Self-pay patient accounts come with vital risks. Medical facilities beget three times higher costs amassing on self-pay patients. That's compared to business insurance accounts.
It gets worse.
Healthcare consumers pay more than twice as slowly as commercial payers. And the probability you'll ever collect gets lower. The prolonged the self-pay balance goes overdue, the lesser the odds.
So, how can your hospital increase self-pay revenue reimbursements? How can you effectively manage healthcare costs? Here are some innovative solutions.
Understand Why Patients Struggle to Pay for Healthcare
The solution lies in understanding the problem.
The key reasons patients struggle to pay for healthcare include:
1. They Can't Afford It
One out of four Americans has an unpaid healthcare bill, and one in ten won't ever pay it. In fact, 62 percent of personal bankruptcies in the US are due to medical expenses.
This shows the necessity of a patient verification system. It should be based on the payer's financial records.
2. Difficulty Paying Hospitals
Inconvenient payment systems make it hard even for willing payers. It's so bad that:
- Sixty-two percent of healthcare organizations don't offer electronic credit card payment.
- 52 percent of healthcare organizations don't offer automatic payments.
- 57 percent of healthcare organizations only send bills through the mail.
Automated billing and electronic credit card payment will speed up payments. It will also ease your revenue cycle.
3. Confusing Bills
When patients are confused about hospital bills, they'll either delay payments or fail to make any payment at all.
Hence, it's surprising that 53 percent of patients need clarification. They don't know when their payment is due.
In addition, there is a lack of clarity on whether the balance is covered by insurance or out-of-pocket methods. This affects 67 percent of patients.
Transparency on hospital bills is necessary to avoid this. Simplifying the payment system will also produce higher collections payment rates.
4. No Price Transparency
When patients don't know how much they are required to pay, they can't make appropriate plans beforehand. Unfortunately, only 42 percent of healthcare organizations are in the green. They offered cost estimates before appointments in 2016.
A prior cost estimate will help your patients budget for their medical expenses. It will also lessen healthcare cost ambiguity.
Solutions to Increase Self-Pay Revenue Reimbursements
Now that you understand the causes, you can come up with effective solutions.
Here are several effective strategies:
i. Use a Robust Identity Verification Process
Pre-verification is necessary to determine your patient's propensity to pay.
How do you do it?
That's possible through credit score evaluation, mortgage balance inquiry and address verification. Various verification methods can be used.
Verification will help you identify candidates for payment plans or charity care.
Through this process, you'll get insights into other possible payment options to pursue.
It's particularly useful in checking patients for insurance eligibility, authorization, and benefits. When the patient has an insurance plan, you'll have a better chance of reimbursement.
Statistics show consumers prioritize paying health insurance premiums (22%).
That's far more than medical bills (7%).
There's help even for those who may seem ineligible for health insurance. Certain provisions exist to cater to their needs.
Even people who are up to 133% of the federal poverty level (FPL) can benefit.
That's based on the key provision in the Patient Protection and Affordable Care Act (ACA), which offers the expansion of eligibility for Medicaid.
ii. Personalize the Payment Process
Once you have verified your patients' details, you can customize the payment process to suit specific individuals.
Simply give each patient the right plan at the right time.
You can segment payment processes suited to those with a high, medium or low ability to pay, and even consider those unlikely to pay.
Make your goals clear to patients. The aim is to establish funding mechanisms that meet their needs.
Share healthcare costs estimates early in the process and aim to collect just as early.
You should understand the complementing action of ability and willingness to pay. This is especially important when it comes to out-of-pocket medical expenses for insured consumers.
With such self-pay patients with insurance, 90 percent are willing and able to pay. But, only if their annual out-of-pocket liabilities are less than $500. This proportion falls significantly to 74 percent, for liabilities of less than $1,000.
This shows that your proactive payment process would also need to be adaptable.
A patient may start off with insurance coverage, which gives you a high propensity for collecting payment. That will change if the same patient incurs a high amount of out-of-pocket costs.
iii. Tackle Consumers' Confusion and Concerns
Willingness and ability to pay are patient issues. However, patient confusion and concerns are likely your medical organization's problem.
It's your job to make the payment system less confusing. It should be easy and smooth to manage through financing. Making it convenient is even better.
This will eliminate much of the bad debt in the system.
Feature automated payments with structured payment plans. You can even include lines of credit and incentives or reward points.
Execute this methodology based on the principles of behavioral economics. Create a value proposition that consumers will adopt.
Such innovative solutions will help you achieve two key goals:
- Boosting your revenue cycle.
- Saving on significant administrative healthcare costs.
Make such efficient processes are part of the entire medical facility. Incorporate protocols that every staff member would follow. Requiring regular updates on such processes during staff meetings can cement their importance.
Hire an Eligibility Specialist to Curb Your Healthcare Costs
Insured patients pay faster than self-pay patients. And eligibility specialists help convert your self-pay patients into insured patients. For that reason, hiring an eligibility specialist is a great investment.
It's an effective way to curb healthcare costs.
Eligibility specialists serve small, medium to large medical facilities. They possess an in-depth understanding of insurance coverage options. They have a wealth of experience in helping many previous patients get coverage.
They contribute to greater claim reimbursement to the medical organization.
Such specialists offer comprehensive medical claims resolution services, including:
- Obtaining reversals of prior and retro authorization issues.
- Filing denial appeals with insurance companies.
- Handling insurance claim denials.
- Determining causes of denial and contacting patients for additional information.
DECO Recovery Management offers eligibility specialist services. Let us help your patients find satisfactory health care insurance. All through the Affordable Care Act Marketplace.
Categories: Hospital Revenues