Nearly 21.8 million people were enrolled in health savings accounts/high-deductible health plans in January 2017. That level of enrollment represents an increase of 1.7 million enrollees over the prior year. Not only has there been an increase in high-deductible plans, but the deductible amount is growing. The annual deductible for a single individual most often ranges from $4,000 to $7,500.
This means, in most cases, the first collectible dollar comes from the patient—continuing the shift from the long-held practice of billing the insurance company and receiving payment from the payer. Continued increases in patient financial obligations make the task of collecting outstanding balances more difficult.
Over the past year, in addition to the shifting payment responsibility, there have been several policy changes that may impact practice collections. Cost-sharing reduction (CSR) payments were previously provided by the federal government to reimburse health insurance plans to mitigate out-of-pocket costs for enrollees with plans on the individual exchanges. However, CSR payments have been terminated as of October 2017.
As a result of the termination of CSR payments, some insurers have decided to impose surcharges on premiums for these plans (ranging from 7.1% to 38%). Many insurers discontinued offering plans on the exchange altogether. These changes are expected to cause an erosion in exchange enrollment, increasing the number of self-pay patients practices may see.
In light of these evolving circumstances, and the challenges practices now face, PYA has identified four strategies practices can implement to maximize collections in the face of these challenges.
- Ensure verification prior to non-emergent visits
With increased patient obligation, it is important to ensure practice staff obtain the information necessary to verify insurance coverage prior to appointments or delivery of services. This verification process allows staff to identify any coverage issues or limitations prior to a patient visit. When coverage and financial responsibility have been verified, staff are able to provide patients an estimate of their out-of-pocket costs prior to the delivery of service. This information allows patients to make informed decisions and provides an opportunity for the practice to collect a portion, or the entirety, of the estimated amounts due at the time of service.
Exchange plans have the ability to cancel coverage if patient premiums are late. It is now even more important for practices to inform patients verbally, and in writing, of the financial responsibilities the patient bears under his or her current plan and in the event of lapsed coverage. When financial counselors and staff assist patients in estimating costs and understanding benefits on the front end, they eliminate confusion and reduce the likelihood of lost revenue in the future.
- Emphasize up-front, point-of-service collections
Many practices still bill the patient for the entirety of the patient responsibility after services have been rendered, despite the fact this practice decreases the likelihood of getting paid. This approach is especially true for diagnostic tests and procedures.
Practices should implement policies that require some portion, or all payment, at the time of service. Staff and providers should be held accountable for adhering to such policies. Failure to collect amounts for which the patient is responsible is not only detrimental to revenue, but can potentially be in violation of your payer contracts.
- Provide payment plan options and financial counseling
Financial counseling is another important means of providing the patient with information on payment policies and plans available. Consider designating an employee to serve as the financial counselor for the practice.
Patients with high deductibles may have difficulty paying large balances all at once. Third-party medical financing options or internal payment plans can be beneficial in the collections process, as they allow a patient to pay off a large balance over time. Third-party financing will offer the ability for patients to finance larger balances, while eliminating the risk of non-payment to the practice.
Practices with minimal high-cost procedures and diagnostic testing, however, may not meet the criteria for partnering with a third-party financing vendor. Therefore, internal payment plans may be the best solution for large patient balances. However, practices should allow no more than 6 to 12 monthly installments (tier payment periods based on balances) and consider a secure “credit-card-on-file” policy for all patients on a payment plan. This allows for automatic debiting from the patient’s account on a selected date each month.
Educate designated staff on expectations and equip them with the tools necessary to have these financial conversations with patients. Payment and financing can often be sensitive subjects, so ensure staff speak courteously and professionally while simultaneously making patients aware of the practice policies.
Many practices offer scripts for those staff who interact with patients in-person or via phone during the collections process. If your practice offers payment plans, provide staff with details on payment plan options so they can best communicate with patients. If consistently requesting payment has not been a standard practice for your organization, it may be a difficult transition for staff. Make sure the messaging around the new policy comes from the top down. Incorporating collections goals into both manager and staff goal plans can also drive accountability.
- Communicate with patients
When a practice policy is changed, it is important to let patients know as soon as possible to avoid any confusion or patient satisfaction issues. This can be accomplished by contacting patients three to five days prior to their appointments and letting them know their estimated costs and new practice policy. Practices may also add signage near the check-in/check-out areas. If your practice uses a patient portal, consider sending appointment reminders along with messages regarding the new patient financial policy. Regardless of the method used, setting patient expectations is key.
There are many steps for ensuring the accounts receivable (A/R) collection process runs smoothly. While practices may be effective at charge capture, coding, claims submission, and A/R follow-up, time and effort must be dedicated to patient collections so that practices sustain break-even margins or profits. The trend in high-deductible health plans appears to be the “new normal.” Therefore, the most successful practices will place sufficient emphasis on the patient collection cycle.
If you would like more information about strategies you can deploy to optimize patient collections, or would like assistance in any matter involving physician enterprise operations or strategy and integration, contact one of our PYA executives below at (800) 270-9629.
 America’s Health Insurance Plans (AHIP). Health Savings Accounts and High Deductible Health Plans Grow as Valuable Financial Planning Tools. April 2018.
 Henry J. Kaiser Family Foundation. Analysis: ACA Silver Plan Premium Increases from 7% to 38% Attributed to End of Cost-Sharing Payments. October 2017.
© 2018 PYA
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