Patient Friendly Billing: When to Cut Your Losses

shutterstock_184293509Truth...we're all trying to squeeze every possible penny out of A/R, especially when it comes to balances where most, if not all, of what is due is the patient’s responsibility.

We blogged about bad debt write offs earlier this month with Effective ways to avoid bad debt writeoffs: communication is key, and last Fall too, with Let it go! The curse of "dead" A/R. Today, healthcare organizations are still looking for ways to overcome payment barriers and meet (exceed!) operational objectives, so we're back to the very current and practical question: how long is too long when trying to collect on a patient’s balance? At what point does the cost outweigh the benefit? (Okay, that’s two questions, but you get the point.)

Let’s consider for a minute what causes A/R to age: Is it late charges? Front end registration errors? Delayed payer processing? Incorrect coding? Too much volume, not enough staff!? Each of these excuses (and that is what they are to the patient) can easily push an A/R date out well over a year or two, or even longer. So, how old is too old?

To get to that number, first consider the impact of these balances: customer satisfaction starts with your men and women on the front lines—for this scenario, the self pay call representatives.Taking call after call on aged inventory can be taxing on a representative. It is difficult to maintain a friendly, positive attitude while being bombarded by angry patients:

“Yes, Mrs. Smith, I understand that you received your EOB from your insurance in 2012, but …”
“You see, Mr. Jones, there was a problem with how the claim was coded and …”
“I can see why you thought that the balance was resolved after four years, but unfortunately…”

What your staff really wants to say is “Absolutely, Ms. Anderson, I wouldn’t pay the dang bill either. It isn’t your fault that we are understaffed and that the insurance company took its sweet time processing the claim.”

Fighting these battles day after day makes the staff feel like Sisyphus, everyday pushing the boulder back up the hill. There is little reward in this action and, at the end of the day they feel like they have failed—through no fault of their own. It doesn’t take long for these staff members to become unhappy and dissatisfied, leading to low employee retention and high turnover costs.

And, no matter how great your staff might be, a patient will rarely feel satisfied with the explanation of the delay. Of course, they understand that they owe the bill, but they feel there is an obligation to be billed in a timely manner.

Put yourself in their shoes. You go out to dinner with your spouse and the waiter forgets to bill for your dessert. Three years later you receive an invoice—it hardly seems fair. Of course you ate the red velvet cake with the buttercream frosting—and it was amazing. But, it wasn’t your fault the waiter forgot to charge you. It was years ago! Get over it already!! Besides, you already spent hours in the gym working off the delicious calories.

So what, then, is the magic number? The key is to identify the tipping point where patient compliance meets the Sisyphus Effect. Our general recommendation is one year from EOB date, although even this can feel like an eternity to patients in certain markets.

Of course, there are always exceptions; the patient was paid for services, you appealed on their behalf, they provided inaccurate insurance information. All of these are good cases for extending out the recommendation. In the end, it is up to you to determine what is fair to your providers, your staff and your patients.

For your next steps, download our offer below to discover more ways to improve your bottom line.

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About Rebecca Franklin, Client Services Manager

Rebecca Franklin, Client Services Manager

Rebecca joined the MediRevv team in 2012 as Operations Supervisor, and for the past three years served as Client Services Manager. She works with our clients to ensure that MediRevv is maintaining and driving performance, with an all-encompassing end goal of success. If she didn't work at MediRevv she'd work as a veterinarian.

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