Cash in Hand
Editor’s Note: This article is a continuation of a conversation that began last month with George Buck of Frost-Arnett at the NMGMA meeting. Intrigued by the regulations that govern when, where and how a medical debt can be collected on the back end, I reached out to George and colleagues to discuss best practices for providers when it comes to money matters.
Frost-Arnett, a full-service accounts receivable management (ARM) company focused on the healthcare industry, traces its roots in Nashville back to 1893. While nearly every aspect of the business and regulatory environment has changed over the nearly 125 years since the company’s founding, one truism has remained constant: the best opportunity to collect money owed is at the point of service.
Alan Clayton, COO for Frost-Arnett, said a number of steps should be taken whenever possible before a patient ever walks through the door, including obtaining appropriate pre-authorizations, providing patients with pre-service estimates, and verifying insurance and contact information. “One of the things providers can do is collect co-pays, but a lot of times that just doesn’t happen,” said Clayton. He added, “You have a 100 percent contact rate at the point of service when they are right there.”
One of the issues, said George Buck, president emeritus, is quite simply that people aren’t comfortable asking for money. “We talk a lot about natural-born athletes or natural-born leaders … there are no natural-born people who are good at asking for money.”
Buck added, “Historically healthcare has not been as aggressive in collecting co-pays and deductibles, and it’s a culture shock to the patient.”
CEO Jason Meyer said a key reason for the shift is because of the changing payer mix with increased responsibility falling on the patient. He noted the patient’s share of cost has increased from historically about 5 percent responsibility to as much as 25 percent today. “Healthcare providers are becoming much more sophisticated in educating consumers in advance,” he said. “Before, when the patient bucket was 5 percent of the revenue stream, they were much less incentivized to educate the patient on what their responsibility was going to be.”
With patients taking on more financial obligation, there is also greater competition for those dollars. Buck noted a procedure in an outpatient setting could result in a patient receiving bills from the surgeon, anesthesiologist, lab, and surgery center. “They’re all trying to collect from the same pool of money from the patient.
While some providers offer cash or prompt pay discounts, those tend to happen in cases where a patient is uninsured or not accessing insurance benefits for a service. Clayton said it’s important for providers to know what the policy is with the patient’s insurance company. He noted insurers often don’t allow discounts on deductibles because that is the patient’s cost-share portion of the bill.
Clayton added patient-friendly billing statements are critical for patients to actually see and understand what they owe and why. Ideally, a statement includes details on the various services provided to create a total cost, any insurance discounts applied, how much the carrier is paying and the amount of the patient’s financial responsibility. Unfortunately, he said, “We don’t see as much of that as we’d like.”
Buck added, “In cases where it’s feasible, have a well thought out financial policy and get that to the patient early.”
“If you educate the consumer early – tell them what their responsibility will be – you’re going to have a much higher probability of payment,” Meyer affirmed.
Should the bill wind up in collection, the ‘garbage in, garbage out’ rule applies to the data turned over to the ARM company. Clayton stressed it’s imperative to verify a patient’s contact information and insurance coverage. It’s equally critical that coding be done correctly on the front end and that the information turned over for collections has been checked as being for the correct patient – Jane C. Doe is different than Jane F. Doe.
Buck added the Consumer Financial Protection Bureau (CFPB) continues to crack down on healthcare collections. “The CFPB mantra is ‘collect the right debt from the right person in the right way,'” he said. “The integrity of the data and our ability to substantiate the data is going to be even more important going forward.”
To maximize revenues, the trio of experts agreed providers must educate patients about financial responsibilities in advance whenever possible, collect co-pays at the point of service, make sure any amount to be billed is clearly explained, and verify data is correct if a past due bill ultimately has to be turned over for collection.