It wasn't long ago when patient collections were viewed as a minor concern in ASCs. After all, reimbursement was strong, and what patients owed for their care was relatively low. No one wanted to leave a $50 co-pay and $250 deductible on the table, but if only some of this could be collected and the rest written off, it wasn't the end of the world. Patient financial responsibility accounted for a small percentage of what ASCs expected to collect for a procedure, so even if collections came up a little short in this area, profit on the case would still be high.
Then reimbursement started tightening while patient financial responsibility rapidly increased. Among the key findings from Black Book's 2017 revenue cycle management surveys: Since 2015, patients experienced a nearly 30 percent increase in deductible and out-of-pocket maximum costs. It won't be surprising to see that figure rise even further when Black Book releases its 2018 revenue cycle management surveys.
With margins tightening thanks to the downward shift in reimbursement and upward shift in patient financial responsibility, ASCs are under significant pressure to collect all the money that patients owe for their surgical care. Coming up short is no longer an option when, in some specialties, even just a few dollars can be the difference between a profitable and unprofitable procedure.
Unfortunately, there are many potential mistakes ASCs can make that may result in a poor performance in patient collections. Here are five of the most common such mistakes.
1. Inadequate payment options. An eye-opening report from the Federal Reserve Board published in May 2018 indicated that four in 10 Americans could not cover an unexpected expense of $400. A key takeaway: Just accepting cash is no longer a model for collections success. It's also a model likely to negatively impact patient satisfaction.
A solution: Offer flexible financial options. One such worthwhile offering is a secured loan that can cover a patient's surgical costs. With this approach, lenders fund ASCs soon after patients undergo their procedures. These lenders manage the collections activities, with patients receiving loan packages that meet their budgetary needs. The results: Patients receive the surgical treatment they require and pay the loan off over a comfortable period of time while ASCs receive expedited payments.
2. Incomplete patient information. If you want to accurately identify how much patients will owe your ASC for their care, you need to collect all their necessary financial information. This includes details on their primary insurance and, if applicable, secondary insurance. It then requires verification of benefits and amount of the deductible previously covered.
Incomplete patient insurance information and/or shortcomings on verification are surefire ways to collect the incorrect amount. Note: Make sure patient information is updated during future visits.
3. Poor policies. Does your ASC have a comprehensive policy(s) that explains the rules your staff should follow for patient collections? If you can't answer this question with a definitive "yes," then it's time to get to work and put this policy together. Developing such a policy can help ensure staff use consistent processes to perform all the necessary steps to determine how much money patients will owe your ASC, explain to patients how much they owe and why, and collect this amount. If staff are permitted to approach these processes in the manner of their choosing, you run the risk of missing critical steps or omitting key details.
4. Insufficient staff training. Even with a comprehensive patient collections policy, do not assume staff will follow it in the manner you intend. Your ASC should provide education on the importance of patient collections and continual training on the policy. Make sure training covers when patient collections do not go as planned, such as how to properly handle disputes or requests for payment waivers. Also, cover the potential emotional elements that may arise when your ASC requests a significant payment.
5. Lack of performance monitoring. Even if patient collections seem to be going well, you should not simply assume this is the case. Develop a mechanism to regularly audit patient collections efforts and verify whether they are successfully completed, with all monies owed captured. Ongoing performance audits can help identify shortcomings quicker than without the use of monitoring. Once you spot a problem, you can then determine if staff require additional training and/or if policies and training need revision to fix the issue. Whenever you can catch and address problems, your collections efforts are sure to get a boost.
Randy Bishop (rbishop@surgicalfunds.com) is a partner with Surgical Funds, which facilitates patient financing solutions to supplement out-of-pocket expenses for ASC procedures.