Identifying and dealing with potential patient payment issues preemptively and professionally …is the most important thing a practice can do to preserve its fiscal health.
Covering the unreimbursed portion of healthcare costs in this era of increasingly high deductibles, copays, and under- or uninsured patients is not only the patients’ problem - it is yours. Simply put, just because a patient is insured does not mean the insurer is responsible for payment. Patients don’t really know what is coming, but they do know what they are facing today, which is why new options to cover high deductibles ranks third on my list of 10 new patient expectations. It should be first on the list of providers.
According to Simplee, which tracks patient out-of-pocket costs by monitoring $200 million in medical billings, the average family of four spent $962 in copayments in the first quarter of 2012; this is up 3.3 percent from the same period in 2011. Out-of-pocket costs have more than doubled in the past five years, but, the real number to focus on is nearly $250 per person per quarter, or fast approaching $1,000 per person per year - and accelerating.
This creates a real hardship for most people whose family or personal budget is already stretched. Worse yet, most people are unprepared. Also unprepared are practices faced with having to collect an increasingly large proportion of their fees from financially stressed patients.
Patients are not likely to see relief from this financial burden, and instead will likely see it intensify. This is because employers, which provide most health insurance as benefits, when given the choice of being the bad guy by reducing employees’ take home pay to offset higher premiums or passing the problem to patients and providers by increasing deductibles, overwhelmingly elect to pass the buck, quite literally.
It is the elephant in everyone’s room, and it will grow whether or not the Affordable Care Act (ACA) is upheld. The unpleasant reality is that if the reform law is upheld, the out-of-pocket cost of care will be even less affordable because all of the goodies come at a cost, and the increased cost will largely be passed on to employers, who will pass the cost on in the form of higher deductibles and, ultimately, the patients and providers who will have to collect it from them.
The number of healthcare providers who are losing money is approaching 25 percent and, overwhelmingly, their problem is not revenues, it is cash flow.
Here are some suggestions on how to increase cash flow, reduce patient bad debt, and increase patient satisfaction by avoiding surprises, misunderstandings and adversarial collections actions:
1. Focus on front end processes.
a. Understand patients’ insurance and where they are in their deductible cycle.
b. Ask if they have any questions, concerns or challenges in covering their portion of the cost of their care, and, wherever possible, quantify what they will personally owe.
c. If they do, let them know that you can help and show them the way.
2. Focus on cost to the patient - which extends beyond the literal price.
3. Include additional expenses to the patient as a subject when discussing treatment plans, particularly with high cumulative cost areas such as diagnostics, physical therapy, home healthcare, and hospitalizations.
4. Emulate elective care providers such as dentists and cosmetic surgeons.
a. Assign (or hire if the practice is big enough) a staffer to help patients with their financial challenges.
b. Offer financing options include CareCredit®, Chase Health Care Finance, and GE Health Care Finance to spread payments or provide a revolving line of credit.
c. Help patients start and fund a qualifying HSA or MSA by recommending they seek specific instruction from their employer’s HR department or from their insurance company.
d. Communicate, eliminate misunderstandings and uncertainty and help patients to fulfill their obligations. For example, avoid negative and confrontational language by replacing terms such as, "I want you to…" with, "Here are some options for you…;" "I need" with, "Did you know you could…;" and, "We require" with, "May I suggest…"
5. In all cases, conduct these conversations IN PRIVATE.
Identifying and dealing with potential patient payment issues preemptively and professionally, and getting very good at it, is the most important thing a practice can do to preserve its fiscal health.
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