Expansion of High-Deductible Plans Increases Importance of Patient Financial Services

No one expects the Patient Protection and Affordable Care Act to be a panacea for the healthcare provider revenue cycle, but based on an analysis of recent research, patient financial services will become even more critical to the financial health of hospitals and other providers.

Because healthcare reform expands the umbrella of Medicaid coverage to the poor and provides low-cost insurance to the under-employed, this will be good news to a provider’s bottom line. But any positive gain stands to be offset by what recent research indicates is a growing challenge: namely that of those with insurance, one in five will have trouble paying medical bills.

As a recent Commonwealth Fund study demonstrated, that percentage is higher for young people  and slightly lower for women. For those individuals or those with family members who have chronic conditions, that figure shoots up to almost one in two, according to another recent study  by Changes in Health Care Financing and Organization.

Those percentages likely will increase as more employers turn to high-deductible plans  or as employers shift more healthcare insurance costs on their employees, who in turn select plans with higher-deductibles to reduce their monthly expense.

If revenue cycle professionals can expect that 20 percent of  insured patients will encounter trouble paying their respective medical bills, the key to the financial health of your hospital or medical practice is how effective you are at collecting patient revenue and how quickly you can collect it. This means:

• Being as proactive as possible and at the earliest touch points with patients,
• Having as sophisticated tools as possible to screen patients with regard to their ability to pay
• Having a diverse set of payment options that they can select.

The good news is that these patients almost always will have some ability to pay. In light of the growing high-deductible trend, investing in the following tools, policies, and procedures should improve revenues and increase patient satisfaction:

• Improve patient data collection. Make certain that patient data, be it insurance coverage or mailing address or even spelling of the name, is as complete and, more importantly, accurate as possible. Inaccurate or missing data leads to insurance denials or improperly delivered bills, and to patients with high-deductible plans, the delays caused can be the difference between getting a bill promptly paid or having to send it to collections.
• Improve patient data analysis. There are numerous tools available to estimate a patient’s ability and/or likelihood to pay a bill. If you are forewarned, you can better direct the patient to payment options that overall will increase patient collections.
• Improve patient finance scripts. Give your Patient Access and Patient Financial Services staff as many tools as you can so that they can have a frank and open discussion with patients about their financial obligation to you and their respective ability to pay.
• Improve patient point-of-service collections. Emphasizing revenue collection at point of service reduces overall accounts receivable collection days, and directly affects the percentage of accounts receivable that will eventually fall into collections.