MEDICAL BILLING BLOG

Without any intention to sound like a broken record... there is yet more data indicating how critical it is for medical practices to have a solid patient collection process in place. A new survey indicates that health savings accounts are growing in popularity.  Both the number of accounts and the amount of money in those accounts are growing at a significant rate. A recent study from Celent, a consulting company that works with banks, showed that the number of HSAs increased 46.1 percent between January 2008 and January 2009, and the money in HAS accounts grew by 62.6 percent. HSA accounts have an average account balance of $1,561. This number is likely significantly understated because most banks do not consistently purge inactive, zero-balance accounts.

What does this mean for medical practices? It means that they need have a solid set of tools, processes and policies in place for collecting the portion of their income that is the patient's responsibility. Some of the key elements of a world-class patient collections process are:

1. A clearly communicated patient collection policy that is consistently communicated to patients before they see the doctor;
2. An automated insurance verification tool that allows the front-desk to easily verify coverage and confirms the key parameters of the coverage (deductible, co-insurance percentage, and the amount of the deductible met for the current year);
3. An easily used tool that allows the front-desk to inform the patient before he leaves the office how much he will likely owe after the claim is adjudicated. This allows patient to pay their portion of the healthcare bill before they ever leave the office;
4. Quick claim submission and follow-up so that patients that have not paid their bill before leaving the office can be sent a patient statement as quickly as possible after the date of service;
5. Well designed patient statements that eliminate many of the issues that cause patients to treat bills from physicians differently than they treat credit card or utility bills;
6. Payment processing tools that automate and monitor payment plans; and
7. A system for ranking patient balances for follow-up effort based upon expected collections - not simply on the magnitude of the patient balance.

If you medical practices has not invested in developing a world-class patient collection process then you are likely losing at least 10% of your practice's potential revenue.

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Copyright 2009 by Carl Mays II. Carl is President and CEO of ClaimCare Medical Billing Service, one of the largest medical billing companies in the United States.

The U.S. Census Bureau recently released a report revealing that the number of people without health coverage in the U.S. grew to 46.3 million in 2008, compared with 45.7 million in 2007.

According to the report, the number of citizens covered by private health insurance fell from 202 million to 201 million, and those with employment-based health insurance fell from 177.4 million to 176.3 million. The uninsured rate for native- and foreign-born people stayed about the same, with native-born persons at 12.9 percent, and foreign-born people at 33.5 percent. The number of uninsured non-citizens remained at approximately the same level, 44.7 percent uninsured. Meanwhile, the number covered by government health insurance jumped from 83 million to 87.4 million.

These finding reinforce the importance of good patient collections and bad debt management for medical practices. The expected collection levels from patients drops dramatically over time. Given this and the high rates of patient responsibility mean that a medical practice can easily lose 10% of its expected revenue to a bad patient collection processes.

The following articles can help you learn more about how to improve your patient collection efforts:

Improving Patient Collections

Patient Collection Tools

2009 copyright by Carl Mays II

Bad debt is on the rise according to a 2008 survey from Transunion. This survey reported that almost 80% of the hospitals responding indicated bad debt growth of between 6 and 20 percent in the past 20 months.

Other key survey findings include:

• Consumer Directed Healthcare Plans are a source of concern for hospital administrators. Almost 80% believe they will be a significant source of additional bad debt by the end of 2010.
• Hospital executives are spending a lot of time worrying about patient collection issues. Improving patient collections was the number one priority for over 40% of executives. Close to 20% have focusing on lowering bad debt as their top goal.

It is there therefore supremely important to collect well from the patients.  Clinics and practices need every tool available (basic and advanced) to streamline what is otherwise a very labor-intensive task:

• Better use of on-line electronic payment tools. The latest tools can make it easy for you to accept practically any form of payment on-line and for patients to pay in a self-serve manner.
• Have more than one credit-card reader if you're processing a lot of patients at the same time. If possible, install a card reader with a built-in check scanner to convert a paper check into an electronic one, debiting the patient's account that much faster.
• Develop and rigorously follow a policy concerning patients that cannot pay co-pays (and other prearranged payments) on the day of service. Will you tell them they need to reschedule? Will you call and collect payments before they arrive? If you see patients that cannot pay on the day of service then make it easy for them to pay you after the fact. Do not wait for the claim to adjudicate to ask for them to send the co-pay. Give them a patient statement showing the co-pay balance due before they leave the office. Include a pre-addressed payment envelope.
• Use a tiered approach to patient collections and match the collection effort not with the patient balance but with the expected payment. Credit Cards use this technique through the use of credit score. They know that a $2,000 balance on a consumer with a credit score with 720 is worth more to them than a $3,000 balance on a consumer with a score of 600. You can use this approach by looking at patients past payment patterns, healthcare credit scores (there are services that provide these) and/or employment status.
• Use a monthly bonus system for employees that collect patient payments in the office. Make the amount meaningful and the metrics clear and easy to track.

The tips and techniques above can help protect you from the growing specter of bad debt.

Copyright 2008. Carl Mays II