Patients Are the New Payers: Five Best Billing Practices to Engage Them Successfully

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By Jennifer Leon

Since the Affordable Care Act was passed in 2010, more providers have been experiencing a shift in healthcare revenue sources, especially as patient financial responsibility increases. Providers are now seeing patients becoming accountable for their healthcare costs more than ever. In fact, recent data confirms that today's healthcare consumer pays almost 35 percent of medical expenses out of pocket.1 That's triple the amount paid in 1980.

One of the primary drivers for this shift in patient financial responsibility is the rise in high-deductible insurance plans. According to The Kaiser Family Foundation, insurance deductibles have increased by 255 percent since 2006, and the average health insurance premium for family coverage has increased by 83 percent since 2005.2

The dynamic change in healthcare payer burden is challenging for many, making the need for strong patient engagement and communication even more important. With many providers focusing on patient experience, it's important for them to understand patients have become the new payers and tailor billing strategies accordingly.

As consumers bear a larger burden of medical expenses, providers have experienced increased difficulty in collecting outstanding balances from patients. Providers now expect to collect only 50 to 70 percent of a patient balance after a visit, according to a McKinsey and Company report.3 That same report also said that 36 percent of patients have a balance of more than 60 days past due, with more than 73 percent of providers saying it takes one month or longer to collect owed money.

To improve their rate of collections and improve the entire billing process, providers need to focus on restructuring their revenue cycle management strategies. It's possible that with the right technology and the right plan you can efficiently collect payments, preserve a good relationship with patients, and create an ideal billing experience.

Following are a few tips that will help increase cash flow, create a productive billing process, and hopefully lead to happier patients and staff.

1.  Develop an automatic payment program

It's not always popular with patients to collect a copay on the spot, but providers need to take advantage of that initial conversation to collect payment while they have patients' attention. The longer you wait to inform patients of their financial obligations, the more your labor costs rise to collect on that account. Patients will appreciate the transparency.

Communicating the expectation up front and having automatic payment plan options are the best ways to ensure you get paid and help to guarantee that it's the right amount at the right time. It's also important to keep any debt moving. If you're having trouble collecting, outsource billing items that are behind or that you cannot manage internally. Use the experts and send debt to third-party collection agencies when internal efforts are exhausted.

Provider benefits include reduced days sales outstanding, past due notices, and third-party debt collection.

It also lowers your hard costs such as postage, time, and labor, and increases patient loyalty. Patients are happier because of the ease and convenience since they have advance notice of charges, savings on postage, and they avoid late fees. Automatic payment plans are also easier for caregivers to manage.

2.  Automate processes

If you're still printing, stuffing, and sending statements, you're throwing money, time, and labor away. It's important to automate your manual billing process and, while you're at it, carry that automation to your billing systems to further streamline billing and collections. When your billing systems are tightly integrated, you'll have your insurance and patient financial information in one place, which saves valuable time by eliminating the manual labor involved in reporting, reviewing, and sending patient invoices.

This saved time allows your staff to concentrate on higher value activities. Automation helps create greater inventory control and accounts receivable management, which leads to processing more patient intakes and shrinking your cash flow cycle by days or weeks.

3.  Offer online billing

Most people pay their bills online rather than sending a check in the mail. Gone are the days of needing a stamp and envelope to make payments. So why should receiving and paying medical bills be different? For some reason, many providers still follow this route, creating a big missed opportunity. As the baby boomer population grows and relies more heavily on technology, there's a greater need for a quick and easy payment solution. In fact, a Deloitte annual survey found that 70 percent of respondents prefer to get their bills electronically instead of in paper form.4

Providers should consider moving their business online for greater efficiencies, patient convenience, and satisfaction. Not only will you reduce paperwork, you'll also reduce the labor it takes to individually process a payment. Online payments save time, create convenience for your patients, project a professional image, and boost the credibility of your business. By using online tools, patients get control of their finances, feel a sense of transparency, and enjoy the convenience of paying their bills from almost anywhere.

4.  Use customized statements

A big concern for many patients when they receive their healthcare bills is unfamiliarity with certain words or prices. That's why the simplicity of the statement itself is just as important as the patient's access to it. The right type of statement is simple to read, clear and concise, and sent out in a timely manner. Overwhelming statements may cause patients to ignore them.

The recommendation is to create a customized statement that will change the way your patients see their financial responsibilities and change the way they pay you. By having a clear and concise statement detailing what patients owe without all the extra insurance adjustments, payments, and credits, patients feel confident in the balance they are to pay. And, a follow-up patient statement sent after the insurance responsibility is paid further enhances patients' trust in the billing process.

Additionally, customized statements generated alphabetically throughout the month improve revenue flow, as due dates will be spaced out, versus generating all statements at once at month-end. It allows the billing team taking the inbound calls to pace the calls throughout the month instead of being overwhelmed with an influx of calls at once.

5.  Communicate to staff

Once you've decided to revamp some of your billing processes, it's important to communicate these changes. Some of the modifications to your billing policy/plan may seem easy enough to implement, but it's important to remember that even small changes can have a big effect on your staff, patients, and revenue. Give your staff a clear plan and powerful tools to prepare for conversations with patients. Provide them with step-by-step directions to follow and make it easy for them to gather information and feel confident engaging patients.

FAQs and resolutions to possible scenarios are also beneficial for your staff. Add training and consulting to make sure your staff is using best business practices. They'll thank you. By preparing materials and a process, you enhance the patient-provider experience, leading to more on-time payments, higher retention rates, and an improvement in workflow.

No one likes tracking down copays, coinsurance, and deductibles, but these are necessary parts of operating an O&P practice. Unfortunately, many O&P providers struggle with the best approaches to collect payments. When you say goodbye to the challenges of trying to maintain a profitable business, like staffing issues, lack of automation, reduced cash flow, and inefficiency, you're able to return your focus where it belongs: patient care. By establishing electronic payment plans up front, automating internal processes, moving your business online, using customized statements, and communicating to staff, you can boost profitability, gain a competitive advantage, and take a giant sigh of relief.

As Mistalyn Kuzov, accounts receivable supervisor, Ottobock Orthopedic Services, Tempe, Arizona, reports, "The electronic payment plans have reduced the time it takes our staff to manually track and enter payments. It has also given us the ability to make payment arrangements at time of service for those with high deductibles and patient responsibility. This has improved our patient collections and streamlined processes."

Jennifer Leon is vice president, Brightree Patient Collections, headquartered in Atlanta. For more information, contact info@brightree.com.

References

1.        Blendon, R., M. Brodie, J. Benson, D. Altman, and T, Buhr. 2006. Americans' views of health care costs, access, and quality. The Milbank Quarterly 84(4): 623-657.

2.        Henry J Kaiser Family Foundation. 2015 Employer Health Benefits Survey. https://www.kff.org/report-section/ehbs-2015-summary-of-findings/

3.        Pellathy, T., and S. Singhal. 2010. The next wave of change for US health care payments. McKinsey & Company. https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/the-next-wave-of-change-for-us-health-care-payments

4.        Deloitte. Deloitte 2017 survey of US health system CEOs. https://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/health-system-ceos.html