Change is a constant in medical billing and practice management – and Q1 2016 has had change to spare: Meaningful Use is in transition; the impact of ICD-10 is still reverberating; and new programs like MACRA are still making their debut.
But as regulators and industry overseers like the HHS and CMS deploy new mandates and guidelines to make sure providers don’t get set in their ways, many back-office aspects of the healthcare business remain stuck in the past.
Take patient collections, for example. Given that even the most efficient medical practices often put unpaid balances on the back burner, collections is an area where providers rarely invest much effort adapting to changing patient expectations or embracing new ‘best practices.’
But that shouldn’t be the case. High-deductible health plans continue to rise in prominence, making patients responsible for far more out-of-pocket costs than they used to be: From 2003 to 2013,health plan deductibles increased an average of 146 percent (and they’ve likely ballooned even more since then).
That’s changing the face of which kind of healthcare consumer may be avoiding their billing statements, and it’s making patient payments a larger aspect of accounts receivable than most medical billing departments are accustomed to. According to data reported by Kareo, that’s creating issues:
- 65 percent of bad debt belongs to insured patients
- Only 35 percent of copays and other out-of-pocket patient costs are collected up front
- It costs a practice twice as much to collect from patients as from insurers
- 30 percent of A/R consists of outstanding patient balances
If all of that bad debt was ultimately collected, there wouldn’t be cause for concern. But the average recovery rate for a medical practice’s bad debt is just 21.8 percent – making it well past time for change in most medical offices across the country.
One key to collections success is time: The more days that pass between an encounter and a billing effort, the less likely it is that the practice will collect. (Rates hover around 97 percent within 30 days; they go down to 50 percent for 91-120 days.) So improving collections operations will, in part, require instilling a sense of urgency into your staff. Here are our suggestions:
- Insist on up-front copays. No exceptions! Copay collection is the easiest aspect of patient payment to take care of… making it the silliest one to let slip by. Train your front desk staff to be diligent about checking co-pay details at check-in and giving patients as little leeway about upfront payment as possible. (Update your office policies if necessary.)
- Collect unpaid balances before the subsequent service. If a patient has ignored a billed statement for more than ten business days, insist on collecting for the prior service in-office, in advance of the next encounter. Set clear guidelines with the patient if he or she attempts to insist on paying by mail, making it clear the next visit will not be scheduled until the balance is paid in full.
- Use the phone. Get patients on the horn sooner than you’re used to, perhaps within just 30-60 days of the unpaid encounter. Keep in mind that many nonpaying patients are insured and employed – they’re just not eager to pony up. Calling a time or two may be just the nudge they need to get it over with.
- Accept all kinds (of payment). The more payment options you provide, the more likely you are to get paid. Checks, cash, debit cards, and credit cards should all be welcome, and you should be open to accepting unpaid balances by mail, phone, or online (and to making it simple to set up payment plans instead of sending non-payers to a collections agency).
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