As Patient Financial Responsibility Grows, Technology Key to Collections
Patient financial responsibility has tightened provider cash flow, but tech has helped one medical group loosen its grip by doubling daily cash collections.
Source: Getty Images
- You may not want to think about the new year just yet. But if you don’t have a patient payment solution in place now, you might be sorry come January.
Patient financial responsibility has hit all-time highs over the last decade, with deductibles for a single patient covered by an employer-sponsored health plan averaging over $1,700. That cost is up 61 percent from 2012, KFF reports, and even higher for patients responsible for family medical expenses.
This rise in patient financial responsibility has squeezed cash flow in January and February, in particular.
“Out-of-pocket deductibles reset at the first of the year, so the first months of patient visits,” explains Janet Carbary, CFO of Integrated Rehabilitation Group (IRG), a group of over 35 physical therapy clinics in the Northwest. “The responsibility is on the patient to pay most of the visit costs, and their insurance doesn’t really send you any cash at all.”
Looking back at fluctuations in cash flow, Carbary knew IRG needed a patient payment solution to beat the squeeze by January.
“We looked for a solution that would help that by getting the patient responsibility portion into their hands sooner and in a very streamlined way to help patients pay quickly and online,” she recently told RevCycleIntelligence.
The problems with patient payments
The traditional way of collecting payment — and the technology systems that support it — aren’t optimized for the era of “patient as payer.”
For example, until recently, IRG was using an EHR and billing system that would generate patient statements once a month. Statements were then mailed to patients.
“It was an antiquated system as far as statement billing went,” Carbary stated. “The challenge was people tended to take those paper statements and put them somewhere and forget about them. And it generated a surge of phone calls to my billing staff at once.”
Providers have traditionally relied on insurance companies to pay for the bulk of medical items and services, and provider billing systems have been designed with this fact in mind. However, providers are counting more on their patients to cover the costs of visits as their employers seek to cut healthcare costs with high-deductible health plans and other cost-sharing options. The prices of medical services have also increased as overall inflation reached a four-decade high in mid-2022.
With monthly paper statements, patients at IRG could receive a bill totaling thousands of dollars up to two months after they started physical therapy.
“It’s startling to get that bill 45 to 60 days later because you haven’t met your deductible yet,” Carbary said. “And our patients may come in two or three times a week for rehabilitation. They had to wait for several claims to clear.”
The combination of higher out-of-pocket expenses and antiquated provider billing systems has left a bad taste in patient mouths. In fact, one in five patients would rather go to the DMV than try to pay their medical bills online, according to a 2021 survey of over 1,000 individuals. Patients found bill pay options from their providers confusing and many said the systems lacked customer support or key information, such as insurance.
Providers are not only risking revenue by using legacy systems and mail for patient billing but also patient loyalty. Data shows that an overwhelming majority of patients consider the financial experience when deciding whether to go back to a provider.
“We want the patient experience to be seamless and that's really important for our referral sources because we rely on doctors to refer patients to us,” Carbary stated. “If the patient has a bad experience, they will tell the doctors.”
Updating the patient billing process
Entering the digital age—which is arguably in its infancy in revenue cycle—means more than offering online bill pay. IRG had a link on its website where patients could pay their bills online. “But you had to be purposely looking for that link,” Carbary said.
A modern, automated solution to patient payments was key to overcoming the challenges of patient billing and capturing revenue as soon as possible.
“What was more important to us was that a solution gave the information quickly to the patient,” Carbary explained. “So either through text or email and as soon as the patient balance was identified.”
IRG invested in a patient payment solution with that capability and allowed patients to pay electronically from that notification, so via email or text. Patients could also set up a payment plan once they entered the system.
“It has helped people understand their balance, and we recognize that in January, February, and March, in particular, when patients have large deductibles, they can pay it over time and it’s seamless,” Carbary said.
“No longer do they have to call my billing staff to set up payment. [The solution] makes it painless,” Carbary explained now that IRG has been up and running on the solution for several months. Some patients were confused by the new notifications at first, but the group let patients know upfront about the change and fielded questions following implementation.
The solution has also streamlined revenue cycle workflows after a quick implementation across all of IRG’s clinics. The patient payment solution now works in the background thanks to the solution’s integration with the group’s EHR and billing system.
“Any finance person in healthcare will tell you this: your solution has to interface with the billing system,” Carbary elaborated. “You can’t get accurate balances if payment information doesn’t flow seamlessly between your collection system and your billing system.”
“There’s a file that comes from my EMR every night that goes into PatientPay [the solution] to update patient balances. There’s also a file that goes from PatientPay into my EMR that shows patient payments for a number of days. That bidirectional interface is critical,” she continued.
This integration didn’t change a lot of revenue cycle workflows, which was a relief to staff learning a new system. Instead, it made it easier for staff to see what patients truly owed.
“It’s not always easy in our EMR to identify what the true patient balance is because of the way it posts copays and other payments like that,” Carbary said.
Loosening the grip on cash flow
IRG implemented the patient payment solution in December and saw an immediate increase come January, beating the winter squeeze on cash flow.
"We essentially doubled our daily collections,” Carbary emphasized. “And our cash collections have stayed at that level for the last seven months. We are still seeing patients pay sooner and with fewer questions. It really has enhanced our cash collections.”
Carbary attributed IRG’s patient payment success to her staff, which she said, “stepped up and did a much better job in the front office, collecting patient balances when patients come in for treatment.”
“We do a lot of upfront work and we are working on how we communicate what the patients owe,” she continued. “Educating our staff to help our patients understand insurance and how it pays is key.”
The patient payment solution has supported staff and patient education efforts. Without the interface, front office wouldn’t necessarily know what a patient owes the second they walked into the clinic’s doors. Now, they can find out with a couple of clicks of the mouse and engage patients in the financial experience. Technology has been critical to IRG’s success, according to Carbary.
“Healthcare is behind most industries when it comes to automation, but we can’t be afraid of it,” she said. “Our lack of system flexibilities, like using an old EMR system that isn’t flexible and doesn’t interface well with new technologies, won’t work. Our patients are expecting better and we have to hear what they are saying.”
