As patient financial responsibility continues to climb, providers are adopting strategies to bolster their bottom lines and protect their patients from financial hardships. The COVID-19 pandemic has added additional strain to the U.S. healthcare system and we’ve now reached a perfect storm that impacts every practice’s financial outlook.
Fortifying revenue cycles and cashflow is now more important than ever. One of the biggest impacts has been the shift in financial responsibility from the insurer to the patient. This shift towards healthcare consumerism has been reshaping how practices collect revenue, but they have struggled to keep up.
Successful collection of patient financial responsibility is critical to managing this shift. Unfortunately, legacy collection strategies centered on complete and timely reimbursement from health insurance companies and the government must evolve to fully collect what is owed to providers.
Meanwhile, almost 40% of American adults are not able to cover even a $400 emergency with cash, savings, or credit, according to the Federal Reserve’s 2018 report on the economic well-being of US households. With more Americans out of work than ever before, this situation becomes even bleaker.
An efficient and well managed revenue cycle is more important than ever to ensure a medical practice’s financial health. Below we have outlined areas that can help get your practice in the best financial shape.
Upfront Payment Estimates
Providing estimates to patients prior to a scheduled procedure is an important step to make patients aware of fees associated with their visit and helps prepare them for their financial responsibility. Surprisingly, only 26% of physician practices use payment estimator tools. This means that the other 74% are either doing it manually, or not at all.
Practices must offer accurate estimates of out-of-pocket costs that factor in data relevant to the specific procedure. This estimate should include information about co-pay, co-insurance, and the remaining deductible. Without this crucial information, patients are unable to make the most informed decision regarding their treatment options. Being informed means patients can and will act more like consumers. This is what they have been demanding. It is also the right thing to do as a medical practice.
TIP: Using a payment estimator tool is a great way to ensure the information provided to patients is accurate and up to date. A good tool will be able to provide this information to patients quickly, while reducing the manual work for staff. Look for a tool that provides real time information to patients, workflow automation for staff, and exception-based reporting for supervisors.
Multiple Payment Options
As patient payment expectations in healthcare rise, consumer convenience becomes more important. Patients expect the same consumer experience they have in other industries. This makes it even more important to provide multiple payment options over various channels. A 2018 survey of patients found that capabilities such as self-service portals, simplified medical bills, and more flexible payment options would improve their healthcare experience. These capabilities also encourage them to pay their financial responsibility in full.
As patient financial responsibility grows, improving the financial experience is becoming increasingly important for patients needing care. Kaiser Family Foundation recently found that out-of-pocket costs are stopping half of patients from seeking the care that they need, and 1 in 8 say their medical conditions have become worse as a result.
A good patient experience also helps the bottom line. Practices with higher patient-reported experience scores have higher profitability, according to a Deloitte Center for Health Solutions analysis.
TIP: Implementing modern, convenient payment methods that instill confidence in patients is key to enabling patients to receive the care they need. It also protects the provider from bad debt. Practices should engage with software that allows patients to leave a card on file, set up payment plans, and utilize mobile pay functionality.
Insurance Eligibility Verification
Managing expectations from the start helps patients understand the fees associated with their visit. Verifying insurance eligibility in advance allows practices to accurately charge for visits and inform patients of their upcoming financial responsibility. When patients are informed of their estimates prior to appointments they are more likely to show up prepared to pay for services.
Insurance information is confusing for patients and changes rapidly. It is important to check eligibility as soon as possible so that patients understand their benefits and get the information they need. This also helps avoid blindsiding patients with surprisingly large medical bills. Another benefit of checking eligibility in advance is that it protects practices in cases where a patient’s insurance has lapsed or when policies don’t cover a certain procedure.
TIP: Some practices still rely on manual insurance verification. The process can be time consuming and also leads to human error. Switching to electronic patient verification methods can save a practice time and money. The key is to find a solution that allows for an exception-based workflow. This allows staff to focus only on patients whose insurance verification needs attention.
Denials and Underpayments
Denials and underpayments typically happen when there is no consistent process being followed. Practices need to utilize strategies that address denials related to insurance eligibility, medical necessity, authorizations, untimely filing, and clinical denials. Once processes are in place, it’s important to monitor improvements, track success rates and adjust workflows accordingly.
TIP: This process does not have to be manual. Consider utilizing software that can flag encounters according to specific factors. Implementing an integrated process will save administrative time and allow employees to focus on achieving the maximum reimbursement.
As a whole, the healthcare industry spends $315 billion annually on claims processing, payments, billing, and bad debt. By leveraging integrated software solutions, healthcare organizations can apply actionable data, analytics, and operational insights that traditional siloed systems cannot and weren’t designed to deliver.