As Patient Cost Shifting Rises, Are You Prepared To Manage The Process?
By Leonard Wenyon, Vice President of Solutions at IKS Health
Revenue cycle management (RCM) is the lifeblood of any healthcare provider; however, inefficient workflows, poor training, frequent staff turnover, and the lack of actionable intelligence can lead to providers leaving revenue uncollected. Now there’s a growing trend affecting RCM — the cost shift to patients.
A receivable many organizations were content to leave on the table in years past as insurance payments offset the cost to collect; today healthcare organizations accepting lower reimbursements can’t afford to leave dollars on the table. Patients are becoming more financially responsible for their healthcare costs. The lower cost of monthly premiums has come with higher cost of patient deductibles and copays. According to a survey by the Healthcare Financial Management Association (HFMA), out-of-pocket patient financial responsibility has increased by 10 percent over the past five years. As patient cost-shifting continues to rise, healthcare organizations are struggling to improve patient financial responsibility processes all the while wanting to uphold doctor-patient and organization-patient relationships.
During the 2016 open enrollment period, the Centers for Medicare & Medicaid Services (CMS) found 90 percent of the 12.7 million consumers in the health exchange program selected a high-deductible plan. Under these plans, patients have paid 225 percent more in out-of-pocket expenses since 2006. Those who are generally healthy tend to choose high-deductible health plans with low, affordable monthly premiums. In many cases, the patient isn’t well informed about the financial responsibility tied to their health plan. Patient education must extend past a conversation of health and well-being and include a crash course on financial responsibility prior to services performed.
There are many ways healthcare organizations can improve their revenue cycle management; it starts with a well-trained front office staff. Here are tips to improve your RCM in today’s changing system.
- The front office staff must not only be comfortable in explaining a patient’s financial responsibility prior to their appointment, but must also be able to collect payment.
- Establish a Point-of-Service collection system that works for your practice.
- Front office staff must be properly trained in the intricacies of submitting efficient claims.
- Develop a system to manage and correct insurer denials within the first five days to correct claims and ensure timely payment.
- Establish a process to manage accounts receivable and improve collection process.
- Simplify medical statements so that patients are able to easily understand the charges and feel comfortable paying them.
- Provide patients with options to submit payment electronically — whether it be an online portal or a call-in system.
- Work with the patient in advance to arrange a payment plan for large fee procedures.
- Wherever possible, utilize your patient portal payment functions for ease of payment submission.
Setting expectations and establishing accountability for patients falls heavily on the front office staff. Patients are more prepared to pay upfront costs or make payment arrangements when they have been informed of their financial obligations in advance.
Once the patient has left the physician’s office, the window to collect payment begins to shrink. According the Medical Group Management Association (MGMA), medical debt that is 0-30 days has a 90 percent chance of being collected, 31-60 days is at 80 percent, 61-90 days is at 70 percent and continues to decrease by 10 percent for every subsequent 30 days the debt isn’t collected. In addition, the longer it takes to collect payment, the more costly it becomes.
As the healthcare landscape continues to evolve, it’s no surprise that patients are now shouldering more of their healthcare costs than their employer.
About The Author
As Vice President of Solutions at IKS Health, Leonard Wenyon is responsible for client solutions, improving margins, and positioning clients for revenue growth. Wenyon and his team focus on driving client’s margin performance through onsite analytical analysis of current operations including system implementation, front and back office processes to include benchmarking their current workflows. His team works clients to develop best practice solutions and implementation plans that will enable clients to achieve best in class outcomes. He has been working in the healthcare field for more than 15 years, managing both revenue cycle management and clinical Operations. Wenyon has a Bachelor’s of Science degree in Accounting from Boston University.