Should you ease off patient collections?

shutterstock_100738801A striking self pay article popped up in Beckers Hospital Review a few months back. Walking a tightrope, the author suggests that easing off collections is actually the right way to encourage patients to pay.

Counterintuitive? Definitely.

Baloney? Read on.

The author, a revenue cycle consultant, states definitively:

“How the hospital addresses the collection of the deductible and copay can affect the patients' overall satisfaction with their experience."

We couldn't agree more with that statement, as we believe the patient experience ends with the revenue cycle team not the clinicians.

And we’re clear on two additional points:

Aging receivables will absolutely lengthen with the larger/wider acceptance of higher out of pocket plans.

Since many high deductible health plans (HDHP) have deductibles that exceed several thousand dollars, patients generally elect to pay installments to cover the costs if they do not have Healthcare Savings Accounts or other reserves set aside.

For a patient who doesn't fully understand his financial responsibility, navigating payment and alternative resource options can be a difficult and frustrating step.

Patient collections, as it relates to customer satisfaction, is higher when patients receive informed consultation on their financial responsibility, payment and resource options.

To this end, a health insurance literacy program is a natural next step for healthcare providers to educate the patient about his or her choices and financial responsibilities including the application pathways for governmental assistance programs such as Medicaid.

But when it comes to collections strategies, we encourage providers to choose carefully.

When we use the term ‘collection’ we must not think only about the old-fashioned collection process, it is really about a full financial clearance process model, identifying during admission or registration the patient co-pay, establishing payment plans, and importantly the link to eligibility enrollment, including for the underinsured.

Incorporating a positive patient experience into the financial clearance model is critical for hospitals to meet their customer service metrics.

While agree with these points in the article, permit us to wave a few yellow flags!

Offering interest-bearing installment plans has actually proven troublesome for many healthcare organizations. Their health information systems are not designed to calculate and manage interest-bearing receivables, like a credit card company or banking institution assesses.

Additionally, some organizations deem their missions run contrary to receiving additional financial benefits in the forms of interest accruals. To be true, an interest bearing loan arrangement is really a banking solution. It involves “placing” the receivable to the agency (in either a recourse or non-recourse arrangement) who then pays the healthcare organization a percentage of the value of the receivable, minus some management fee.

The Bottom Line

Remember we stated that when we use the term ‘collection’ we must not think only about the old-fashioned collection process, it is really about a full financial clearance process model: identifying during admission or registration the patient co-pay, establishing payment plans, and importantly the link to eligibility/medical assistance enrollment, including for the underinsured. 

Additionally, it is valuable to incorporate into the financial clearance model a third-party collection process that focuses on the patient experience, providing the patient with appropriate account balance remedies and as well as the appropriate level of education of how to access future services.

Incorporating a positive patient experience into the financial clearance model is critical for hospitals to meet their customer service metrics.

 

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About Brad Baldwin, Chief Operating Officer

Brad Baldwin, Chief Operating Officer

Brad has profit and loss responsibility for full and extended business office services and coding services. He has assembled a strong team that consistently over-performs in areas of project pricing, operational execution, client management, performance analytics and technology.

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