Many insured patients have no comprehension of common insurance terminology. Terms like “coinsurance”, “deductibles”, “secondary insurance” and “in-network” versus “out-of-network” can sometimes be difficult to explain.
“Without trained staff available to help patients, it’s going to become a self-pay nightmare for a lot of hospitals…a key culprit is confusion”, says Richard Madison, VP-Revenue Cycle at Crozer-Keystone Health System, Springfield, Pa.
For hospitals, the major problem is the high out-of-pocket costs for consumers who choose low premium plans offered on the exchanges. The table below from the Healthcare Financial Management Association Newsletter, February 2014, illustrates typical average out of pocket expenses for the four insurance exchange plan categories.1
In the early days of exchange enrollment,
silver plans were the most popular option. On
average, those plans carry a $2,907 deductible
for an individual and $6,078 for a family. (Graph by HealthPocket, analyst of health insurance plans.)
“It’s very likely that the individuals buying these plans don’t understand them and “won’t understand that they are on the hook for this much money.” Considering that the U.S. median household income is about $50,000, those deductible levels will be difficult for many patients to pay.1 Considering of today’s economic environment, it is vitally important, from the hospital’s point of view, that the patient’s financial responsibilities and expectations be disclosed early.
As a matter of survival, hospitals must seek payment up front to minimize the amount of receivables. And hospital financial officers should be acutely aware that the value of these receivables reduces substantially over a very short period of time. Collectability of receivables drops by 40%-80% once they are 90 to 120 days old.
Collecting a portion of the patient’s financial responsibility at the time of service acts, in effect, like a down payment, and serves to offset the cost of care, immediately improving the hospital’s cash flow.
Three important things happen when you say to a patient, “I’ll need payment up front.”
You are viewed as professional. They respect you. The patient now sees you as a person who has payment policies in place.
They are clear on what is expected of them.
A commitment is formed: Your client is fully committed when they pay a deposit.
“It’s a psychological thing. Without a deposit, there is no real commitment from your client.”
By working with your customers in the beginning you will avoid future payment problems and maintain a lasting professional relationship.
When customers become delinquent on paying, they are often reluctant to use your services. This results in a loss of additional revenue; revenue you would have seen if you had not been lax on your collection and credit policies.
“Hospitals must provide good estimates of a patient’s out-ofpocket responsibility before
scheduling elective care so that patients understand what they will be expected to pay.” Richard Madison, Vice President-Revenue Cycle at Crozer-Keystone Health
Over time, returning patients will know what you expect and they will be prepared to write you a check for the deposit.
Thus, with the age of high deductible plans firmly upon us, and since its more economically necessary now than ever to collect, prior to rendering service, as much of the patient’s deductible obligation as possible, Medical Recovery Services’ has designed a simple, user-friendly Point of Service Patient Cost Estimator tool for hospital registration and pre-registration areas.
This software tool was developed as a relatively inexpensive, highly customized, user-friendly solution to providing patients with timely and accurate estimates of their financial responsibility at the start of their hospital experience.
The Patient Estimator employs your facility’s specific clinical utilization, charges, contractual reimbursement and local policies to create pricing transparency, satisfy mutual expectations, provide higher patient satisfaction, reduce your days in A/R and ultimately (and immediately) increase your cash flow.
In addition, Medical Recovery Services will install your Patient Estimator and train your staff on-site with minimal interruption to your schedule.
For more information, contact Medical Recovery Services
Medical Recovery Services is a full-service revenue cycle company assisting
hospitals and surgical centers in achieving their full earning potential since 2004.