Executive briefing: How billing and collections impact the patient, and what providers can do to protect their bottom line

Billing and payment for medical procedures are often overlooked aspects of the patient experience and may be the reason many physicians are seeing increases in patient complaints and their bad debt year over year.

Confusing medical bills and frustrating collections processes can derail satisfactory clinical experiences in the hospital or at a physician's practice. Disgruntled patients unsettled by complex bills — then collection letters and poor interactive voice technology phone calls — are less likely to understand their financial responsibilities, and subsequently, less likely to pay on time or at all.

This content is sponsored by Zotec Partners

This is an increasingly prevalent problem, especially as insurance carriers see more consumers enrolling high-deductible health plans, in which they are responsible for a significantly greater share of their healthcare costs. Since the advent of the health savings account in 2003, deductibles have increased as employers resist escalating premiums. According to the Kaiser Family Foundation, the percentage of covered workers with deductibles of $1,000 or more rose from 10 percent in 2006 to 46 percent in 2015 — a 360 percent jump. Among covered workers with a general annual deductible, the average deductible for single coverage in 2015 was $1,318, up from $917 in 2010.

"The [greatest] impact today is the big shift from business-to-business healthcare to business-to-consumer healthcare," says T. Scott Law, founder and CEO of Zotec Partners, a revenue cycle and practice management provider based in Carmel, Ind. He says the increasing prevalence of HDHPs has had "a material impact on the revenue cycle process," as these plans characterize a major shift in the responsibility to pay.

Prior to this shift to high deductible health plans, the carrier would cover about 80 percent of medical expenses, according to Mr. Law. Now, with patients accountable for almost all of the first $1,200, bad debt is rising, according to public accounting and consulting firm Crowe Horwath's first quarter 2015 edition of its hospital benchmarking data.

The Crowe RCA Benchmarking Analysis, which evaluated 420 hospitals, showed as the number of HDHP enrollees increased from 15.5 million in 2013 to 17.4 million in 2014, insured patients' share of total uncompensated care increased dramatically, with bad debt up 22 percent and charity care rates up 130 percent in Medicaid expansion states. In non-expansion states, bad debt and charity care rates rose 35 percent and 130 percent, respectively.

These trends underscore the need for hospitals and physician practices to implement solutions that can enhance the patient/consumer collections process and safeguard the revenue cycle by making the experience easier for patients.

To create an effective billing and collections system, focus on customer service
In essentially all industries outside of healthcare, companies ceaselessly strive to provide the best possible customer service. Healthcare lags substantially in that sense because previously, third-party payers paid the bills. From long wait times to spotty transparency into cost and quality information to incomprehensible medical bills, healthcare consumers commonly endure less than desirable experiences navigating the healthcare system. At the same time, they have grown accustomed to exceptional customer service in other industries and expect the same consumer-centric treatment in their healthcare.

Mr. Law gave the example of Amazon, one of the most highly esteemed companies in terms of customer service. "On Amazon, you get prime service," he says. "Your package is delivered right to your house — fast. Consumers are expecting that kind of interaction with healthcare billing. If that provider can’t give that experience, it reflects negatively on the overall experience."

When an Amazon customer reports a problem, a customer service professional responds in a rapid manner, illustrating an emphasis on fulfilling consumers' demands for immediate help and highlighting Amazon's commitment to customer service. Unfortunately, that kind of timeliness is not common in healthcare. When it comes to medical bills, which patients will likely have questions about, the lack of timely response can damage the patient's overall experience.

Negative patient experiences can translate to reduced patient satisfaction scores in HCAHPS surveys, which ultimately impact reimbursement. Bad experiences can also lead to patients not understanding or even avoiding paying their bills.

Build a foundation for billing and collections grounded in best practices
To prevent the billing process from tarnishing patients' experiences, healthcare providers must focus on two principal strategies: managing patients' expectations upfront and empowering them to be more accountable for fulfilling their financial responsibilities, according to Mr. Law.

Central to managing patients' expectations is presenting the hospital or physician practice's billing department as professional, friendly and dedicated to providing the most worry-free collections process.

Mr. Law says it is concerning "when physicians must oversee billing and collections duties on top of caring for their patients." These added responsibilities can have a negative impact on the overall quality of care, may contribute to a diminished view of the practice overall and result in poor interactions between patients and staff.

"I think [practices and hospitals] should be investing in training their people," says Mr. Law. "There should be staff who are there solely for collecting money and insurance information," as opposed to clinicians juggling these responsibilities on top of their clinical ones.

However, in reality, many physician practices and hospitals do not have the bandwidth to designate or hire employees to work exclusively on billing and collections. In these cases, providers might outsource these responsibilities to revenue cycle solutions companies that can implement effective billing and follow-up methods to ensure patients pay their bills.

Zotec Partners' solutions enhance revenue cycle interactions to help instill positive patient perceptions of the healthcare experience, and secure reimbursement and future service revenues for providers. The company employs a patient experience methodology that empowers patients to make payments through several tools that are easy and convenient to use.

Its advanced interactive voice response technology includes a simple authentication process, an understandable format with minimal menu options so it is easy for patients to navigate, convenient text-back features, quick payment options and immediate live operator assistance. Zotec Partners operates a call center led by a customer service expert trained in optimizing the patient experience. It also offers a secure and user-friendly patient portal that can be used on a desktop computer or mobile device. Using the portal, patients can pay their bills, view their account history, request statements and update insurance information.

As in other industries, the key to securing a positive experience and safeguarding payments from consumers is simplicity and ease of use. With solutions like Zotec Partners', patients have access to several convenient and straightforward tools to pay their bills. However, it is important to vet revenue cycle companies carefully as they are not all created equal — many still use outdated follow-up collections methods that emerged years ago.

With companies that specialize in billing and collections and help safeguard positive patient experiences, there is no need to overburden the clinical staff to manage these responsibilities, which can be challenging for those not trained to handle them. 

"A doctor is a seasoned professional in caring for their patients and diagnosing the issue based on their training and education, not just on what patients say," says Mr. Law. "Apply that same science to billing." 

For a positive experience, arm patients with information
Hospitals and physician practices must adopt a "help me help you" mentality when it comes to billing and collections. Whether they seek an external partner that specializes in securing patient payments or acquire the resources to enhance their own billing and collections department, interactions with patients should always be consumer-centric.

In addition to providing the portals and tools for actually making payments, the key is to provide patients with all of the information necessary to understand what they owe and when payments are due.

"The first thing you have to do is introduce the process to the patient at the time of service," says Mr. Law. Clearly explaining the series of steps involved in the billing and collections process to patients upfront remedies any worries they might have regarding the payment process. It also helps patients feel more in control of their healthcare experience because they will know what to expect when they receive their bills.

To achieve this, many providers send a letter of introduction to patients that details the billing and collections process ahead of the time of service, followed by subsequent letters requesting payment.

However, written letters can cause issues of their own.

"It is frustrating to send a patient letters four or five times," says Mr. Law regarding instances in which letters are sent but the patient does not make a payment. "You have to be able to resolve these issues quickly and efficiently."

That is why broader follow-up methods, such as claim-tracking status, patient portals, interactive voice response technology and text messaging, are more effective. "Those are all consumer-driven events that many providers are ill-equipped to handle" without procuring outside support. While not representative of the majority of the patient population, some patients are inclined to avoid paying their bills, and the increasing rate of HDHPs could exacerbate this problem. Therefore, it is imperative to be as vigilant in collections and follow-up efforts as possible.

These "consumer-driven" modes of communication also help expedite possible discounts that can be awarded to patients, in turn helping speed up receipt of payment.

Patients expect and demand the same level of customer service they are used to receiving in the retail, dining and travel industries. Billing and collections — though not a clinical aspect of healthcare — is a critical factor in determining patient satisfaction. With the proper systems and tools, hospitals and physician practices can empower their patients to take greater accountability for their financial responsibility, and providers will see an increase in revenues.

As the population of patients with HDHPs grows, the need to enhance the billing and collections process has become particularly pertinent. The evidence is plain; data shows a positive correlation between the increasing rate of HDHPs and uncompensated care, as well as patient complaints or requests for discounts. Hospitals and physician practices can implement best practices to mitigate these trends in their billing and collections department, such as managing patients' expectations upfront and empowering them to be more accountable to pay their bills. Alternatively, healthcare providers can seek help from dedicated professionals trained to do just that. Whichever direction providers choose, it is essential to understand carriers will no longer completely pay for services rendered. Healthcare providers cannot just ignore the largest payer — the patient — or they will see the effect in their bottom line.

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