Failing to Prepare Means Preparing to Fail

Creating a Patient Financial Profile System Prior to Encounter

These are difficult times for healthcare organizations’ revenue cycles. As patients bear more responsibility for their healthcare costs, hospitals assume greater risk: They are reasonably concerned that they will not be fully compensated for services they provide. Traditional strategies that address this issue only after patients are admitted simply are not yielding the financial results that hospitals require to maintain a healthy balance sheet.

Through proactive measures, many organizations are applying new strategies for optimizing the revenue cycle. One such activity is to develop a patient financial profile system based on patient data collected prior to the encounter, including:

• insurance eligibility and benefits verification
• an estimation of the patient’s financial responsibility
• credit score
• healthcare risk score
• income
• address verification
• hospital payment history

With this information, hospitals can determine a patient’s likelihood to pay their bill and make provisions for alternate funding sources before the patient is even admitted.

Some organizations are taking it a step further with pre-admission workflows that automatically group patients into one of three categories based on projections of their payment responsibility:

• Group 1 is comprised of patients most likely to pay their hospital bill and are assigned to the patient financial services department for a pre-visit resolution;
• Group 2 includes those individuals who have a good chance to qualify for charity care under the hospital’s policy; and
• Group 3 patients are likely Medicaid candidates who are assigned to a financial counselor for help with the application and follow-up process.

Healthcare organizations that apply best practices to a patient profile strategy will be rewarded with fewer administrative errors and increased staff efficiency. Among the workflows hospitals can implement to create an effective patient financial profile are automated revenue cycle tools that vet patient demographic data, eligibility benefits and the patient visit estimate to produce an individual assessment that includes a credit score, a “propensity to pay” analysis and a financial screening and triage.

In conjunction with a patient financial profile strategy, it’s important for hospitals to take an aggressive approach to pre-service collections. Successful organizations are requesting payment up-front from patients that have income and addressing staff reluctance to this pre-service collections approach by explaining the patient-centric benefits it offers.

They also are training registration personnel to more efficiently handle payment concerns upon admission and applying pre-service payment grouping models to back-end collections to better address ongoing patient financial issues. Finally, hospitals track their revenue cycle successes by defining key metrics based on revenue cycle goals, such as increasing point-of-service payments with IT solutions.

To find out how to create a patient financial profile for your organization, listen to a recent HFMA podcast and learn how one healthcare organization was able to improve cash flow and reduce bad debt by creating a patient financial profile strategy, or visit us online.

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