The following is an important excerpt from a recent Emdeon sponsored HFMA Executive Roundtable titled Strategies for Upfront Collection.
The key to effective revenue cycle performance is collecting patient payment early in the revenue cycle, when payment responsibility is top of mind to the patient and cost to collect is lowest. Yet calculating and communicating financial obligation up front is often a challenge. With this in mind, revenue cycle leaders discuss ways they structure the financial clearance prior to service, metrics for performance improvement, and key strategies for developing a culture of collection.
How is your organization working to provide financial clearance prior to service?
Leslie Richard: We pre-register scheduled patients, obtain patients’ benefits information, and use a price estimator solution to capture patients’ financial responsibility prior to service. We make attempts to notify the patient of the financial obligation prior to service. If a patient is not able to pay in full, then we ask for 50 percent payment. If a patient is unable to pay that amount, then we try to secure a good faith deposit.
Carol Plato Nicosia: We ask for payment of the patient’s responsibility for elective services prior to admission. For years, we have been using software that helps us put in a CPT code or a description of the service and arrive at a pretty close price estimate. We give an automatic 50 percent discount to any uninsured patient, and if the patient is not able to meet even that 50 percent obligation, then we run a credit check to determine the propensity to pay. We offer long-term payment plans for those with payment difficulty. We also provide charity care to patients who cannot meet their financial obligations.
Katie Davis: We make every attempt to let patients know their financial responsibility based on their coverage before they come in. We currently communicate this financial obligation through phone calls. We are not 100 percent successful in reaching all patients prior to service. However, we give all information pertaining to the financial obligation to front-line registrars at the point-of-service, so they can answer patients’ questions and explain how out-of-pocket amounts were calculated when the patient arrives for care.
What are some of the most common sources of error when determining patients’ out-of-pocket expense?
Davis: Our most common source of errors comes from insurance companies not having updated databases. We look to see if patients are eligible for coverage anywhere from two days to two weeks ahead of service. Insurance companies may list patients as eligible in their databases. But by the time a patient comes in, has the service, and the bill drops, the insurer may have removed the patient from its database because coverage no longer applies.
Philip Hardin: We find the best practice for providers is to check eligibility multiple times, during the preregistration process and during admission for the actual treatment, to minimize the impact of any change in eligibility or any of those accumulators, such as deductibles or co-pays.
Richard: Another common challenge is when a physician orders a test and the radiologist expands it. For example, while providing a scheduled abdominal ultrasound, a radiologist may determine need for a pelvic ultrasound as well. As such, an estimate for the pelvic portion of service wouldn’t have been included. To improve accuracy, we’re asking radiologists when they most commonly will add on an exam. If, for example, a pelvic scan is included 90 percent of the time when providing an abdominal ultrasound, then we will know to work the account differently from the beginning.
Michael Taylor: The most common sources of error when determining patient out-of-pocket expenses are related to the more challenging PPO co-pay estimates. It’s the complexity, with the combined analysis of the estimated cost of service, the contractual language and rates, and then the overlay of the benefits on top of that.
We had a cumbersome process for making PPO estimates. We went into our system, created some queries, and added the ICD-9 procedure codes. We weren’t able to search by narrative. We developed estimates for a few of our top contracts, but it was just in a readable format, so there was a lot of interpretation involved, and somebody had to do the calculation manually. In January 2011, we implemented a tool that does all of these functions. We’re hoping this will produce productivity savings.
What metrics are most useful for improvement?
Richard: We monitor POS collection as a percentage of net patient revenue as well as a price per patient target, and the number of price estimates we complete for scheduled patients. Those are a few of the things we monitor to see if we’re improving the collection target.
Also, we include patient access performance in the monthly report of key financial indicators for the organization. Doing so supports visibility of overall performance and serves as a foundation for conversations with our hospital CFOs about where strategies and opportunities lie.
Lisa Grodevant: If we want to drill down in our performance, we look at payer mix or use benchmarking. We benchmark across our hospitals, facility to facility, outpatient area to outpatient area. We use national benchmarks on a limited basis, such as the percentage of net revenue collected, but we don’t do benchmark comparisons on a monthly basis like we do with productivity standards.
Taylor: We want to trend our up-front cash collection at 15 percent of total private pay cash collection on an annual basis, so our target for the staff each month is somewhere around 15 percent. We’re measuringpr-eregistration credit card phone collection separately, and we’re targeting these areas for the month at 33 percent of our up-front cash collection. For eligibility and verification, our metric for financially secure scheduled service is 100 percent. There’s no movement from the financially secured standpoint. We measure the number of patients we actually got in touch with before they arrived for service, and that’s an 80 percent target. Our pre-admission rate for surgeries is 80 percent, and for ancillary services, such as radiology, it’s 60 percent— because we have a high walk-in volume.
We drill down the measurements to staff level by facility and the type of service performed. Some of our larger facilities (over 100 beds) have a large surgery service, especially outpatient surgery, and we would expect a higher collection percentage from those facilities than for a rural facility that has a small surgery population.
Read this HFMA Educational Report in its entirety to learn about more revenue cycle strategies for addressing upfront collections. Also, discover how Emdeon can help you with this today with our Patient Access Management Solutions! Call us at 877.EMDEON.6 (877.363.3666).
Revenue Cycle Strategies for Upfront Collection
