Getting Paid

A dramatic increase in the number of patients insured by high-deductible, high-copay plans has led to providers spending more time collecting payments. Cuts in Medicare reimbursement rates, as well as the implementation of the Affordable Care Act (ACA), are dramatically changing the health care landscape in the United States. The ACA outlines a three-part goal of achieving better health care for patients, improving community health outcomes and lowering health care costs, and HME services will play an expanded role in achieving this goal. However, equally important to ensuring the outcome of lower health care costs is making sure providers, and HME businesses in particular, are able to recoup payment for services as quickly as possible. By increasing the speed at which co-pay collections are made and patient billing is processed, health care providers are able to increase efficiency, increase their bottom lines and pass on savings to patients. Your organization’s ability to collect payment for service may mean the difference between thriving and just surviving. In CFO’s 2012 “Cash & Liquidity Management” report, results from a survey of CFOs and other financial professionals pointed to accounts receivable improvements as a key area for managing working capital. When asked to rank from most important to least important the main dimensions of working capital, the respondents ranked “receivables performance” first, above “inventory management” (second) and “payables performance” (third). When asked what changes would most contribute to cash flow management, respondents again pointed to receivables performance and collection, ranking “motivating account relationship holders to support collections activity” and “delivering better reports on account delinquencies across the company” as two of the top three influential changes. This is without a doubt the most important time in the history of the HME industry to have a comprehensive strategy for obtaining cash from patients. Providers have no options other than to adapt with the changing environment. Automation plays a key role in a provider’s ability to maximize collections while keeping the drain on staff resources to a minimum. A practice management system must be able to provide accurate information quickly and requiring an operator to only work exceptional situations and not every transaction for all their patients. The cost of recovery would be too high if an employee must touch every transaction. Providers need to depend upon their software system to seamlessly integrate and exchange valuable information to and from the services that they depend upon for their collections process. A critical element of a patient management system is the integration of the billing and the collections processes. For a small practice, patient collections can be a time-consuming and labor-intensive process, while larger practices often have several dedicated staff members. Instead of spending valuable time treating patients, attending to necessary administrative tasks or even engaging in continuing education, your staff must instead make endless calls reminding patients of their obligation to pay. All of this for an average collection rate below 50 percent. The best solution, regardless of size, is working with a provider of comprehensive billing and collections services. Professional recovery firms can seamlessly improve your total recovery by as much as 50 percent. However, selecting the best firm for your practice is important. When patients cannot or will not pay their medical expenses, it can spell serious trouble for providers. No office wants to spend valuable time chasing after unpaid bills. While some insurance companies have less-than-savory payment policies, they usually pay on time. Individual patients, who don’t have any terms of their own to abide by, are a different story. Once service is rendered, they can walk out the door with no intention of paying. Some genuinely cannot afford to pay on time. Whatever the case, a large accounts receivable entry can make it difficult for practices to continue operations. It’s not hard to understand why patients seem to “lose” or “forget” medical bills: the cost of an organ transplant or recurring treatments for chronic illness, for example, can be hard to stomach, especially for low-income patients. So, how can health care professionals better manage their cash flow? Practices must develop a set of guidelines and make it known to both staff and patients. Below are five tips to get started.

Capitalize on Collection Opportunities

Practices have three crucial points to collect payment: When a patient schedules an appointment over the phone, when the patient checks in for the appointment and before the patient leaves the office. If a patient receives the service and exits without paying, his incentive to pay diminishes drastically.

Make Patients Aware of Costs

Many patients assume that insurance will cover most, if not all, of their treatment costs. However, complex surgeries and other in-depth procedures can run far beyond the scope of a conventional coverage plan. It may benefit your practice to have a professional financial advisor on your team who can help patients understand the costs of treatment, how much they will have to pay out of pocket, and their financing options.

Be Firm, Polite and Flexible

Train receptionists to be assertive and follow a script to facilitate collection. Rather than ask patients if they would like to submit a payment, ask how they would like to pay. Patients can easily slip out of the first method, while the second method creates immediacy. The more payment options you provide to patients, the more likely they will pay. Consider investing in a point of sale system, which accepts common payment types and can help keep track of patient accounts.

Apply the Three-Strikes Rule

Customers are obligated to pay to receive services, and healthcare is no different. Don\’92t send letter after letter reminding patients to pay. If he doesn’t pay after the third reminder, forward his account to collections. A practice can, in most instances, withhold future services from a non-paying patient. Before doing so, it may be wise to seek legal counsel, as there is always a chance the patient may file a lawsuit for malpractice. Different states have different definitions of patient abandonment, so it’s best to do your research before taking action.

Thinking About Outsourcing A/R?

• Consider the Benefits
   
• Reduction of employee expenses
   
• Increased automation and increased patient contact
   
• Improved cash flow through lower Days Sales Outstanding (DSO)
   
• Lower bad debt/higher earnings
   

Choose the Right Partner

• Look for an industry leader—an innovator
   
• Is there a defined process with multiple levels of activity?
   
• Does the collection process allow a variety of contact modalities?
   

\cf0 Print\ Telephonic — both automated and personal\ Text E-mail

• Do they offer an easy way for the patient to pay?
   
• What is their track record of performance?
   
• Do they offer tools that track resolution and collection performance?
   
• Can they validate their performance claims?
   
• Utilize the Partner Resource
   
  • Consulting
     
  • Compliance calls
     
  • A/R portfolio analysis
    
  • Facilitate the purchase of A/R
     
  • Strategic business partners