Today, most physician groups and healthcare management services organizations automate at least part of their patient payment solutions.
And most are happy with their choice.
According to a recent survey from Bank of America, 58 percent of the responding 672 healthcare providers that use patient payment solutions express “high satisfaction” with these tools.
Still, many hesitate to switch from their entrenched manual, paper processes. While numbers vary, InstaMed’s most recent “Trends in Healthcare Payments' ' annual report claims that 78 percent of all healthcare organizations still collect from patients with time-consuming, error-prone manual processes.
While lack of bandwidth and budget always underlies the reluctance to bring on new technology, a missing link could also be that healthcare and revenue cycle decision-makers don’t connect patient payment solutions with improvement in net revenue. This article covers how each of the many facets of patient payment solutions feeds your net revenue and returns a positive ROI.
First, a story.
Physician group’s payment challenges frustrate patients
Increasing patient payment responsibility meant one Delaware healthcare system was serving more patients with high or past due balances. These patients were clamoring for payment plan options. Without automation, this organization’s payment plans had to be administered by staff manually. They muddled through a cumbersome, time-consuming system to process the payments.
Payment flexibility wasn’t the group’s only payment challenge, however. More and more patients were asking to pay their bills through their mobile devices or computers. Without an online payment platform available, the group found it often took patients months to pay by check or via the phone with a credit card. When patients found their billing statements overwhelming and cluttered, they frequently called the office for assistance in understanding the statements and making payments. This influx of calls and manual payments added to staff workload and administrative tasks.
Fearing they were risking patient satisfaction, the group brought in an automated patient payment solution to partner with their EHR.
Today, with a modernized patient payment portal created, the group’s patients can set up their own self-service payment plans directly. Staff can also set up standard plans which patients can choose from. The automated nature of these plans makes managing them effortless. With payment plans made simple, the number of these plans has more than doubled and transactions have tripled. For patients, payment plans can mean they can get the healthcare they need without jeopardizing their financial stability.
What are patient payment solutions?
Patient payment solutions automate much of the billing and payment processes in healthcare. Modern solutions do more than send statements, however. In addition to invoicing, comprehensive patient payment solutions can handle:
- Payment processing: accept various forms of payment, such as credit/debit cards, electronic funds transfers, and mobile wallets.
- Online payment portal creation and management: provide patients with a secure online portal to view and pay their invoices.
- Payment reminders: send automated reminders to patients for outstanding balances or upcoming payments.
- Payment plans: offer patients flexible payment options, including installment plans or financing options.
- Insurance coordination: integrate with insurance providers to process claims and determine patient responsibility for co-pays or deductibles.
- Real-time eligibility verification: check patient insurance coverage prior to or at the time of service to determine their financial responsibility.
- Estimation of patient responsibility: provide cost estimates for procedures or services so patients can understand their financial obligations upfront.
- Patient engagement tools: offer interactive tools and resources to help patients better understand their bills and make informed decisions.
- Customize reporting and analytics: provides detailed information on patient payment history, outstanding balances, payment plans, financial assistance eligibility, and payment reconciliation. This data helps providers improve payment collection and patient satisfaction.
The best platforms do all of these tasks while ensuring adherence to industry regulations (HIPAA). They contain security measures that protect patient payment information, too. Most also integrate with client EHRs.
Integrating a patient payment solution with electronic health record systems synchronizes data and provides a comprehensive overview of patient financials. This integration streamlines revenue cycle management, helping healthcare providers gain valuable insights into patient demographics, insurance coverage, and outstanding balances. With an overall view, healthcare providers can identify potential revenue gaps and develop targeted strategies to improve revenue generation.
Labor costs you can avoid or diminish with patient payment automation
In the third report in the series, Smart Thinking on AI in Healthcare, Adam Spielman of Citi Global Insights examines the role of both artificial intelligence and automation in the revenue cycle. He asserts that these tools - together and separately - can potentially save 25%-30% of the administrative costs at a healthcare organization. As healthcare and healthcare billing gets more complex, accurately handling payment tasks grows more labor-intensive. Automation can shoulder much of this additional labor. With salaries on the rise, avoiding new hires means preserving meaningful net revenue.
Beyond avoiding the expenses involved in new hires, automation helps providers reduce staff turnover. Today’s healthcare organizations have a serious issue with staff job satisfaction. Healthcare support staff turnover rate hovers around 20 percent, a level that won’t be declining anytime soon. The Study on Allied Health Workforce Retention which surveyed 1,000 employees in support positions and 320 employers responsible for more than 545,000 individual workers reveals:
- 49 percent are considering leaving their current employer for a different healthcare role
- 39 percent are considering leaving their current position for a different industry
- 60 percent expect to leave their job in the next five years
Not only do high turnover rates disrupt workflow, but they also add to the rise in labor costs, decline in patient satisfaction, and restriction of growth opportunities.
Given the high costs of finding and training new revenue cycle staff and the current staff turnover rate, healthcare leaders must do all they can to retain experienced staff. Staff cites longer hours, higher workloads, and monotonous tasks as causes of burnout and attrition. Turning work over to automation alleviates all three, helping you to retain your best, most productive people.
Raise payment accuracy to preserve net revenue
Manual billing systems can be plagued by mistakes and inefficiencies, causing invoice delays and non-payments. Anywhere from half to 80 percent of all medical bills contain errors. Year after year, keystroke errors stemming from manual processing underlie a significant portion of these inaccuracies.
By implementing a patient payment solution, the billing process becomes automated, lowering errors and delivering invoices on time. This increased accuracy decreases administrative expenses associated with billing and coding errors, ultimately enhancing revenue cycle management for healthcare providers.
Collect critical revenue upfront with a patient payment solution
Using automated patient payment solutions to step back from the race for the most experienced - and most expensive - revenue cycle staff is one path to improved net revenue for physician groups and management services organizations. These tools also help you recoup more earned revenue from patients and even improve patient satisfaction.
That today’s patients are paying a larger share of their medical expenses than any time in decades is fueling declines in healthcare organization revenue. The proliferation of high deductible health plans (HDHPs) has lowered premiums but increased out-of-pocket costs for care. This trend has had these consequences:
- the number of patients who owe more than $7,500 more than tripled from 5.2 percent of all accounts in 2018 to 17.7 percent in 2021
- patient balances higher than $14,000 almost quadrupled from 4.4 percent of all accounts in 2018 to 16.8 percent in 2021
- the collection rate for claims between $7,501 and $10,000 was 17 percent
- the collection rate for claims between $5,000 and $7,501 was 32 percent
This information came from an extensive survey of more than 1,600 hospitals and more than 100,000 physicians nationally.
High-dollar accounts aren’t the only threats to physician group revenue, however. Another recent study reveals that 78% of providers cannot collect a $1,000+ patient balance within 30 days. These receivables move into 45- and 60-day buckets. By the time a bill gets to more than 120 days in accounts receivable, the average collection rate on it is just 10 cents per dollar. MGMA suggests providers should aim for a benchmark of write-offs amounting to 5% of net revenue or lower.
Overall, bad debt is on the rise. Nearly one in three hospitals has over $10 million in bad debt, a significant financial burden, and some healthcare systems (HCA and Advocate Health, among others) report billions in bad debt.
Given these revenue trends, it’s imperative physician groups and management services organizations collect as much of the patient payment as possible upfront. Every dollar collected upfront means it stays out of the back end. Easing upfront payments for patients today involves several automated patient payment solution features:
Patient payment estimator: Per 2022’s No Surprises Act, physician groups must provide all self-pay patients responsible for the full extent of their medical bills with good faith estimates listing all charges. While at this time this service is not mandatory for insured patients, more and more are asking providers for pre-service estimates.
Increase top-line revenue and patient volume with improved patient experience and satisfaction
Healthcare organizations are just now grasping that patients evaluate and select their providers based on more than clinical care. The financial aspects like payment plan flexibility, payment methods, simplicity, and pricing transparency - along with clinician skill - all feed into patient satisfaction. In one study of 1,500 U.S. consumers, 90 percent reported that a good financial experience underlies their decision to return to a certain medical provider or not. Satisfied patients are loyal patients, more likely to revisit and recommend the group to friends. A reputation built on word of mouth helps maintain a steady patient base. Fifty-seven percent of those surveyed in the above study said they’d be more likely to recommend a provider to family and friends if they had a good financial experience.
Patients today want the following features in their healthcare payments:
Patient payment plans - as brought to life in the case study above, more patients need more time to pay higher co-pays, co-insurance, and deductibles. This is the new normal in today’s healthcare system. A payment plan can get you more revenue, and it can save your patients from dings to their credit. Offering financial assistance options generates patient appreciation and loyalty. Automated patient payment solutions facilitate transactions involved in these plans.
Expanded payment methods: Accommodating digital wallet tools like Apple Pay, Google Pay, PayPal, and even Venmo demonstrates patient-centric payment flexibility, a competitive advantage in a tough market. A modern patient payment solution contains a wide range of these platforms.
Simplicity: Today’s patients are accustomed to portals. In fact, 77% of healthcare consumers expect their providers to offer virtual and self-service options. That means not only telehealth but an online portal that’s available 24/7 for convenient payments. The best patient payment solutions create intuitive, user-friendly interfaces with quick links to provider emails and other contact methods. Ease of use builds trust and confidence in your payment process. It also prompts patients to pay their healthcare bills on time.
Pricing Transparency: Patients in the above study express uncertainty regarding their owed amount. When they receive bills more than a month after the service was provided, they are confused. Forty-one percent are dissatisfied with their billing experience, with a considerable number mentioning the lack of transparency and certainty surrounding prices. Approximately 90% of respondents believed they wanted upfront information about their co-pays, deductibles, and co-insurance. When insurance payer and provider statements differ, patients get frustrated. A robust automated payment system can clearly list the origins of all charges on the online portal.
Select the best patient payment solution for your organization
By lessening the burden of paperwork and administrative tasks associated with payments, patient payment solutions free your staff for patient care and more complex and challenging work. To effectively assess technology and optimize payment systems for your patient portal, there are several important factors to consider.
Integration: the payment platform should smoothly connect with your existing systems EHR, PM, and accounting systems. This integration will enable the management and tracking of patient payments without manual intervention.
Scalability: with the patient-centric strategies outlined here, your practice will most likely expand. Make sure your payment platform can handle increased user volumes without any delays or outages.
Automation: triggered sends and staff notifications can expedite the payment process.
Analytics and reporting: analytics can provide valuable insights into patient usage of the platform and suggest improvements to enhance the overall experience.
Avoid patient payment solution pitfalls
We mentioned above that 58 percent of those who use patient payment solutions are satisfied with them. Still, a hefty 30 percent perceived the implementations as unsuccessful. Be on the watch for issues they found frustrating. These include:
- complicated interfaces that confuse patients
- poor terminal functionality
- incomplete digital payment options (most don’t take ApplePay)
- poor integration with existing revenue cycle software
With a proven, reliable patient payment solution partner, you should be able to avoid all of these problems.
Give your patients the pricing transparency and ease of payment they crave
Convenient, patient-centric payment solutions are becoming more sophisticated, offering personalized, real-time, and seamless payment experiences. They will evolve with the rapidly shifting healthcare financial landscape.
MD Clarity’s Clarity Flow generates accurate and convenient patient cost estimates that empower patients to pay upfront and increase your upfront collections. These communications help instill trust in patients when utilizing your services and allow them to make informed decisions regarding payment.
From patient collections to payer contract performance, you can find your best opportunities for revenue recovery. Get a demo to see how MD Clarity restores revenue to provider groups and management service organizations.