Motivate on-time payments to protect your revenue
Despite attempts to bring costs down, healthcare costs are continually rising, and patients are paying the price. According to the Kaiser Family Foundation (KFF), premiums for employer-sponsored healthcare rose to $21,342 in 2020, a 4% increase from 2019. And, workers are paying more for their healthcare than ever before – family premiums have risen 55% since 2010. Considering wages grew 27%, and inflation has tracked to 19% since 2010, patients’ pocketbooks are being hit hard.
Exacerbating the struggle to pay for healthcare is the trend of high deductibles; KFF found 83% of plans had them. The average deductible dropped $11 since 2019 to $1,644, but the fact remains that deductibles have risen 111% in the last decade. Out-of-pocket (OOP) responsibility is another burden for many; KFF found that 18% of workers had plans that required $6,000 or more in OOP payments.
Due to the shift in responsibility for payment, many organizations find they are more dependent on patient collections than ever. One study reported that 30% of healthcare services become patient responsibility – putting the percentage of patient payments responsible for overall reimbursement in the same category as many large insurance companies.
One study found it is four times more expensive to collect payments from patients than insurance. Given its high costs to collect and percentage of overall revenue, healthcare organizations need to prioritize patient balances and encourage on-time payments to build a resilient revenue cycle that keeps cash flowing.
Best practices to motivate on-time patient payments
Many patients panic or get angry when they receive a denial EOB from their insurance company. Denials also lead to a loss of confidence in the organization's billing practices, which creates questions about the validity of balances resulting in late payments.
Provide estimates and payment options before services whenever possible
No one appreciates getting a bill they aren’t expecting. Consider presenting cost estimates and collecting deductible amounts at the time of the visit to avoid days in accounts receivable and expenses associated with sending statements.
Be transparent with pricing
Hospitals must post charges for common services, and other healthcare organizations are beginning to follow suit. Many patients think like consumers and appreciate being able to explore costs without assistance.
For example, Quadax offers Payer Price Transparency – a user-friendly tool that integrates directly into an organization’s webpage. Payer Price Transparency allows patients to explore services and create personalized estimates interactively.
Use clear language to explain balances
Although patients’ understanding of healthcare’s billing processes has improved, many still find their statements confusing. Be sure that terms such as co-insurance and deductible are defined in some way on the bill itself. Some organizations use dunning message space on their statements to remind patients of billing definitions and what to do if a claim is denied.
Provide convenient payment options
Patients have a consumer mindset and expect their doctor or lab bill to be just as easy to pay as their utility bill. In addition to ‘standard’ ways to pay, consider adding electronic options such as Apple Pay and Google Wallet, especially for in-office visits.
Automate payment reminders
According to one automated reminder vendor, text messages with linked payment options have a 68% engagement rate, which is much higher than emails and phone calls. In addition to increased engagement, electronic reminders offer the benefit of labor and material savings. Payment plans using credit-card-on-file is another effective way to keep patient payments moving and keep costs down.
Protect your revenue with patient collections best practices
The most recent Bankrate survey found “fewer than 4 in 10 Americans could pay a surprise $1,000 bill from savings,” which is an alarming statistic if 30% of your revenue is dependent on patients. Employing our suggested best practices can mitigate the effect of patient balances on your revenue cycle and create RCM resiliency that serves your organization now and in the future.
Learn more about Best Practices to Create Revenue Cycle Resiliency in our white paper here.
Interested in learning how Quadax can help you create an efficient claims cycle and increase patient payments? Contact us today.
Let’s Take On The Revenue Cycle Together!