Top Ways to Improve Collection of Patient Financial Responsibility

September 18, 2020 - As the cost of healthcare continues to rise and patients increasingly owe more for their care, providers are finding that collecting patient financial responsibility is becoming one of their biggest opportunities and biggest challenges.

COVID-19 was an unprecedented public health crisis that touched all aspects of healthcare, including the revenue cycle. As communities and their providers dedicated resources to fighting the virus, many businesses were forced to furlough, layoff, and even terminate employees to stop themselves from going under.

Providers are feeling the challenges of a public health crisis turned economic emergency.

Two in five working-age adults do not have stable health coverage because of the pandemic, and more than one-third are having medical bill problems, the Commonwealth Fund recently reported.

Providers are worried about coverage instability and possible increases in the uninsured rate could make recovering from COVID-19 response efforts even more difficult. Patients without stable coverage – or any coverage at all – could continue to avoid their providers, leading to worse outcomes in the future.

READ MORE: Patient Collections Takes Over a Month for Most Providers

More self-pay patients could also impact already sinking bottom lines if providers do not have adequate methods of collecting patient financial responsibility during the pandemic and its aftermath.

Patient eligibility and coverage discovery

Verifying a patient’s insurance coverage and eligibility for services is already a revenue cycle management best practice. But this step is becoming even more important in the increasingly fluid coverage environment.

“Insurance benefits should be verified prior to the date of service or soon after to prevent billing delays, and copayments and coinsurance funds should be collected in advance,” analysts at public accounting, consulting, and technology firm Crowe advised.

But when patients do not seemingly have any coverage at the point of service, providers do still have some options.

Insurance or coverage discovery solutions identify sources of insurance for patients, whether it be Medicare, Medicaid, or commercial insurance. The solutions query hundreds of different payers to identify valuable sources of coverage for patient accounts.

READ MORE: Developing a Patient Collection Strategy for a Growing Health System

Identifying unknown coverage prevents patients from the higher costs of being a true self-pay account and helps providers prevent lags in A/R by going after insurance even during pre-service.

Price transparency

New hospital price transparency requirements from CMS may be drawing heavy criticism from providers, but healthcare organizations can leverage price transparency to their advantage.

Providing out-of-pocket cost estimates can be extremely valuable to patients who are facing high deductibles and those who are newly uninsured. The estimates set realistic expectations for the patient and open the way for a productive conversation about the patient financial experience.

While insurance verification and technology are key to determining cost estimates for patients, education is also crucial for a successful price transparency strategy.

“What's important about the changes that we were looking at and started to implement is utilizing our frontline staff more as advocates and helping them gain a full understanding of the full spectrum of wellness,” said Stacie French, manager of patient access at Monument Health in South Dakota “So, we're not just looking at treatments and balancing what's going to be out of pocket. What we're doing is trying to educate our staff, so that they fully understand coinsurance, deductibles, out-of-pocket costs, and all of the costs associated with related treatment plans.”

Online and self-service options

READ MORE: Consolidated Medical Billing Boosts Collections for a TX Group

Half of healthcare consumers are frustrated with their provider’s patient billing and collections processes, especially those that are not yet digital, according to a recent survey of over 1,000 individuals.

Lack of digital payment options and other issues, such as unconsolidated medical bills and inadequate customer support, are often the reasons why patients don’t pay medical bills, researchers found. Forty-one percent of respondents said they would consider switching to a different provider who offered an improved, digital patient billing and collections experience.

Max Tselevich, CEO of The Doctor, a physician practice in California, recognized this disconnect between patient preferences and the traditional way providers do business. Now, the practice is nearly completely paperless.

Patients receive a text notifying them of an upcoming bill and “all they have to do is click one button and it explains to them what that bill is for, how much it is, how to make a payment,” Tselevich explained. And the text is generated the moment a provider logs a visit and inputs the billing codes for services rendered.

Websites and patient portals are other ways providers can connect with their patients digitally. These tools can also be leveraged for self-scheduling and telehealth services, two capabilities patients are seeking during the pandemic.

Payment plans

In cases where patients cannot pay financial responsibility with one payment, payment plans are a good option for providers and their patients. The plans allow patients to space out large medical bills over time, boosting their chances of paying in full and on their own terms.

Payment plans have been very successful at Floyd Medical Center in Georgia, especially during the pandemic.

“Had it not been in place before this, we probably would have struggled more,” said Rick Childs, the health system’s vice president of revenue cycle.

For the past couple of years, the health system has offered payment plans to patients with help from a third-party patient financing vendor. Patients either sign up for a payment plan at registration or revenue cycle staff send an aging account to the vendor after two unsuccessful attempts at contacting the patient about their bill.

The plans have helped to boost the collection of patient financial responsibility at the health system before and during the pandemic. But Childs expects the option to become even more central to the health system’s collections strategy moving forward.

“I foresee in the future, as people start getting those services that they have put off and getting back to work, they're going to be behind on bills. They're going to need that flexibility of a payment plan,” stated Childs.