Workable payment plans can’t be too burdensome and should take into account FICO score, 90-day payment history and any residual or related income.
Hospitals, take note — patients want to pay. They’re not always in the best position to fulfill their financial responsibility, but given the right options they’ll do what they can to tie up loose ends. Hospitals make more in front-end collections when patients are extended that olive branch.
A number of different approaches exist. Georgia-based AnMed Health favors a billing experience that uses personal income as a threshold, allowing flexibility to those at 200 percent of the federal poverty level. Other models take a more personal, case-by-case approach, hewing less to income and more to the overall circumstances surrounding a patient’s ability to pay.
At least one expert says that advocacy is at the root of a billing experience that benefits both patient and provider.
“Patient advocacy has been commoditized,” said David Shelton, president and chief operating officer of PatientMatters, a company that has focused on patient advocacy for decades. “It used to be wrapped around individuals who needed to be connected or had self-pay challenges. Now, it’s the relationship the hospital has with the patient. Patient advocacy is now a two-fold deal. The hospital’s got to be able to collect all the money it can, and the patient, in my experience, wants to meet their obligation. But they need the hospital to be more specific about what their obligation is.”
To that end, Shelton has noticed hospitals having success by offering personalized payment plans, using a combination of technology and on-site expertise to more fully understand each individual patient. PatientMatters’ own proprietary software features an algorithm that scores patients from a 5, those who are least likely to pay, down to a 0.5 — those who could cut a check for the entire bill on the spot.
“Other patients, no matter what, won’t be able to fulfill their obligation,” said Shelton, “and if you pressure them all it does it take that patient and put them in a position where they’re going to delay service or even skip it because they think they have a financial challenge they’ll never overcome.”
Some things to consider when crafting a personalized payment plan are the patient’s FICO score, 90-day payment history and any residual income they make. An ideal payment plan can’t be too burdensome because the patient will stop paying if it is. One thing that’s helpful, said Shelton, is providing a script for the registrar. Oftentimes among the lower-paid employees of a healthcare organization, registrars appreciate being given the tools to be successful, and lending them the assist not only helps with improving collections, but increases their job satisfaction and minimizes turnover.
Northeast Alabama Regional Medical Center in Anniston has followed the PatientMatters approach for a couple of years now, and according to Bruce Turner, director of revenue cycle, the return on investment has been substantial, and is still on the upswing.
“The portion that’s receivable from the patient continues to grow,” Turner said. “It was very important for us to be able to capture that revenue.”
What made it so important, he said, is the hospital’s size. Small, community hospitals are increasingly struggling to stay above water as mergers and consolidations make the landscape more favorable for large entities. RMC has improved its fiscal standing by meeting patients halfway, crafting payment plans that strike the balance between affordability and profitability.
Partnering with PatientMatters gave the hospital access to technology they wouldn’t have been able to utilize otherwise. They can now prepare statements and run patient eligibility right when a patient calls in to schedule a service.
“We tell them an estimate of what they’re going to owe at the time of service,” said Turner. “That’s the main thing that’s been so critical. When you let people know ahead of time, they’re not caught blind by it on the back end. A lot of people don’t know what their insurance is going to say, so it helps them prepare to pay part or all of it on the day of service.”
When the hospital’s fiscal year comes to an end in June, it will likely see a tenfold increase in its upfront collections since the approach was first implemented. And patients have been greatly appreciative.
“We haven’t had a lot of fallout from our patients,” said Turner. “They’re aware healthcare costs are increasing, so they have reacted more positively than I thought going in. That’s increased our cash flow of course, because we’re receiving the money earlier in the revenue cycle. We’re saving money on not sending statements. And of course, we’re going to see lower bad debt. We’re a small community hospital, so every dollar matters.”
What an approach like this does, said Shelton, is move the healthcare industry closer to retail and other sales industries in the ability to be flexible and work with the customer. That aligns with the industry-wide trend toward consumerism, in which patients vote for their favorite healthcare institutions with their wallets, based largely on service and ease of use.
“The patient base is going to appreciate that they’re now having the same conversation they’re having with everyone else, whether it’s buying a car or a cup of coffee. There’s no ambiguity. That’s going to allow the hospital to accelerate their cash, and also change how the patient population views their hospital.
“The consumer now can have a choice of where to shop,” he said. “If you told that customer out of the gate, ‘That knee replacement going to cost this,’ they have confidence coming in, barring any complications from the surgery.”
Whether a hospital finds a technology partner or decides to go it alone, a successful shift naturally comes from the top down. The CEO has to be on board, and the processes have to be communicated effectively to both patients and to the hospital’s internal staff. Lasting, impactful change occurs from the inside out.
Sometimes that change can be painful, said Shelton. But it’s worth it.
“You’ve got to be able to have direct conversations with individuals,” Shelton said. “We want to know what we owe, what we cost and what it’s going to take to get through this, and not be put into a generic box.”
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Stockell Healthcare Systems
(The Revenue Cycle Division of Medsphere Systems Corp)
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