...Uncollected receivables related to CDHP are forecasted to reach $38B in 2008 growing to $82B in 2012
...$0.38 of every physician dollar is related to bad debt
...Approximately 12% of healthcare spend is the patient’s responsibility and growing*
Increased patient co-pays, coinsurance and deductibles both for traditional insurance plans and consumer driven health plans resulting in increased provider administrative cost to collect based on current payment collection processes.
The increasing shift of financial responsibility from employer and health plan to patients requires providers to manage their accounts receivable more efficiently. Providers can no longer rely solely on current back end billing processes and on private insurance or government programs for the bulk of the health service payments. Providers need to implement ways to identify patient responsibility prior to, or at the point of, service and begin to stave off the increasing administrative cost related to collecting patient payments.
The patient landscape is also fast evolving to where the member is not just a patient but is a retail consumer. As with any retail environment, consumers are beginning to shop around for services. In order to maintain a competitive edge and ensure streamlined administrative costs, providers need to provide an efficient solution for cost and quality transparency of their services.
Providers are starting to implement ways to identify patient responsibility prior to the patient leaving the office and are beginning to ensure the patient has a true understanding of their financial obligations at the time of service. Several industry solutions offer providers the ability to estimate patient cost of service delivered – either before or at the point of service, based on a combination of provider historical paid claims data, provider contract rates with payers, patient benefit information or fee schedules. Adopting these solutions gives the provider the ability to understand patient responsibility and set the expectation with the patient for payment. The impetus for the payment assurance solutions in the industry is to enable and empower the provider with patient responsibility data, as well as to enable the provider to understand the patient’s ability to pay and to complete the cycle by enabling the patient collection. All of this can be accomplished with decreased administrative burden to collect payment.
Research has shown that if a patient expects and understands their responsibility, they are more likely to make plans to pay for the service; and a provider’s chances of getting the patient payment is highest when they present it to the patient at point of service so a payment plan can be setup prior to a patient leaving the office.
Patient responsibility and financial liability solutions will not only increase upfront collections, but it can also directly impact the ability to collect efficiently post-discharge, including how to direct outsourced collections efforts. In addition, it can also streamline efforts to qualify patients for charity care and government programs and ensure that charity practices are implemented consistently. For everyone's benefit, patients who qualify for charity discount programs can be enrolled in them right away, on the front end, saving both parties time and money.
Point of Service collection encounters can be successful even if you don’t get a dollar, as long as the patient walks away from the office understanding why he or she owes the $200 and thinking about how to pay it. At this particular juncture in the consumerism movement, educating the customers of their financial responsibility is just as important.
Provider offices must be prepared not just to deliver accurate and timely information about a consumer/patient’s benefits on the spot, but also to explain that information in terms that make sense to the consumer, to listen to the consumer’s response and react appropriately, and then to bring the conversation to a close in that satisfies both parties.
Patients are beginning to carry the majority of uncompensated care, yet most provider offices lack the necessary tools and technology to optimize patient collections, or to ensure that charity care and public assistance patients don’t fall through the cracks. With the increasing number of patient out of pocket payments, providers will need to adopt solutions to better understand patient responsibility and begin to have the conversations with patients about their out of pocket costs and payment plans in order to maintain a viable revenue cycle.
*Source: March 2007 Kaiser Commission on Medicaid and the Uninsured & Forrester March 7, 2005 report on Will Health Plans profit from HSAs; nTelagent April 2008 report
