice. A West Virginia ophthalmology office billing manager said the impact of POS-I-BILL on their A/R cycle was very significant.
“By having a custom designed statement that is patient-friendly, we have seen patients pay more quickly, cutting the average number of days in the A/R cycle in half.”
REDUCED PHONE CALLS
When patient questions are answered before they even need to be asked, the number of phone calls decreases. Fewer phone calls to your staff means more time to devote to managing paperwork and taking care of your patients.
Since switching to the POS-I-BILL Statement Processing solution, Rehabilitation and Electrodiagnostics experienced a 50 percent decrease in call volume regarding statements. The Vision Center saw noticeable changes as well. “By changing the format of the statement, we dramatically reduced the number of billing question phone calls to our office,” says Michelle Spellman of the Vision Center. “I would estimate that number was reduced by 75 percent.” A custom statement from POS-I-BILL that eliminated confusing columns and unnecessary information was critical in seeing these drops in call volume.
IMPROVED PATIENT CARE & SATISFACTION
Patient-friendly statements don’t just impact your accounts receivable - they also create happier, more loyal patients. When your patient’s visit is hassle-free and when patients receive clear, useful statements from your practice, their overall impression is more likely to be positive.
Your statement isn’t just a means for collection – it can be one of the most powerful tools in your communication and marketing arsenal. An effective patient statement not only motivates action, it’s also a strong reflection of your brand.
POS-I-BILL can work in conjunction with almost every practice management system on the market today, so incorporating patient-friendly statements into your current system is easy and smooth. Your statement can look exactly how you want it to look instead of how your software dictates it should look. Switching your statement processing system can be a simple and streamlined process. POS makes the transition to POS-I-BILL easy. Joan, a St. Louis pediatric practice administrator said transferring to POS-I-BILL “was a very simple process with minimal training and no expensive software or hardware to purchase.”
Talk to your POS Regional Territory Manager about how the POS-I-BILL Statement Processing solution can help your practice today.