Whatever health care services you provide, you have probably felt the pinch of tightened reimbursements—perhaps 30 percent to 40 percent less, or more, than what you received in the past. These lowered reimbursement rates mean that consumers are being required to play a larger financial role in their health care. In fact, a recent survey indicates that the number of consumers with high-deductible plans has risen dramatically in the last few years, with the average deductible at $1,046 in 2014. As a result, your health care operation’s bottom line is dependent on patients paying their share. Here are some suggestions for collecting the cash up front and over the long term.
Collect Before You Serve
As most health care providers know all too well, debt becomes more difficult to collect as it ages. According to some estimates, approximately 90 percent of 90-day-old debt is collected, but the average recovery rate declines by more than 10 percent for every month outstanding after that. So debt that is 120 days old has an 80 percent recovery rate, and by 180 days, collection rates may be as low as 60 percent.
Because of this, most health care professionals are now collecting copays up front. If your home care patients have grown accustomed to the status quo of paying little to nothing at delivery and waiting for bills to come in the mail—which they may or may not pay—some patients may balk at paying fees up front. Making this change will require retraining of both your patients and your staff.
Training patients is a matter of communicating your new policies and then applying them consistently. Communicate your policies via every means possible—signage inside your facility; posts to your website and social media; notes on billing statements; letters, postcards or emails sent to your current clients and any other methods you can think of. Ideally, you want to avoid surprising patients with changes to your policy.
Next, you have to rely on your staff to consistently adhere to the new policy. The four-step plan below—the “four Cs” of patient payments—is a great tool to help. If you utilize business management software, your application is likely to be the key to consistently completing each of these steps.
- Capture the contact information for patients and responsible parties, including mobile and landline phone numbers as well as email addresses.
- Check patients’ insurance information (deductibles, remaining out-of-pocket owed and the percentage of contributions from plans) at each payment verification.
- Calculate the portion owed by patients at every service and/or equipment delivery.
- Collect patients’ payments, or as much as they are able to pay, when the products and services are delivered or shipped.
Requesting payments at the time of service is more likely the rule than the exception these days, so as your staff members adhere to the policy and collect consistently, your patients will become accustomed to a new normal.
Establish Payment Plans
Because the increasing burden of health care costs can be difficult to manage, even for those who are insured, some of your patients may not have the cash or the available revolving credit to pay large out-of-pocket expenses all at once. According to a study conducted by credit-reporting-subsidiary TransUnion Healthcare, 62 percent of patients reported being surprised by out-of-pocket expenses. Data from the Kaiser Family Foundation and Health Research & Educational Trust indicates that the divide between out-of-pocket health costs and individuals’ wage growth has widened.
This means the time may come when even some of your insured patients may no longer be able to pay the up-front costs of medical products and services. To help your patients afford the care and equipment they need, TransUnion Healthcare President Gerry McCarthy suggests that providers consider establishing payment plans for those who can’t manage the entire out-of-pocket amount up front. While he acknowledges, “payment plans will demand a new level of effort to collect reimbursement,” they are a service that some patients may require.
You could start with an informal plan that you administer yourself—preferably before the service is provided. One simple system is to divide the out-of-pocket costs into monthly payments, which you could auto-draft from patients’ credit cards or bank accounts each month. You could also agree to let patients send monthly payments through the mail. Detailed notes in your software system, as well as reminders sent to patients, could help manage the plan.
If self-administered plans prove too difficult to manage efficiently, you could utilize a vendor to provide the service. While these types of services are not new, they have often involved high interest rates which, in the long run, compound the outstanding debt rather than help to alleviate it. Today, many medical providers are opting for interest-free payment plans and are enjoying increased cash collections as a result.
Whether self-administered or outsourced, interest-free payment plans have proven positive for medical suppliers and care providers who have tried them. Patients also appreciate the option, which could give your home care business an edge.
