Get proactive with payments: How medical groups can fearlessly revamp revenue cycle management Insight Article - February 26, 2019 Billing & Collections Sign in to save Matt Seefeld With spring right around the corner, medical groups are thinking about a lot of things, from allergy season to taxes and summer vacation planning. What they’re not necessarily thinking about: revamping revenue cycle management (RCM) processes. Case in point: Many practices are still using paper bills. MGMA’s first Digital Payments Progress Report, released in 2017, found that more than 77% of medical groups indicated they still use paper, even though most groups are using certified EHRs.1 Many practices’ billing habits are not just out of line with digital healthcare practices; they’re also out of touch with the larger trend of consumerized medicine, which is influencing payments and RCM. Patients are now our third-largest payer, according to a TransUnion report2, which also noted that patients experienced an 11% increase in average out-of-pocket costs during 2017. Also of concern: A whopping 79 million Americans reported having problems with medical bills or debt, a recent Commonwealth Fund report revealed.3 Understanding RCM challenges Healthcare providers have seen patient payment responsibility rise over the past decade, with employers increasingly turning to high-deductible health plans (HDHPs) to limit premium growth.4 Because payers are covering less, patients are increasingly seeing bills for services weeks after they’ve received them, often when they least expect them. The problem is big enough to have inspired recent legislative efforts to protect patients from surprise bill balances.5 The larger implication of sticker shock is that patients aren’t in a rush to pay a bill on time, if at all. As a 2017 TransUnion analysis noted, 68% of patients with bills of $500 or less did not pay their balances.6 As such, medical groups devote the bulk of their resources to collections on the back end — mailing paper statements, making manual phone calls and whatever it takes to capture revenue. But using in-house resources to chase patients with past-due bills often isn’t the most productive use of a medical group’s time. Getting proactive Revamping your RCM strategy means adopting a new outlook and approach centered on proactive behaviors — allocating more resources toward the front end of the revenue cycle. The proactive medical group verifies insurance eligibility the moment the patient makes an appointment. This allows the practice to identify any potential issues or educate the patient on his or her benefit plans. This could mean providing an explanation for why a certain procedure, such as an elective surgery, isn’t covered. The proactive medical group uses a patient payment estimator tool to review out-of-pocket costs and discusses them with patients before they see the provider. Having a conversation with your patients prior to the appointment creates an opportunity to attempt to collect any outstanding and/or estimated balances up front. Prior to the appointment is also the best time to discuss payment plans and financing options, if the out-of-pocket expense proves to be too burdensome. This empowers patients to choose to reschedule non-critical appointments for a time when they are in a better financial position. The more payment the medical group can secure on the front end, the less work on the back end and the more likely it is the medical group will collect from the patient. The proactive group also uses text or email appointment reminders so that patients can confirm or reschedule as needed in an effort to prevent no-shows. Medical groups can verify insurance eligibility again immediately before the appointment by using automated batch eligibility checks or at the time the patient checks in. Upon a patient’s arrival, front office staff can attempt to collect any balances, rather than ushering the patient back to see a provider with only a copay as a deposit. Patients don’t like to be surprised weeks later with a bill in the mail when the practice had ample chances to discuss out-of-pocket costs in person. All of this work up front ultimately reduces the number of hours a practice will need to spend cold-calling patients after an appointment. Even then, consider the use of an auto-dialer, which makes follow-up phone calls to collect remaining balances. Identifying relevant data and analyzing it can isolate problem areas in the revenue cycle pertaining to payments. Eliminating paper billing can be part of a comprehensive, proactive RCM strategy, too. Adding electronic payment options and e-statements and collecting email addresses makes paying bills easier and more convenient. The MGMA survey results also suggested that keeping a credit card on file (CCOF) to pay small balances less than $200 can be beneficial in reducing patient bad debt/write off (36%), days in patient A/R (34%) and cost of collections (34%).7 Keeping your business healthy Providing excellent patient care should be the primary focus of medical groups, not fretting over patient payments. Communicating with your patients about financial obligations is an important factor in keeping them satisfied, retaining them for future medical needs and getting referral business from their friends and neighbors. Tailoring or revamping RCM practices to accommodate larger consumer payment trends will allow a medical group to continue to put patient care first while maintaining a healthy bottom line. Notes “MGMA member survey reveals strategies to improve patient billing, payments, satisfaction.” MGMA. Sept. 27, 2017. “Patient responsibility increases 11% in 2017.” TransUnion Healthcare. March 5, 2018. Available from: bit.ly/2Fz1kqZ. “Survey: 79 million Americans have problems with medical bills or debt.” The Commonwealth Fund. Available from: bit.ly/2QWbfI8. Miller G., et al. “High-deductible health plan enrollment increased from 2006 to 2016, employer-funded accounts grew in largest firms.” Health Affairs, Vol. 37, No. 8, Aug. 1, 2018. Available from: bit.ly/2sz70J2. Bluth R. “Senators unveil legislation to protect patients against surprise medical bills.” Kaiser Health News, Sept. 19, 2018. Available from: bit.ly/2MM8dEv. “Patients may be the new payers, but two in three do not pay their hospital bills in full.” TransUnion Healthcare. June 26, 2017. Available from: bit.ly/2MgSKxv. MGMA.