Point-of-service payments reduce self-pay balances, and lead to revenue cycle improvement
Would you like to increase cash flow and see real, lasting revenue cycle improvement? Reduce bad debt? Significantly shorten the accounts receivable cycle? It might all be easier than you think.
In recent years, patient financial responsibility has increased significantly as a result of higher co-pays and deductibles. America’s Health Insurance Plans (AHIP), the national trade association representing the health insurance industry, projects that this trend will continue well into the foreseeable future.
Not surprisingly, this increase in patient financial responsibility has led to an associated increase in bad debt for hospitals and other healthcare providers. To prevent future losses of this nature, hospitals and other healthcare providers are increasingly turning to point-of-service payments in order to see meaningful revenue cycle improvement.
Money collected up-front, prior to the delivery of service, is money that will not have to be pursued later. This both increases cash flow and reduces the cost of eventual collection efforts. In short, it’s a win-win situation.
Helping your staff get started
One of the most common obstacles to adopting a point-of-service payment strategy is the reluctance of registration staff to ask patients for payments. And, unfortunately, one of the most significant sources of bad debt, the emergency room, is also one of the most emotionally challenging for staff who must attempt to collect co-pays up-prior to the delivery of services. Both of these serve as obstacles to revenue cycle improvement and increase not only collection efforts, but bad debt for healthcare organizations.
There are several very simple, and very direct, ways to address these concerns. First, remind registration staff that point-of-services have become increasingly prevalent in the healthcare industry. In time, payment at the desk will be the rule, rather than the exception.
It’s also helpful to be open with your staff about the economic realities of bad debt and the advantages if improving cash flow. What is good for the organization is ultimately good for the members of its team – and vice versa. Job security, raises, benefits, etc. all become more tenuous if the organization is not financially healthy. Revenue cycle improvement is something that all staff should be aware of from a goal perspective, and you should work to educate and encourage buy in for revenue cycle improvements efforts.
Additionally, it is often beneficial to train registration staff in the proper handling of patient fee requests. Asking for payments can be difficult, as can effectively countering patient objections. For example, when asked for payment, a patient might state that he or she does not have the requested amount. An effective response to this sort of objection is to ask the patient how much he or she can afford to pay at the present time. Coaching and role playing can serve excellent instructional tools in the learning process, and can help to increase staff comfort level and performance.
Finally, consider offering incentives for payment collection. Money is a powerful motivator. When developing an incentive plan, be realistic. Setting unattainable goals can de-motivate your staff. Initially, some fine tuning may be required to find the optimal balance of reward and outcome. Also, make a point of communicating with your staff. The more they know about the incentives you offer, the more likely they are to seek them. Additionally, consider contests and encourage competition. And of course, share the good news. It drives home the reality that people really are being rewarded for their efforts. Recognition is also a very powerful motivator.
Setting up systems
To the greatest extent possible, begin to set patient expectations as early in the process as possible. Let them know what is expected of them in terms of co-pays, deductibles, and (if applicable) outstanding balances. Of course, this only applies to non-emergency services. But for planned visits and procedures, contact patients ahead of time, via a letter, email, or phone call. And be sure to understand patient communication preferences. Young patients may prefer an email or other digital reminder, whereas more mature patients may prefer a letter or the personal touch of a phone call.
Increasingly, healthcare providers are implementing online patient portals that help patients understand their responsibilities, and which provide the opportunity to make electronic payments via credit/debit cards, e-checks, etc. In addition to providing a convenient and effective payment tool, patient portals can help to improve patient relationships by providing convenient (but secure) assess to important information. Patient portals also enable online pre-registration, which can both speed and simplify the check-in process at the registration desk.
And if you’re not sure what a patient’s co-pay or deductible should be, simply refer to the requested amount as a deposit. Your organization can determine appropriate amounts based on the type of service to be delivered.
For patients with high deductibles, you may also consider offering payment plans, which provide patients the opportunity to make payments over time, rather than demanding full payment in a single lump sum.
Are you ready to experience revenue cycle improvement within your organization?
Contact BHM today to learn more about patient payment optimization and other solutions that can help you dramatically improve your bottom line. Simple click below to get started and receive a proposal or complimentary one hour consultation.