The effects of rising healthcare costs and the domination of high-deductible health plans have given rise to a new landscape in which healthcare systems and providers must navigate bumpy roads in order to increase hospital collections and patient payments.
In stark contrast to healthcare revenue cycle processes just five years ago, patients now carry higher financial responsibility than ever before, often greater than that owed by the payer. Hospitals used to rely on insurance companies and government organizations to submit prompt payments, which was a more straightforward approach to increase hospital collections. Now, hospitals have become dependent on the large chunk of revenue owed by the patients and must find ways to increase their propensity to pay.
Have Health Systems Adapted Their Healthcare Revenue Cycle Processes to Increase Hospital Collections Effectively?
Yes, and no. While some hospitals are actively incorporating meaningful revenue cycle management software and implementing staff training to help increase hospital collections, there is still considerable room for improvement. Even more so for the health systems and hospitals that are not adjusting the hospital revenue cycle process to fit this new payment model.
Compounding the magnitude of this problem is the fact that healthcare costs are sharply increasing for patients with out-of-pocket annual costs averaging $1,813 in the final quarter of 2017 according to a TransUnion Healthcare survey. This alarming figure represents an 11 percent increase from the prior year. In light of this data, it may come as no surprise that the study also reveals that despite the fact patients owe more to their providers, nearly 70 percent of patients that owe $500 or less in medical bills never fully pay what they owe to hospitals.
How can a hospital adapt processes to increase revenue flow? Keep reading to learn three revenue cycle management (RCM) tips to increase hospital collections.
1. Diligently track and report on collection statuses on a monthly basis with meaningful use of healthcare analytics
Charles “Chuck” Duva, MD, CEO of DuvaSawko Emergency Medicine Billing, offered advice in an article published by Becker’s Hospital Review on three monthly reports that hospitals should run, which are:
- “Rolling Accounts Receivable Aging Bucket” – The hospital billing department needs to track and follow up on all denials and report to revenue cycle managers which denials are occurring most often and have the greatest impact on hospital revenue.
- “Rolling Accounts Receivable by Payer per Provider” – To effectively track past-due payments from patients and secondary and tertiary commercial payers, this specific data should be monitored and efforts made to collect on monies owed.
- “Trend Analysis of Dollars Collected per Relative Value Unit per Payer“ – Reporting on this data helps to ensure payments are received from contracts with government and commercial carriers.
2. Improve Patient Access Processes with Staff Training and Smart Revenue Cycle Management Software
When it comes to the hospital revenue cycle, smart patient registration practices are critical for financial health. It’s at this point in the stage of care that staff members have the opportunity to perform all the following actions which can help increase hospital collections:
- Determine whether a patient qualifies for charity care or alternate payment sources
- Educate the patient on their financial responsibility and provide pricing estimation
- Request and collect point-of-service payments
- Obtain pre-authorization and medical necessity for services, etc.
- Set the expectation for customer service to improve patient satisfaction
- Verify insurance benefits and eligibility
- Apply special discounts
- Establish patient payment plans
- Resolve outstanding account balances
By using revenue cycle management software with built-in intelligent guidance, even if a staff member has not been adequately trained, the program will prompt them to request specific information and to ask the patient for point-of-service collections at key points during the registration process.
3. Customize Flexible Patient Payment Plans Tailored to their Needs and Ability to Pay
Patient financial responsibility and the establishment of a payment plan that works with the patient need to occur during the first encounter along the care continuum. In the past, patients would complete registration, receive care services, and then receive a bill weeks later without any idea prior as to what the costs will be or how they are supposed to pay. In the days when patient financial responsibility comprised only a minuscule portion or even nothing of the final amount owed, this system might have worked – back then.
Not anymore! Patients often have no clue what their healthcare service is going to cost them, so it’s important that expectations are clear and the patient is empowered to opt for a payment plan that fits their needs. Also, hospitals should be ready with revenue cycle management solutions that have convenient payment options built-in, allowing the patient to pay by cash, credit card, e-check or even online from the convenience of home.
A study published in the Journal of Healthcare Finance in the fall of 2017 (PDF) demonstrated that patients who were offered zero percent interest payment plans tailored to their ability to pay were:
- Less likely to skip doctor or clinic visits than the general population (30 percent vs. 41 percent)
- Less likely to skip medical tests, follow-ups, and treatments recommended by the care team than the general population (33 percent vs. 38 percent)
- More likely to experience improved social outcomes
- More capable to pay for necessities like food, water, and heat than the general population (26.5 percent of the general populations reported being unable to cover these costs, while 14.4 percent of patients with payment plans were unable)
Are you ready to make your hospital’s front line of defense as aggressive as possible with robust patient access software? Request a demo today to see how you can help increase hospital collections with advanced revenue cycle management solutions from The SSI Group.