Recently I received a call from an insurance specialist at the imaging center where I will be having an MRI soon. The purpose of the call was not to remind me about my appointment, but to inform me that I would be expected to pay my unmet $5,750 deductible before insurance would pay their 80 percent portion. My payment was expected no later than the day of the test. I asked if there was a prompt pay or any other discount offered; the only alternative was a "cash package." This began an interesting conversation about a cash price of $1,450 versus the $6,300 the insurance would be billed for the same MRI. If I chose to pay $1,450, this would not apply to the deductible because insurance wouldn't be notified—it would be a cash transaction.
All I could say was, "Wow, that is quite a difference." I could not wrap my mind around the fact that they can charge insurance $6,300, but if I was willing to pay $1,450 up front, this would be considered payment in full. This simple calculation told me I would receive a 77 percent discount for paying cash.
My takeaway from this call was obviously about the discount. Had I not asked about a cash payment, I would have been expected to pay $5,750 with no further discussion. I never would have known I could pay a mere 23 percent of the total if I abandoned my insurance. I also marveled that the imaging center has an insurance specialist to solidify payment three days before the test.
This left me thinking—would this ever happen in the HME world?
Lessons Learned
What does this teach us? First, arranging to collect deductibles and copays up front is a must. Make sure your intake representative knows exactly how much of the deductible has been met. Keep in mind, at the beginning of the year, many health care providers hold their claims to see if another entity can assume responsibility for the deductible, freeing them of the burden. Second, I recommend determining a reasonable discount (not 77 percent) that you should pass by your legal counsel for safe measure. The fact that the company made certain to contact me, the patient, days before the test demonstrated a smart business practice that probably helps them reduce patient pay receivables.
Case in Point
My experience made me think about HME companies' abilities to embrace up-front patient collections much like the imaging center did with me. At two HME companies I visited recently, private pay collections were a primary focus because the bulk of their A/R issues were related to private pay. In both situations, copays and deductibles were addressed after the fact. As a result, their outstanding A/R is skewed negatively because once a patient's receivable ages, it often doesn't get collected. When I was asked why copays and deductibles are so important to collect up front, the answer is 1) deductibles and copays have surged to an all-time high and 2) profit margins have shrunk as a result of reimbursement cuts.
Given shrinking margins and the need to collect money up front, what are possible solutions?
Mindset Change
A key element to this switch is for senior management to embrace the up-front collection mindset change. No longer can you afford to have staff play the role of caretaker first and money collector later. There is no reason staff can't be caring and empathetic while also asking patients to pay. It may help to host an in-office role-play scenario to get more acquainted with the notion of collecting money from patients. In one company, the private pay collector openly confessed to only sending past-due letters and making no phone calls. This is exactly why senior management has to make it clear it is not only okay to ask patients for money, but it is also mandatory to ask the patient to pay their portion up front. If you don't know how much the product will cost, you should be able to find out during the insurance verification process. Basically, without securing the patient portion up front, there will be no business to worry about in the future.
Techniques
Once your staff is on board with collecting money up front, make sure they record credit card information. Card information should be accompanied by a patient authorization letter so the card can be used to charge additional items in the future. One caveat is that some patients reach their maximum credit limits, so always check this before rendering service. Be certain you have the proper level of security when you store credit card information. As is customary, the patient should be notified before service is rendered.
Patient Portal
Once a credit card is on file, train patients on the patient portal/online pay option. It allows patients to pay bills and check payment status. It makes sense to store this on your website, but if you cannot, at least have a site for the patient to use for this purpose. This solution should reduce calls about billing and also allow patients to order products and pay online.
Today, intake and other departments are learning not to dispense product without first checking for outstanding patient balances. As insurance companies try to mimic Medicare's reimbursement cuts, deductibles reach all-time highs and coverage percentages drop to 50-60 percent in some cases; patient portions are increasingly more significant. Help your staff shed the notion of taking care of the patient today and worrying about the money tomorrow. Rather, educate them to take care of the patient after solidifying financial arrangements.
