For most of us, New Year’s Eve is a time of celebration, where we ring out the old and ring in another year filled with possibilities.
For healthcare executives, especially those in charge of revenue cycle management (RCM), the evening’s champagne toasts may be accompanied by some concerns about increased risk. That’s because January 1, 2018 is also the day that patient deductibles re-set to $0, and many of them rise.
In the past, starting over at a $0 deductible wasn’t so worrisome. Now, however, in an era where roughly 40 percent of adults in America have high deductible health plans (HDHPs), healthcare executives are right to keep a wary eye on the countdown clock – especially given the results of a recent study by a team from the University of Michigan Institute for Healthcare Policy and Innovation that was published in JAMA Internal Medicine.
The survey of more than 1,600 participants enrolled in HDHPs showed just 40 percent had purposely set aside money for future health services. In addition, only 25 percent had discussed the cost for a service with a clinician, and a mere 6 percent had attempted to negotiate a price for a service. In other words, the majority of Americans with HDHPs are still treating the cost of healthcare as they did when their deductibles were low and out-of-pocket expenses were minimal.
Never is the financial risk to providers greater than when patient deductibles re-set to $0, because it means they’re as far away as they can be from collecting from payers – which is always the more reliable revenue source. That’s why it’s important for providers of all sizes to implement proven strategies that will help them capture the revenue they’re due while maintaining good relationships with patients, such as:
• Improving communications and engagement with patients who have HDHPs. Rather than waiting until after services are delivered, providers should have a financial counselor engage with these patients prior to care to outline expectations and identify any potential obstacles, such as the need for a payment plan. A patient estimation tool can greatly simplify this conversation by creating a written estimate of all costs related to a procedure, including what the insurance company will pay and what the patient will likely owe. Offering an estimate in advance has been proven to greatly reduce the risk of non-payment. If the revenue team doesn’t have this type of tool they can at least speak in general terms to determine a patient’s threshold for making payments. Taking this approach eliminates surprises on both sides and creates realistic expectations for payment.
• Take the mystery out of billing statements. There is no doubt that healthcare billing statements can be difficult to read; even the experts sometimes find them confusing. By simplifying bills, and making advisers available to answer patient questions in everyday language, providers make it easier for patients to understand what they owe and why, leading to faster and more complete payments.
• Expand payment options and make them more convenient. A provider’s best chance of being paid for services is when the patient is still in the healthcare facility, as evidenced by this Advisory Board study of 400,000 claims. The study found that two-thirds of patients with a deductible under $1,000 were likely to pay at least some portion of what they owe, versus just 36 percent of those with higher deductibles (above $5,000). Offering multiple options, including credit cards at the point of service (or via eCommerce sites) and mobile technology-based services such as Apple Pay greatly reduce the risk of non-payment.
• Offer financing options. In the current economy, many patients are unable (or unwilling) to save much for unexpected expenses. Even routine procedures such as childbirth, MRIs, or surgery on a broken toe can result in thousands of dollars in billing, while more complex procedures can cost even more. Working with patients to develop installment plans, preferably with an auto-pay option, can make payment more affordable for patients while ensuring providers receive appropriate, on-time payments. Enabling patient-initiated payment plans offers patients an easy way to automate structured, ongoing payments that follow the rules the provider has in place.
When the ball in Times Square drops at midnight, it doesn’t just signal that 2017 calendars are obsolete. It also re-sets patient deductibles, once again raising revenue cycle risk for healthcare providers. By adopting RCM technologies that are designed to manage today’s world of HDHPs, providers can implement consumer-oriented strategies that help ensure that patient responsibilities are collected quickly, completely, and in a way that makes the provider/patient relationship stronger.
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