Since the Affordable Care Act (ACA) passed in 2010, more providers are experiencing a shift in health care revenue sources, especially as patient financial responsibility increases.
Patients are more accountable for their health care costs than ever before. Recent data confirms that today’s health care consumer pays almost 35 percent of medical expenses out of pocket. That’s triple the amount paid in 1980.
One of the primary drivers for this shift in patient financial responsibility is the rise in high-deductible insurance plans. According to the Kaiser Family Foundation, insurance deductibles have increased by 255 percent since 2006, and the average health insurance premium for family coverage has increased by 83 percent since 2005.
Creeping health care costs and an increase in high-deductible health plans have created an uptick in patient responsibility. This dynamic change in health care payer burden is challenging for many, making the need for strong patient engagement and communication even more important. With many providers focusing on patient experience, it’s important for them to understand that patients are the new payers and tailor billing strategies accordingly.
As consumers bear a larger burden of medical expenses, providers have experienced increased difficulty in collecting outstanding balances from patients. Providers now expect to collect only 50 to 70 percent of a patient balance after a visit, according to a McKinsey & Company report. That same report also revealed that 36 percent of patients have a balance more than 60 days past due, with more than 73 percent of providers saying it takes one month or longer to collect money owed.
To improve their rate of collections and the entire billing process, providers need to focus on restructuring their revenue cycle management strategies. It’s possible that with the right technology and the right plan, you can efficiently collect payments, remain in good standing with patients and create an ideal billing experience.
Here are a few strategies for increasing cash flow, creating a productive billing process and, hopefully ensuring happier patients and staff.
1. Secure a credit card upfront.
Success at the initial patient contact can be accomplished with three Cs: copay, credit card and collect. It’s not always popular with patients to collect a copay on the spot, but providers need to take advantage of that initial conversation to collect payment while they have the patient’s attention. The longer you wait to inform the patient of their financial obligation, the more your labor costs rise to collect on the account. Patients will appreciate the transparency. In fact, according to an InstaMed report, nine in 10 consumers actually want to know their payment responsibility upfront.
2. Automate processes.
If you are still printing, stuffing and sending statements, you’re throwing away money, time and labor. Automate your manual billing process and, while you’re at it, carry that automation over into your billing systems. When your billing systems are tightly integrated, you’ll have insurance and patient financial information in one place. This will help save time by eliminating the manual labor involved in reporting, reviewing and sending invoices. Automation also helps create greater inventory control and accounts receivable management, which leads to processing more patient intakes and increasing cash flow.
3. Offer online billing.
Gone are the days of needing a stamp and envelope to make payments. Why should paying medical bills be any different? As the baby boomer population comes to rely more heavily on technology, there’s a greater need for a quick and easy payment solution. In fact, a Deloitte annual survey found that 70 percent of respondents prefer to get their bills electronically instead of in paper form.
Providers should consider moving their business online for greater efficiency, patient convenience and satisfaction. Not only will you reduce paperwork, you will also reduce the labor it takes to individually process a payment. Online payments save time, create convenience for your patients, project a professional image and boost the credibility of your business.
4. Use customized invoices.
What’s the difference between statements and invoices? Everything. Statements are summaries and are often confusing for the patient. A big concern for many patients when they get their medical bills is the unfamiliarity with certain words or prices. That’s why the simplicity of the bill itself is just as important as how the patient accesses it. The right type of bill is simple to read, clear and concise and is sent out in a timely manner. A bill should not overwhelm the patient because then they may just ignore it.
Our recommendation is to create a customized invoice that will change the way your patients see their financial responsibility, and change the way they pay you. An invoice is clear, breaks down the patient’s financial responsibility to an understandable level and delivers it in a timely fashion.
5. Communicate with staff.
Once you’ve decided to revamp your billing processes, communicate the changes. Some of the modifications to your billing policy may seem easy to implement, but it’s important to remember that even small changes can have a big effect on your staff, patients and revenue. Give your staff a clear plan and powerful tools to prepare for conversations with patients.
Provide staff with step-by-step directions to follow, and make it easy for them to gather information and feel confident engaging patients. The last thing you want is unprepared staff making themselves or the patient feel uncomfortable. FAQs and resolutions to possible scenarios, along with training and consulting, are essential for your staff. Preparing training materials enhances the patient-provider experience, leading to more on-time payments, higher retention rates and an improvement in workflow.
No one likes tracking down copays, coinsurance and deductibles, but medical expenses are a part of the business. Unfortunately, many HME providers struggle with the best approaches to collect payments.
When you say goodbye to the challenges of trying to maintain a profitable business, such as staffing issues, lack of automation, reduced cash flow and inefficiency, you’re able to return your focus where it belongs: patient care. By securing a card upfront, automating internal processes, moving your business online, using customized invoices and communicating with staff, you can boost profitability, gain a competitive advantage and breathe a giant sigh of relief.