Revenue Cycle News_Improving Patient Collections

3 Patient Collections Best Practices to Boost the Bottom Line

Excerpted from a story by Jacqueline LaPointe in RevCycle Intelligence, September 2018

Patients are finding their financial responsibility significantly increasing under health plans with greater deductibles, out-of-pocket costs, and cost-sharing arrangements. Average out-of-pocket costs increased by 11 percent in 2017, TransUnion Healthcare recently reported.

Providers are relying more on their patients for complete payment of services. But as out-of-pocket costs increase, the chances of providers collecting all the revenue owed to them dwindles.

By the time a patient receives a medical bill in the mail, providers are already seeing their revenue cycle slowdown. A McKinsey & Company study found that providers only expect to collect 50 to 70 percent of a patient’s balance after a visit. Seventy percent of providers said they wait at least a month to receive any payments from patients.

Educating providers and staff about patient financial responsibility and encouraging them to discuss patient collections prior to an appointment or at the point of service is key to a proactive patient collections strategy.

At the moment, providers are falling short of this goal. Over one-third of providers (36 percent) admitted to never discussing patient financial responsibility or a patient’s ability to pay prior to delivering care, a 2017 West survey showed. Patients are likely to delay paying their financial responsibility if their providers and their staff do not explain medical bills and how to pay them.

Discussing healthcare costs and patient collections prior to care delivery helped a small hospital in Illinois increase point-of-service payments by 300 percent in 2016.

“We did just some general education for all of my staff and it was just baseline on what insurance is, what does a deductible mean, what does a copay mean, what is a patient’s responsibility altogether, how is it calculated,” the VP of Strategic Planning at the time said.

Armed with more information, schedulers felt comfortable talking to patients about their financial responsibility when scheduling procedures. They also started reminding patients to bring their checkbooks to the hospital on the day of the service.

The hospital also implemented a cost estimate tool to better inform their providers and patients about patient collections.

Providers can help patients to shoulder the financial burden of healthcare by implementing payment plans. Third-party vendors and banks offer hospitals and practices payment plan programs that allow the provider or patient to break down large medical bills into more affordable payments over time.

These options are in high-demand among patients. Ninety percent of healthcare consumers participating in a 2017 Porter Research and ClearBalance survey stated that they were more likely to return to a provider who offers a loan or payment plan program for patient financial responsibility.

Read the rest of this story at RevCycle Intelligence.

“A McKinsey & Company study found that providers only expect to collect 50 to 70 percent of a patient’s balance after a visit. Seventy percent of providers said they wait at least a month to receive any payments from patients.”