In the current economy, patients are finding it more and more difficult to pay their bills — so much so that they often put off non-elective procedures because their high-deductible insurance plans require a hefty financial contribution. Three ASC collections experts discuss why patients are struggling to pay their bills and what ASCs can do to collect in full without damaging patient relationships.
Why Patients Are Struggling to Pay
While some experts predict an economic rebound over the next year, most states are still suffering from high unemployment rates and financial hardship. Nevada, Michigan and California reported the highest unemployment rates in the country in August, at 14.4 percent, 13.1 percent and 12.4 percent, respectively, and 27 states reported unemployment decreases from the previous month. As the recession makes it harder for patients to keep up with rent, utilities and car payments, healthcare services often take a hit because they fall lower on a patient's priority list, says Rob Morris, vice president of marketing and new business development for GE Capital's CareCredit.
Rhonda Fort, director of business operations at Practice Partners, offers another explanation for patients' inability to pay medical bills: an increase in high-deductible insurance plans. "Most of the problems I have seen deal with a change in insurance, whether the premium cost has shifted to the patient or the patient is [responsible for] a much higher deductible," she says. "Patients want to pay, but they may not be familiar with the increase in their deductible, and if they have not had a procedure for two or three years, the payment may have jumped from $100 to $500."
The inability to pay generally affects non-elective procedures, Ms. Fort says, because patients who opt for elective procedures have usually saved money in preparation for the expense.
How ASCs Can Address the Problem Without Hurting Patient Relationships
1. Institute a strict financial policy and stick with it. In an economy where consumers are struggling to pay their bills, healthcare facilities often suffer because payment isn't required at the time of service. If a service is rendered and the patient leaves without paying, Mr. Morris says ASCs often struggle to collect the payment or even get in touch with the patient after the procedure. He says in order to make sure payment is made in full, ASCs should institute a firm financial policy that requires patients to make payment prior to receiving a service and lays out several payment options: cash or check, major credit cards or a third-party payment plan.
"Billing should not be [an option in the policy]," he says. "I’ve talk to a bunch of ASCs, and they have huge accounts receivable because they don't collect at the time of service. Once people receive the service, they just don't pay, and healthcare providers end up at the bottom of the list of monthly [financial obligations]." He says once an A/R account goes over 90 to 120 days, the chances of being paid are significantly lowered. Even if the ASC hands the patient over to a collection agency, they will receive very little money relative to the actual payment.
2. Explain a patient's financial obligations three days before service. By the time your facility calls the patient to explain the payment, the administrative staff should already have insurance and contact information from the physician. This information will tell your facility how much the patient will owe for the facility fee. Because it can be a challenge to reach patients at home, Mr. Morris recommends ASCs call three days before the procedure to explain the patient's financial responsibility. "They're going to need to say, 'Make sure you don't drink any fluids, you need to be an hour early, don't bring any jewelry or your watch, and we just checked over your insurance and you have an obligation of $600 towards the facility fee. How would you like to pay for that?'" The financial obligation should be a prerequisite for service just like the physical requirements.
Cathy Meredith, vice president of finance for ASCOA, agrees there should be no discussions of what the patient owes at the front desk. "The only reason you should bill after the surgery is if there are changes because of [complications during surgery]," she says. "I say again and again to our surgery centers that your best chance of collecting money is on the day of service. Once the patient is better and leaves the center, your chance of collecting decreases exponentially."
Mr. Morris says explaining financial obligations prior to surgery will reduce instances where the patient arrives at the center without knowing about the required payment. "Try and get the patient to commit," he says. "If you can, take the credit card number over the phone."
3. Help the patient understand how his or her insurance coverage works. Ms. Fort says payment misunderstandings are often caused by a patient's lack of knowledge about his or her insurance. "Most misunderstandings deal with a change in insurance, and we spend a lot of time educating the patients about what their insurance covers," she says. She recommends spending some time asking the patient basic questions about their insurance coverage to determine how much they understand. If the patient is unaware of a co-pay or recently changed deductible, the bill will come as more of a surprise, which will decrease the likelihood of collecting in full.
Ms. Meredith recommends connecting the patient with their insurance company if the ASC doesn't have time to educate each patient. "If a patient is having a difficult time understanding their coverage and really believes they do not owe the amount [you're billing them for], you can encourage the patient to call the insurance company and ask questions," she says. "In [rare circumstances], you can set up a conference call, and get on the line with the patient and the insurance company so the patient can hear the same information [from two sources]."
4. Explain that financial obligations may change during surgery. Ms. Meredith says ASCs must make it clear to patients that their financial obligations may change during the course of a procedure. "You have to make them aware of the fact that the cost is an estimate," she says. "ASCs submit bills based on CPT codes, and often, when the physician does the surgery, depending on how he dictates the operative note about what he's doing, the intended codes could change slightly." If the codes change, the contracted amount with the payor might also change, meaning the patient might owe more money, Ms. Meredith says. Before surgery, let the patient know that while you try to accurately estimate the final billed amount, changes may occur. "A lot of relationships get damaged when patients think the estimate is absolutely all they're going to have to pay," Ms. Meredith says.
5. Work with physicians to determine patient financial history. Depending your state laws and personal practices, your ASC may want to offer a discount on surgery for patients who are having financial difficulty. In this case, it's essential to know whether a patient really needs financial assistance or they just don't want to pay. Ms. Fort recommends working with your physicians to look at the patient's financial history. If the patient has a history of financial difficulty, ASCs can offer a prompt-pay discount that encourages patients to pay up-front by offering a price reduction. "The physician's office knows the patient's history, and they can tell you if it's just a story the patient has called with, or if they have really been on a payment arrangement with the physician for years," Ms. Fort says.
6. Use a third-party payment plan for patients who can't pay up front. Not every patient will be able to pay for an expensive procedure up front, and your facility shouldn't have to turn away those patients. In that case, you can use a third-party payment plan through companies like Chase or GE's CareCredit that will approve or deny patients based on their credit rating. If a patient is approved by the payment plan, he or she can make regular payments for the procedure, and any failure to pay is generally absorbed by the payment plan.
These payment plans generally function like dedicated healthcare credit cards that can only be used for healthcare charges. A patient can apply at the center by entering several pieces of personal information, and the payment plan company automatically approves or declines the patient based on how likely or able they are to pay. The third-party payment plan means a third-party company assesses a patient's ability to pay and absorbs the loss, creating less financial hassle for your center.
Mr. Morris says an ASC should only resort to its last option — billing the patient after the procedure — if the patient arrives on the day of surgery and cannot pay and a day-of-service cancellation would create animosity between the surgeon and the center. In that case, ASCs should research how to receive the highest possible payment from post-discharge collections.
7. Follow up by phone about money owed. While your center should try to collect payment up-front instead of billing the patient, you will always have patients that require post-operative billing. If your center notices a patient has not paid the required amount, Ms. Meredith recommends calling the patient to enquire about the bill. "A lot of people are scared to call the patient," she says. "They would rather keep sending a bill, but that isn't going to tell you anything if the patient isn't paying. You may have the wrong address, and whoever lives there now is throwing the bill away. Communication is the most important part of this."
Learn more about GE Capital's CareCredit.
Learn more about ASCOA.
Learn more about Practice Partners.
Why Patients Are Struggling to Pay
While some experts predict an economic rebound over the next year, most states are still suffering from high unemployment rates and financial hardship. Nevada, Michigan and California reported the highest unemployment rates in the country in August, at 14.4 percent, 13.1 percent and 12.4 percent, respectively, and 27 states reported unemployment decreases from the previous month. As the recession makes it harder for patients to keep up with rent, utilities and car payments, healthcare services often take a hit because they fall lower on a patient's priority list, says Rob Morris, vice president of marketing and new business development for GE Capital's CareCredit.
Rhonda Fort, director of business operations at Practice Partners, offers another explanation for patients' inability to pay medical bills: an increase in high-deductible insurance plans. "Most of the problems I have seen deal with a change in insurance, whether the premium cost has shifted to the patient or the patient is [responsible for] a much higher deductible," she says. "Patients want to pay, but they may not be familiar with the increase in their deductible, and if they have not had a procedure for two or three years, the payment may have jumped from $100 to $500."
The inability to pay generally affects non-elective procedures, Ms. Fort says, because patients who opt for elective procedures have usually saved money in preparation for the expense.
How ASCs Can Address the Problem Without Hurting Patient Relationships
1. Institute a strict financial policy and stick with it. In an economy where consumers are struggling to pay their bills, healthcare facilities often suffer because payment isn't required at the time of service. If a service is rendered and the patient leaves without paying, Mr. Morris says ASCs often struggle to collect the payment or even get in touch with the patient after the procedure. He says in order to make sure payment is made in full, ASCs should institute a firm financial policy that requires patients to make payment prior to receiving a service and lays out several payment options: cash or check, major credit cards or a third-party payment plan.
"Billing should not be [an option in the policy]," he says. "I’ve talk to a bunch of ASCs, and they have huge accounts receivable because they don't collect at the time of service. Once people receive the service, they just don't pay, and healthcare providers end up at the bottom of the list of monthly [financial obligations]." He says once an A/R account goes over 90 to 120 days, the chances of being paid are significantly lowered. Even if the ASC hands the patient over to a collection agency, they will receive very little money relative to the actual payment.
2. Explain a patient's financial obligations three days before service. By the time your facility calls the patient to explain the payment, the administrative staff should already have insurance and contact information from the physician. This information will tell your facility how much the patient will owe for the facility fee. Because it can be a challenge to reach patients at home, Mr. Morris recommends ASCs call three days before the procedure to explain the patient's financial responsibility. "They're going to need to say, 'Make sure you don't drink any fluids, you need to be an hour early, don't bring any jewelry or your watch, and we just checked over your insurance and you have an obligation of $600 towards the facility fee. How would you like to pay for that?'" The financial obligation should be a prerequisite for service just like the physical requirements.
Cathy Meredith, vice president of finance for ASCOA, agrees there should be no discussions of what the patient owes at the front desk. "The only reason you should bill after the surgery is if there are changes because of [complications during surgery]," she says. "I say again and again to our surgery centers that your best chance of collecting money is on the day of service. Once the patient is better and leaves the center, your chance of collecting decreases exponentially."
Mr. Morris says explaining financial obligations prior to surgery will reduce instances where the patient arrives at the center without knowing about the required payment. "Try and get the patient to commit," he says. "If you can, take the credit card number over the phone."
3. Help the patient understand how his or her insurance coverage works. Ms. Fort says payment misunderstandings are often caused by a patient's lack of knowledge about his or her insurance. "Most misunderstandings deal with a change in insurance, and we spend a lot of time educating the patients about what their insurance covers," she says. She recommends spending some time asking the patient basic questions about their insurance coverage to determine how much they understand. If the patient is unaware of a co-pay or recently changed deductible, the bill will come as more of a surprise, which will decrease the likelihood of collecting in full.
Ms. Meredith recommends connecting the patient with their insurance company if the ASC doesn't have time to educate each patient. "If a patient is having a difficult time understanding their coverage and really believes they do not owe the amount [you're billing them for], you can encourage the patient to call the insurance company and ask questions," she says. "In [rare circumstances], you can set up a conference call, and get on the line with the patient and the insurance company so the patient can hear the same information [from two sources]."
4. Explain that financial obligations may change during surgery. Ms. Meredith says ASCs must make it clear to patients that their financial obligations may change during the course of a procedure. "You have to make them aware of the fact that the cost is an estimate," she says. "ASCs submit bills based on CPT codes, and often, when the physician does the surgery, depending on how he dictates the operative note about what he's doing, the intended codes could change slightly." If the codes change, the contracted amount with the payor might also change, meaning the patient might owe more money, Ms. Meredith says. Before surgery, let the patient know that while you try to accurately estimate the final billed amount, changes may occur. "A lot of relationships get damaged when patients think the estimate is absolutely all they're going to have to pay," Ms. Meredith says.
5. Work with physicians to determine patient financial history. Depending your state laws and personal practices, your ASC may want to offer a discount on surgery for patients who are having financial difficulty. In this case, it's essential to know whether a patient really needs financial assistance or they just don't want to pay. Ms. Fort recommends working with your physicians to look at the patient's financial history. If the patient has a history of financial difficulty, ASCs can offer a prompt-pay discount that encourages patients to pay up-front by offering a price reduction. "The physician's office knows the patient's history, and they can tell you if it's just a story the patient has called with, or if they have really been on a payment arrangement with the physician for years," Ms. Fort says.
6. Use a third-party payment plan for patients who can't pay up front. Not every patient will be able to pay for an expensive procedure up front, and your facility shouldn't have to turn away those patients. In that case, you can use a third-party payment plan through companies like Chase or GE's CareCredit that will approve or deny patients based on their credit rating. If a patient is approved by the payment plan, he or she can make regular payments for the procedure, and any failure to pay is generally absorbed by the payment plan.
These payment plans generally function like dedicated healthcare credit cards that can only be used for healthcare charges. A patient can apply at the center by entering several pieces of personal information, and the payment plan company automatically approves or declines the patient based on how likely or able they are to pay. The third-party payment plan means a third-party company assesses a patient's ability to pay and absorbs the loss, creating less financial hassle for your center.
Mr. Morris says an ASC should only resort to its last option — billing the patient after the procedure — if the patient arrives on the day of surgery and cannot pay and a day-of-service cancellation would create animosity between the surgeon and the center. In that case, ASCs should research how to receive the highest possible payment from post-discharge collections.
7. Follow up by phone about money owed. While your center should try to collect payment up-front instead of billing the patient, you will always have patients that require post-operative billing. If your center notices a patient has not paid the required amount, Ms. Meredith recommends calling the patient to enquire about the bill. "A lot of people are scared to call the patient," she says. "They would rather keep sending a bill, but that isn't going to tell you anything if the patient isn't paying. You may have the wrong address, and whoever lives there now is throwing the bill away. Communication is the most important part of this."
Learn more about GE Capital's CareCredit.
Learn more about ASCOA.
Learn more about Practice Partners.