Maintaining financial stability at the practice is no longer easy with high deductible plans passing the cost of care on to patients. One of the effects of consumer driven health care is that patients no longer can expect that their health plan will pay the entire bill leaving only a small copayment for the patient as their responsibility. Many plans now have a complex mix of copayments, deductibles and co-insurances which need to be met prior to the plan paying for any part of the visit or procedure. Two statistics that confirm this are:
- The National Center for Health Statistics reports that in 2008, 19.2 % of patients were covered by a high deductible plan which has now increased to 32.5% in 2013.
- The Milliman Medical Index (MMI) indicates the increase in patient out of pocket expenses increased 78% between 2007 and 2013.
Practices are combatting this by implementing new revenue cycle programs to enhance cash flow by engaging their patients. Two solutions which go hand in hand are the use of “Time of Service Estimates” (TOS) and “Credit Card on File.”
Time of Service Estimates (TOS) are defined as the process of creating an estimate of the patient’s total financial responsibility. In the past, this information was gathered by a staff person calling the insurance company on each individual patient which is time consuming as one waits in a cue to speak with a person. Some health plans now offer this functionality free on their website, however, the time spent navigating each payer site and obtaining website access for this task can be significant. Because website requirements and design are different, this is not an efficient tool.
Benefits to the practice of creating estimates can include a reduction of days in A/R, self-pay accounts, paper statement costs and accounts going to collections. Disadvantages are less; but there may be an increase in refunds if not administered carefully and staff selection is key as they must be engaged in the process. Some software programs utilize the practice’s own claims data to develop these estimates.
Practice staff can now develop a written estimate which can be reviewed; verbally, in person or on the telephone; and provide an avenue to review the expected patient responsibility prior to the service being rendered. The addition of this function changes the workflows in the practice may include financial counselors or billing staff in the discussion of payment options at the time of check out when a procedure is to be scheduled. This allows the patient to ask questions and understand their options for payment.
Practices can centralize this function and then follow up with a written quote which can be emailed or mailed to the patient inclusive of the branding of the practice including logo, names of physicians and locations of service. The creation of an estimate can offer a transparency of pricing while engaging the patient and setting the upfront expectation of payment.
Once the estimate is developed and accepted by the patient; it is essential to have a process in place to obtain payment. Practices can be proactive and collect the monies due to them in advance by offering a “credit card on file” option for patients. This option moves the back end billing process to a front end collection process while enhancing cash flow to the practice.
Credit Card on File offers patients two options for payment. Practices can accomplish this task by collecting and storing credit card information to adjudicate the claim once the patient balance is known. Additionally, practices can process an electronic check. There is no need for the patient to wait in the office or call on the telephone as the process includes an emailed receipt to the patient upon conclusion of the transaction. A distinct advantage to “Credit Card on File, is that it may offer flexibility by processing a one time or a series of scheduled payments to satisfy the patient balance.
Staff training should include policies and procedures to integrate this into the practice workflow, scripting, role playing, and training of staff to access the system and monitor payments. Procedures for patients whom do not wish to leave a credit card need to be in place. This is a successful retail model (similar to pay pal or amazon) which can easily be applied in the medical practice setting.
The processing of payments is different since 10/1/15 with the new Payment Card Industry (PCI) standards. All transactions must be encrypted and protected. PCI compliance eliminates the process of staff writing down credit card numbers, expiration dates and other data on pieces of paper or storage of these details in non-secure locations. PCI standards designate the minimum set of requirements for protecting account data. These include; proof of maintaining a secure network, protecting card holder data, maintaining antivirus software, implementing access control, monitor and testing of networks and maintaining information security.
The ability to administer and automate payment plans is essential to remain financially stable. As the deductibles grow in size, practices may find patients require a longer period of time to pay their debt. Automation through a practice management system or vendor software can ease the burden for both parties. Developing improved collections is appealing to hospitals, physicians and healthcare organizations. It also relieves the stress on patients when options exist to repay their debt. Time of Service Estimates and Credit Card on File creates a win-win for the patient and the practice.