Not so long ago, billing departments and services typically collected nearly every dime of medical practice revenue. Other staff would have little to no involvement in collecting money from patients, with the exception of copays at check-in. Patients would be billed after EOBs were submitted by insurance companies, typically for small balances. In recent years however, health plan terms have changed dramatically. Patient obligations for copays, coinsurance, and deductibles now make up a much larger share of practice revenue – and of patients’ disposable income. Collecting these patient payments properly means rethinking processes and involving non-billing staff in financial conversations with patients.
The biggest shift has been that most insured patients now face some sort of deductible – and 30 to 40% have high-deductible health plans (HDHPs), defined by the CDC as plans with deductibles of more than $1,200. These deductibles mean that insurance companies won’t pay a penny towards the costs of many services patients typically receive until that amount is paid out of pocket. On some plans, even routine office visits must be paid for entirely by the patient until the deductible is met. Collecting these payments after services are rendered can be very challenging, and patient balances can quickly become bad debt.
If your practice is inclined to “leave billing to the billers,” as was common in the days of fewer and smaller deductibles, consider what happens when your practice sees a patient with a significant deductible. The patient walks out the door of your practice without thinking about financial implications – possibly even assuming insurance covered the cost completely. Then, the bill from your practice arrives many weeks later. The long delay between your billing team’s processing of the claim and the arrival of the EOB from the patient’s insurance makes it quite likely that the bill will come as a surprise to the patient. Depending on the type of service and the amount of the patient’s deductible, the bill could be a very big surprise indeed.
When your patients are surprised by unexpected bills, there’s a good chance that many of them won’t want to pay. Some will simply not have the cash on hand and be too embarrassed to admit it. Others will be convinced that their bills are wrong or that insurance will eventually pay. Even those who will ultimately agree to pay will cost your practice money if they’re confused about the bill, and will call your staff to complain or seek clarification. Some patients who become angry about receiving an “incorrect” bill may leave your practice altogether; they might even share negative comments online and hurt your practice’s reputation. Your billers will respond to non-payment by sending multiple statements over several months (each at a significant cost). Sometimes, those statements will not prompt any payment at all.
The bottom line: If you’re waiting until your superbills reach your billing department to address patient financial obligations, you’re almost certainly losing money you could be collecting with a more proactive process. At minimum, engaging patients and educating them about their financial responsibilities can avoid “surprises” that are upsetting to patients and lead to bad debt.
To be effective, these conversations need to happen before the patient visits your practice. Schedulers and receptionists are on the front lines of educating patients about their financial responsibilities – that means they need to be educated about health plan terms, too. Solid training on how to help patients prepare for and meet their financial obligations will make the task less stressful for your team. Make sure your team also has access to the technology they need; tools like eligibility checking, estimation, credit-cards-on-file, and payment plans will arm your team to do a better job of managing this increasingly important responsibility.
Laurie Morgan is a partner and senior consultant for Capko & Morgan, with experience in marketing, business operations, and strategic consulting. She is also the author of the practice management book People, Technology, Profit: Practical Ideas for a Happier, Healthier Practice Business.
Edited by Allison James