The patient is now the number three payer behind Medicare and Medicaid so many healthcare organizations are utilizing pre-collection techniques as a preventative to writing them off to bad debt or uncompensated care.
But sadly, many early out medical collections employ the very same tactics that debt collection agencies utilize. And the results are not dissimilar to ones that debt collection agencies deliver. The punitive approach of collection agencies doesn’t drive better results, and instead, hospitals and healthcare providers should begin the process of early out collections.
What Are Early Out Collections?
Early out self-pay is the process of connecting and engaging with patients throughout the entire patient financial life cycle. This starts with clear communication during care and reaching out to patients early during the billing process, usually 30 to 60 days following.
In this age of healthcare consumerism, a successful early-out program must be designed around the patient’s needs.
Patients can and do shop around, and even if they have a great clinical experience, if their billing and payment experience doesn’t match, you will quickly lose them to another practice. Treating the patient with dignity and respect gives you the opportunity for dialogue – to learn more, connect with your patient, and keep them as a customer.
With patient responsibility projected to climb to 50% of the healthcare dollar in the next five years, it’s time for your revenue cycle management team to go all in on early out. Effective early out programs require a new approach, new technology, different processes, and different staffing models to adjust to this change.
Become Patient-Focused and Consumer-Friendly During the Early Out Process
With the implementation of the Affordable Care Act, there are more people insured. But more people insured means more people who don’t understand their health insurance and many of the plans on the healthcare exchanges are high deductible plans.
Patients believe they are lowering costs with a plan they’ve purchased on a healthcare exchange, but when it comes to actually going to the doctor and getting their bills, there is suddenly a lot of confusion as to what their coverage actually is.
Many consumers prioritize their bills – pay the electric bill first, cable bill second – how can we get them to add their medical bill to the list? Most patients want to pay their bills, but it requires a level of education.
Successful Early Out Strategies Require Focusing on the Patient Before They Ever Walk in the Door
Nobody likes surprises. Educating patients before they visit can prevent delays, reduce denials, and enhance patient satisfaction.
When scheduling appointments with patients, take the opportunity to inform them of their potential responsibility. 75 percent of patients say that understanding their out-of-pocket costs improves their ability to pay for healthcare.
Use pre-registration calls to gather information that will help streamline check-in process. Verify insurance to get the most up-to-date and accurate information. Online registration via a patient portal can empower patients to complete paperwork prior to their visit simplifies check-in and can create a smooth early out process.
Provide Consistent Communication Throughout the Entire Patient Payment Process
Continued consistent communication with your patient on the day of care can help them understand their insurance coverage and responsibility. When they arrive, make every effort to collect as much as you can up front, but also inform patients of what their options are. Are financial assistance programs available? What about payment plans? Set expectations for what’s to come in the form of billing statements and how patients can pay.
When it’s time to send a bill, try to follow HFMA guidelines for “Patient Friendly Billing®.” Bills should be clear, concise, and correct. Deliver statements electronically when possible and consolidate payments if you can.
Self-Service Frees Up Your Billing Staff
Today’s consumer values self-service capabilities above most other resources. Providing multiple ways to pay – such as point-of-service kiosks at time of service, online patient payment portals, and interactive voice response (IVR) – can empower your billing staff to focus on what they do best, bill insurance.
Accepting credit and debit cards can further optimize patient collections and improve cash flow.
Consider Outsourcing Your Payment Process
As noted, many organizations’ billing departments are set up to bill insurance, not patients. Yet 35 percent of incoming patient calls are about their bills.
If your billing department isn’t set up to deal with the increased volume of patient calls and follow-up, you may want to consider outsourcing your patient pay component. Cost is often a concern with outsourcing, but be sure to factor increased revenue and found insurance.
Cost Savings and Benefits of Early Out Collections
By employing a patient-focused and consumer-friendly strategy for early out collections, physician groups and hospitals can expect stronger reimbursement on patient balances.
- Educated patients pay their bills.
- Satisfied patients translate to higher Medicare reimbursements.
- Emphasizing customer service can also help verify insurance and uncover secondary or additional insurance.