MGMA In Practice blog

Go ahead – guess. How much do you think your patients are spending out-of-pocket each year on healthcare?

Today the average family shells out about $1,000 a year for out-of-pocket expenses (beyond insurance premiums), says Stuart Hanson, vice president of healthcare & wholesale lockbox for Fifth Third Bank. Expect this number to grow with the adoption of consumer-driven health plans. Over the next five years, Hanson says out-of-pocket spending will double, if not triple, especially if more people lose their health insurance.

These plans typically combine a high-deductible health insurance plan with a personal health savings account (HSA) from which medical expenses are paid. To put this expenditure in perspective, based on data estimates from 2008, consumers paid about $200 billion dollars out-of-pocket on healthcare costs. Double that and you've got a trend that will continue to shape your practice's collections for years to come.

This out-of-pocket spending includes prescriptions that aren't covered by insurance, dental care, eye care, co-pays, deductibles and so on, says Steven Lazarus, president of the Boundary Information Group Inc., making out-of-pocket spending much more than just what's spent on physician practices and hospital care. Lazarus and Hanson presented their data, along with strategies to address this changing cash flow, in a concurrent session at the MGMA 2009 Annual Conference.

As a practice administrator you already know how difficult it can be to collect from patients. Here are six recommendations you can implement right away to increase collections from consumer-driven health plans.

1. Shift your practice's culture – talk about money with your patients.
   Seems obvious, but medical practices have a long history of not bringing up financial obligations at the time of the appointment. If your practice is one of them, you should look at retraining front office and appointment staff; perhaps adding staff with financial counseling skills to the mix of intake or checkout; and adding automated workflow tools to assist staff in the process. Remember, this is also a culture shift for patients. Involve physicians in this process because it not only affects their income but also their work activity schedule.
   
2. Get the tools you need to determine how much patients owe.
   The Counsel for Affordable Quality Healthcare (CAQH) has introduced core operating rules to address this problem, Lazarus says. An increasing number of insurance companies are becoming certified in the CAQH's rules, which means eligibility information will be available electronically, in real-time, nearly 24/7 for medical practices. The data responses to the practice will be richer and include the remaining deductible on the patient's balance - one of the key factors in determining what the patient should pay.
   
3. Start with scheduling.
   Whether you're fielding an appointment phone call or registering a patient in person, include an insurance eligibility check to a) know if the services are covered b) know the remaining deductible and c) explain when you expect to be paid.
   
4. Follow-up on the phone.
   "Some of the leading healthcare providers, in dealing with this challenge, are aggressively focusing on changing their workflow between the appointment being made and the encounter taking place," Hanson says. Use appointment reminder phone calls to provide an estimate of the patient's financial responsibility and better prepare the patient for his/her visit.
   
5. Don't skip the checkout process.
   Most healthcare organizations collect co-pays during check-in, but the checkout process is a mixed bag. One challenge to collecting money before the patient sees his or her physician is that a procedure may be added later that previously wasn't accounted for. Checkout is perfect for following up to see which procedures were and weren't covered, allowing you to give the patient a good estimate of what he/she will owe. If there's an outstanding balance from a previous visit, this is the time to collect, as well.
   
6. Offer many ways to pay.
   The ability to take credit cards, debit cards, HSA disbursements and checks help patients choose  how  they pay before they leave, Lazarus says. "Consumers are demanding more flexibility in the way that they're able to make payments, through kiosks and the registration area, through online portals," says Hanson. Having an accurate representation of their outstanding balances and being able to make a recurring payment are also great options for collecting money.

For more expert tips on the billing process, check out The Physician Billing Process: 12 Potholes to Avoid in the Road to Getting Paid, 2nd Edition.

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