Collecting more from your top payer: A survey of ASC leaders reveals areas for RCM improvement
When it comes to financial health, all provider organizations face three of the same main challenges. First, ICD-10 has required large-scale changes to staff knowledge, workflows and IT systems in order to keep medical claims processing moving. Second, providers must adapt to a value-based care's all-new reimbursement system that requires a difficult balancing act of efficiency and quality.
The third healthcare revenue cycle management challenge is perhaps even more daunting: patient payments collections. It requires major behavior changes not only from provider teams but also from patients, whose involvement in paying for their care no longer ends with making a minor co-payment. Patient financial responsibility continues to increase rapidly, and as it does, many patients may not be able to afford rising care costs. According to Kaiser Family Foundation's recent survey, nearly 50 percent of households don't have enough liquid assets to cover a higher range annual deductible, defined as $2,500 for an individual or $5,000 for a family.
With stricter protocols, tighter margins and more pressure to simultaneously provide value and quality, ASCs face unprecedented RCM demands. Changes such as ICD-10 and value-based reimbursement can make claims payment more sluggish and challenging; therefore, having a proactive, best practice patient billing strategy can make a substantial difference in an ASC's bottom line and ongoing financial health.
ASC peers weigh in regarding patient payments
In the third quarter of 2015, Navicure, a claims management and patient payments solutions provider, and Becker's Healthcare deployed a survey to ASC leaders and managers. This survey acted as a research study to provide insights into ASC challenges, processes and technology related to patient payments. Survey respondents represented a broad range of specialties and sizes: 62 percent of respondents were from ASCs with four to 24 physicians, while 36 percent were from ASCs with 25 or more physicians. Respondents also came from ASCs with differing approaches and priorities regarding patient payments. Among the varied answers, one stood out: two-thirds of respondents didn't rate patient collections as a high priority.
If you asked providers to name the top payer in their geographical market, you'd probably get a variety of answers depending on the location. All providers are accustomed to thinking of payers as CMS and commercial insurers, but patient payments now make up an unprecedented amount of any provider’s revenue. Seventy-two percent of survey respondents indicated patient revenue represents between 21 percent and 40 percent of their ASCs’ revenue. As patient payments now comprise a significant percentage of ASC revenue, optimizing collections is a necessity, and it should no longer be relegated as a lower priority.
Increasing both efficiency and collections with automation
While most respondents’ organizations are large and busy enough to perform more than 100 procedures per month, many of these ASCs rely on manual processes for patient collections. Considering patient payments for ASCs with this case volume could represent $1.4 to $2.7 million of overall revenue annually, the effort to optimize collections efforts is clearly worthwhile. Ideally, a best practice patient payment strategy is founded on technology automation and includes best practice patient payment solutions and processes that optimize two specific components of collections:
1. Patient payment estimation. When asked if staff estimate patient financial responsibility at time of service, 77 percent of respondents replied "sometimes" or "never," yet approximately one-third of respondents cited patients who were unable to pay as their top collections challenge. In an era of high-deductible plans, price estimation is a critical precursor to patient collections. Especially as millions of newly insured Americans under the Affordable Care Act grow accustomed to navigating health insurance, automated estimates can lay the groundwork for discussions between providers and patients. For ASCs, generating an estimate prior to or at the time of service allows staff to begin financial discussions early so neither party is surprised by the cost of care.
2. Patient collections. Approximately 40 percent of respondents collect payments via mail or by taking credit/debit card information over the phone. Such methods can waste time and resources, incur unnecessary expense and create unnecessary data security and privacy risks. Instead, automating collections at time of service and post-service can promote staff efficiency. In addition, it reduces opportunities for patients to neglect making payments while also offering more ease and convenience:
• Time of service. Whenever your staff reviews patient financial responsibility, they should securely store a patient’s credit/debit card online to later use to charge patient responsibility (once determined) in full or set up an automated payment plan. With the latter, patients will appreciate having input, as they'll be asked to choose the day of the month and amount of each payment. However, because the plan is automated, the patient won’t be able to forget about making a payment or neglect it for other reasons.
• Post-service. If the patient has a recurring payment plan, your organization will receive payments until his/her balance is paid in full. If not, though, other options such as eStatements, a financial payment portal or one-time online bill payment can encourage self-pay collections. If you have a financial portal or online bill pay, be sure to have your ASC's logo and branding on the webpage. Patients appreciate the consistency and will feel more comfortable about making online payments.
With more than a third of respondents relying on manual patient billing processes, ASCs clearly have a great opportunity to improve their patient revenue. By leveraging technology automation, best practice patient payments processes and more proactive discussions with patients, ASCs can increase revenue and ensure greater financial health
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