Best practices in mitigating the impacts of the increasing self-pay population

As healthcare evolves, so too must healthcare consumers, providers, and payors. Healthcare consumers have increased access to coverage through the new health law, as well as through cooperative efforts between employers, providers, and payors to provide more affordable coverage. Many of the new plans offer affordable premiums that unfortunately, come with high deductibles. As a result, patients are shouldering a greater share of healthcare costs. Because more of the payment obligation is falling to consumers, physicians need to maximize the efficiencies of their billing operations to effectively capture these dollars. The easy answer is to collect payment upfront, the obvious strategy for any business. However, upfront payment is not as straightforward a proposition for healthcare providers as it is for other businesses. Chris Pierce, director of business development for Zotec Partners, shares his perspective on how practices can cope with the impact of these financial changes by utilizing tools and metrics to monitor increases in their group’s self-pay percentage, to estimate patient responsibility at the time of service, and to analyze the success rates of their collection practices. 

Monitoring the changes

Both providers and healthcare consumers are accustomed to the usual mechanics of the third-party-payor system, involving presentation of an insurance card to the front office staff, small co-pays, submission of a claim to an insurer and an insurer’s reimbursement.  Patients are not used to paying the full costs of their healthcare, especially if they’re paying insurance premiums. Physician practices are typically set up to depend upon claim processing and payment by third-party payors, with patient billing occurring after claims are processed. Understanding the shifts that may be occurring in a group’s patient population is a key first step, according to Pierce, and then adjusting office procedures to facilitate collection of patient responsibility, whether it be true self-pay or self-pay after insurance.  

“Because patients in today’s healthcare environment are responsible for a greater share of their healthcare expenses, it’s important to have the ability to monitor any shifts in your A/R, in this case, increases in the number of patients with high deductible plans. It’s vital for groups to have the tools necessary to understand what each patient’s responsibility is at the time of service.”

One way to do this is through insurance eligibility verification tools. Using these types of tools, front office staff can go online to verify a patient’s eligibility and get a ballpark idea of what the patient may be responsible for. Obtaining this information before services are rendered can lead to fewer claim rejections and denials, but also offers the opportunity for the front office staff to collect the patient’s portion upfront, or to make payment arrangements with that patient.

“The caveat of these portals, unfortunately, is that the information is only as accurate as is provided by the insurance company. The reality is that there’s always going to be a little bit of a lag, but nonetheless, it’s important to have an idea of what the patient’s responsibility is so we can start to work on collecting those dollars,” Pierce says.

Collecting at time of service

Another tool that’s vitally important for radiologists and other healthcare providers to utilize is a time of service payment portal. Such a tool allows staff to accept payment at the time of visit, see if the patient has any outstanding balances, and also provide a receipt.

“From a best practice standpoint,” advises Pierce, “our recommendation for clients is to use a tool like this that allows them to collect before services are rendered, however, the difficulty can lie in having to educate the patient as well. With the number of high deductible plans continuing to increase, typically we’re finding that fewer and fewer patients understand that there’s a deductible they need to meet before their insurance kicks in,” says Pierce.

The specific system and approach to use with patients varies by practice and is driven by the provider in terms of how aggressive they want to be. The goal is to use the tool to collect payment at the time of visit. Working with the front office staff is important to determine the most effective way to communicate that payment is expected at time of service. Advance communication of payment responsibilities allows patients to plan and make necessary payment arrangements, which will reduce the likelihood of confusion where deductibles have not been met.  Getting in front of payment issues that stem from higher deductible plans in this way should help minimize any increase in receivables or uncollectible receivables.

Once the insurance has paid, the provider needs to collect any remaining amount from the patient. It’s important to provide a number of different payment methods the patient can use to settle their account.

“We advise our clients to reach out to those patients as early and as often as possible via statements, emails and phone calls to give patients as much opportunity to pay as they can. In today’s market, people are using all of the available payment options. One option we offer our clients that has been very successful is an integrated voice response (IVR) technology that makes automated calls to the patient. If the patient picks up, he can speak with a customer service representative, make arrangements for a payment plan, or pay the entire amount,” says Pierce.  

Pierce also highlighted the importance of having a website link that allows the patient to make an online payment.  “There’s a growing number of patients who prefer to just go online and make a payment.”

Maintaining a traditional call center to field calls from patients is also extremely important. Despite the growth in automated and online payments, there will always be people who prefer to pick up the phone and talk to someone about their account, make a payment, or make payment arrangements. Call center operators should have access to patient balances and preapproved payment plan options to get the balance expedited as quickly as possible. According to Pierce, groups should work with their billing provider to determine acceptable minimum payments on a plan, and at what point or under what circumstances the account should be written off.

Other variables may also influence a group’s approach to collections. For example, geographic location or local population demographics, such as average age and income may influence the acceptable minimum payment on payment plans.  

Using all of these methods, any billing provider or in-house operation should be able to provide the group’s leadership with the knowledge that they have sound policies and procedures in place to effectively go after those dollars.

Evaluating success in collection efforts

While it’s critically important to view each patient encounter as a collection opportunity, it’s equally important to aggregate that collection information to evaluate the group’s collection efforts and achievements.

“We recommend using a two-pronged approach: measure and monitor,” says Pierce. “First you need to look at how successful you are at collecting that money. Also measure the effectiveness of all the various forms of correspondence that are utilized—time of service, as opposed to statement versus outreach. Actively monitor those results and make adjustments to find the best process for the group.”

Monitoring the self-pay population is also necessary, since billing providers can use this important data when discussing or renegotiating reimbursement rates with payors. For instance, a group may be contracted at 115% of CY Medicare, but due to high self-pay they may only be netting around 100%. In many cases, billing providers can show comparative data to the payors that will support the current rates and reimbursement.

“Every single practice is different, and reimbursement may vary widely within a single geographic area,” Pierce concludes. “We meet with groups and identify what their goals are, review the market, and advise on what might work best for them in terms of monitoring every factor that influences their collection amounts and proactively try to mitigate the impact it will have on their practice.”