The Patient as Payer
Position your practice’s efforts to meet today’s demands for time-of-service patient collections.
After reading this article you will know how to:
- Assess payer contracts for payment restrictions from covered beneficiaries
- Create balance due scripts for staff
- Develop patient billing and collecting efficiencies
- Determine best technologies to support patient collections
With the rise of high deductible health plans that place more financial responsibility for medical care squarely on patients’ shoulders, it’s no longer good enough to position your staff to collect $10 copayments. The patient is now the payer. And those patient payments can easily amount to thousands of dollars.
The performance of most practices in collecting patient balances ranges from sporadic to desultory. The sad truth is that if you don’t collect from patients at the time of service you stand to lose most, if not all, of the patient’s payment you’re entitled to collect. Here’s how to reposition your practice’s collection efforts to meet today’s demands for better time-of-service collections:
Determine what and when you can collect. Stop assuming that you must wait until the payer adjudicates the claim before attempting to collect from the patient. Most payers do not impose those restrictions. Waiting for adjudication significantly decreases the probability that you’ll be paid. Review your participation agreement with each payer to determine how, what and when you can collect from the patients they cover.
Train staff to ask for money. To date, our efforts to collect have largely been ineffective. But we have only ourselves to blame. Stop asking patients: “Would you like to pay?” Replace that ineffective question with, “How would you like to pay?” while looking the patient in the eye. Increase the odds of success by instructing your employees to start writing out a receipt for payment as they ask the question. Finally, help staff understand that asking patients for money does not run counter to good customer service; in fact, keeping patients informed about the money they owe is a sign of respect.
Collections as a fundamental job responsibility. Your front office employees are essential to an effective collections strategy – indeed, they are your practice’s “directors of time of service collections.” It’s no longer acceptable to employ someone whose skills are restricted to smiling and answering telephones. Hire and train front office employees with collections in mind. This position requires someone who is kind but compelling, with significant computer skills and, above all, the ability to multi-task.
Start a credit card on-file program. Remember the days of collecting patients’ credit card numbers on an old steno pad? Far from secure, that pad doesn’t engender patients’ trust and raises the risks of internal fraud. Yet the alternative – pumping out statements every 30 days – is labor intensive and expensive. Use technology to securely retain patients’ credit card data, whether it is for a one-time charge, or for regular installments on a payment plan. Banks, as well as software companies, offer this technology at a minimal cost.
Convert to twice-monthly collection attempts. Practices have historically negotiated monthly payment plans and transmitted statements once every 30 days. Why? Well, that’s the way we’ve always done it. It’s time to change: start collecting on a bi-weekly basis. Design the protocol to match the cycle of patients’ paychecks, or establish bi-weekly payment plans that halve the installment amounts but leave the balances due and payment schedule unaffected. You’ll have to process payments more often but the probability of collecting from patients increases substantially.
Classify patient balances as essential. Get away from pursuing “past-due” balances only; focus your efforts at any balance, regardless of age. Ask returning patients to pay account balances as they present to the front office. Additionally, train schedulers to accept credit cards over the phone so that when a patient with a balance calls to schedule an appointment, your scheduler can inquire: “Mr. Patient, I see that you have a balance of $XX on your account. Instead of dealing with it at your visit next week, why don’t we take care of that right now? I’m happy to accept a credit card over the phone, if that would be convenient for you.” Make the ‘ask’ a component of the schedulers’ standard scripts for patients with balances. Remember, if you don’t ask, you’ll never get paid.
Pursue pre-service collections. For all scheduled procedures and surgeries, query the patients’ financial responsibility during the scheduling process. Create a financial agreement that documents your charge, the patient’s discount (use that term, instead of “contractual adjustment”) and the allowable charge. Finally, incorporate the patient’s estimated responsibility into pre-service processes, and ask for that amount or a significant portion of it.
Reengineer your collections cycle. Even with improved collections at the time of service, you’ll never eliminate the need for back-office efforts. Focus on compressing your collections cycle – send statements out as soon as they become due (“day zero”); transmit statements twice a month; and put payment due dates on each statement. Establish a 90-day cycle for collection attempts before transferring the account to your third-party collections partner. Once you hit 90 days, you’ll need to up the ante to get the patient to pay. Sending out more pieces of paper beyond the 90th day merely adds cost and delay to your collections cycle but with little return.
Provide incentives. Consider paying a bonus to the employee who collects the most patient time-of-service payments in a quarter. Alternately, build teamwork by providing a one-time incentive for the entire team when collections exceed a goal you’ve set. Be aware that after a period of time, performance incentives can evolve into expectations; if that happens, staff may feel entitled to the “bonus” and lose motivation if they don’t get it. Above all, recognize that collecting at the point of service is not just a trend; it’s a staff skill important to your practice’s financial health.
Upgrade workstations. Historically, the front office has been the site of a dysfunctional work area – often a common storage area for the entire staff. Do the oldest and most-used computers end up in the front office only after they’ve cycled through the rest of the practice? Are all of the staplers stored at the front office? If you listed your investments of time and money into efficient work areas, where would the front office end up? Is it at the low end? If so, it’s time to make the front office much more than a “desk.” Evaluate the team’s workstations to make sure they contain the following features: dual monitors; monitor screens large enough for reading and reviewing multiple documents; computers with sufficiently high processing speed; ancillary equipment (such as scanners and credit/debit card swipe terminals) within arm’s reach; and training materials for staff to quickly reference when needed. Find areas away from staff workstations to store common supplies and equipment. In the process, you’ll transform the front office into an area for greeting, registering, and collecting from patients.
Expect more refunds. Inevitably, your increased efforts combined with the occasional mathematical error or a misinterpretation of a health plan’s financial structure will produce some over-collections requiring refunds to patients. Refund processing can raise the risks of fraud by a dishonest employee, especially if your internal financial controls are weak. Despite the risks, attention to management, internal control of funds and good execution will assure that your collection efforts produce far more benefits than downsides.
It’s always been a challenge to collect from patients but trends in health care insurance are making this an increasingly important activity. With careful planning, your investment of time and resources to improve collections – both time-of-service and pre-service – can pay off, and pay off well.
Pearl: Work Smarts
Provide your employees who greet, register and receive patients with workstations equipped with dual monitors, monitor screens large enough for reading and reviewing multiple documents, computers with sufficiently high processing speed, fast internet hookups, and training and keep reference materials close by. Make sure that ancillary equipment (such as credit card swipe modems and scanners) is within arm’s reach.
Pearl: Refund Fundamentals
Refund checks are ripe for fraud because they can be intercepted by mail thieves who, after altering the payee and amount lines, can cash them at a bank. Consider issuing patients check cards for refunds or creating a separate account for issuing refunds so that an ambitious mail thief cannot drain your operating account.
Pearl: Peak Performance
If you offer performance incentives for time-of-service collections, be wary of making the program permanent. The incentive could morph into an expectation among employees. Look for non-cash incentives, such as a staff lunch or gift cards, rather than an addition to the paycheck, to recognize outstanding performance. Focus on team awards to avoid the potential of bad feelings between coworkers.
Send patient statements twice a month – the potential boost in collections will be worth the extra effort. Switching payment plans to twice-monthly installments will encourage better compliance without changing the balances due or extending the payment schedule.