High deductiblehealth insurance plans (HDHP) are now ubiquitous, and patients have become health carepayers. In fact, NextGen reported: “The amount a consumer must pay before a health plan pays any portion [of their bill] has increased by255% since 2006.”
In the early months of the year (January through March), approximately40–60% of health care bills can be attributed to patient responsibility. Yearly,30% of the average health care bill comes from the patient's pocket.
Slow payment (payment after service) of high-deductible plan patients is thetop collection challenge, according to 83% of physician practices under five practitioners, followed by the difficulties of communicating patient payment accountability (81%).
And despite the rising cost of care,half of patients don’t fully understand what they owe.
Reed Tinsley, a CPA consultant specializing in healthcare accounting said: “Nine out of 10 patients couldn’t tell you what their copay or deductible is.”
Even if patients know what to expect when you collect copays and they understand where they’re at in meeting their deductible for the year, their are still concerns of financial hardship to consider. 67% of Americans say they are either very worried or somewhat worried about unexpected medical bills, according to theKaiser Family Foundation.
Many patients have no clue what financial responsibility they have accrued until long after the time of service, which is surprising considering that92% of consumers want to know their payment responsibilities up front.
In astudy that was updated February 2021,62% of patients said knowing their out-of-pocket expenses prior to service impacts the likelihood of pursuing care. Moreover,65% of patients are more willing to make a partial payment when given a patient cost estimate at time of service.
Providers can only expect to collect50–70% of a balance after a patient visit. This is due to increasing patient payment responsibilities in recent years.
Just think about that. If you are primarily collecting payment after a service, you could be losing 30–50% of the balance.
Furthermore, if a patient’s bill exceeds5%of their household income, the likelihood you’ll obtain payment drops quickly. From patients with high-deductible plans, providers can expect to collect about$0.18 to $0.34 on the dollar.
According to theMedical Group Management Association (MGMA), health care providers send an average of 3.3 billing statements before receiving payment. Once bad debts are turned over to collections, providers only recover an average of $15.77 for every $100 owed—that’s like getting tipped on a dine and dash!
According toathenahealth, practices only collect 12% of outstanding balances, on average, at the time of service and collect nothing at the time of service approximately 35% of the time.
Athenahealth also found that, on average, a practice writes off over 35% of the patient balance after a visit.
First of all, you’ll need a software that can do the heavy lifting in eligibility checks and patient cost estimates. You can do a lot without software to help, but a good software like Rivet can streamline your workflow and increase cash flow.
It’s important to note: You’ll want to make sure your office staff is doing everything in their power to show transparency. That means you should try to avoid jargon in the billing process as much as possible, and offer ongoing staff training so any customer-facing employee can help patients understand pricing. All patients should know what they are paying for and why.
“If you want to collect the money that’s owed to you, you have to be willing to invest some time in making sure staff are trained to help, as a way of showing patients you care about them,” said Ken Hertz, FACMPE, a principal consultant withMGMA.
Rivet is a modern revenue cycle product suite that gives you payer superpowers to unlock more revenue from patients and payers. You can see the big picture of what’s going on in your practice with insurance company contracts, fee schedules, denials and underpayments as well as drill down to understand claims and claims trends. Check eligibility and provide accurate up-front patient cost estimates before services are rendered and model your fee schedules all in one product.
“With changing coverages, deductibles, and eligibility, it can be hard to produce truly accurate estimates at scale. However, with Rivet, running eligibility and estimates is a quick, one-stop shop.”
— Kellie Ickowski, Audubon Women’s Medical Associates practice administrator
It may seem simple, but collecting some up-front payment will always be better than none. The more you can obtain, the better off you will be. That doesn't mean you have to collect 100%, but it does mean that collecting more now is important to decrease your patient AR days. Start by collecting a percentage of the total cost: whether it be 40%, 60%, 80% or 100%. You can set an amount that "has to be paid" and give options to pay more. That way, you'll get a certain amount before service with the possibility of more!
As a Rivet customer, we can walk you through what would be good for your practice. Our suite ofpatient pricing tools can help streamline staff members’ workflow, plus improve patient satisfaction. With Rivet, you can even collect payment through HIPAA compliant text messages and emails.
For more information about the tools Rivet provides,schedule a Rivet demo.
