With all the focus on high medical costs, increased regulatory scrutiny on medical debt collections, and the resulting revenue cycle challenges, it's easy to overlook that most patients want to pay their medical bills.
By providing a simple solution that focuses on patient experience, Erlanger Health System, based in Chattanooga, Tennessee, was able to significantly increase self-pay collections and maintain high patient satisfaction.
During a March webinar hosted by Becker's Hospital Review and sponsored by CarePayment, Brian Brown, vice president of CarePayment, and Chris Spady, vice president of Erlanger Health System, discussed how Erlanger used CarePayment as part of its financial transformation.
Four key insights:
1. The continuing patient financial crisis forces providers to focus on the patient's role in the health system's financial journey. According to Mr. Brown, about half of all households have some degree of medical debt, and 35 percent of patients said their bills kept them from seeking medical care in the last year. "As a result, providers have really started focusing on the patient's role in their financial journey," Mr. Brown said. This has included addressing new and existing complex government regulations, improving patient experience, reimagining the collection process and creating personalized payment models.
2. Erlanger began its financial transformation with a six-month strategy focused on five key areas. Erlanger is a seven-hospital system in Tennessee and North Carolina. Its financial transformation strategy involved "Reimagining patient collections and increasing our financial strength, while driving patient loyalty with a new patient financial experience and engagement strategy," Mr. Spady said.
The goals of the strategy included driving more cash on hand, reducing complexity and time spent managing the in-house payment plans, streamlining processes, changing the culture and shifting the community's perception of a safety-net hospital. Erlanger's five areas of focus were:
- Patient access: Submitting infusion claims on a per-session basis instead of monthly, which yielded an $8 million cash acceleration
- Coding: Hiring a new coding manager and investing in contract coders, which reduced bill hold from five days to three
- Business office: Adopting Epic's Financial Pulse reporting program, which increased engagement
- Self-pay: Engaging CarePayment, which helped address self-pay patients' accounts receivable (AR) days and patient satisfaction
- Denial reduction: Flipping one- or two-day nonsurgical inpatient stays to outpatient reduced denials
3. As a result, Erlanger reduced overall hospital AR days from 68 to 45 days, increased cash by $84 million and reduced self-pay balances from $145 million to $55 million.CarePayment helped Erlanger recognize a tremendous opportunity to increase collections through zero interest payment plans. "CarePayment used its metrics to show us just how big of a hole we had," Mr. Spady said. “To take advantage of the opportunity, CarePayment qualifies every patient with no application. At time of service, patients can pay immediately for a discount or enroll in a payment plan. "If we can't get them to commit to one or the other, we begin calling day one, offering the CarePayment program " he added. "If they don't engage after 60 days, we automatically enroll them in CarePayment instead of going to collections. It's a softer, more compassionate collection ask."
4. CarePayment generates significant financial benefits as well as patient satisfaction. Erlanger's self-pay initiative has generated $54 million in total patient collections, with $33 million from accounts greater than 60 days old; 40 percent of participating patients would not have qualified for traditional financing programs. "In addition, 93 percent of patients were satisfied with the CarePayment billing process, and 84 percent said they would return to Erlanger in the future," Mr. Brown said.
CarePayment offers an environment to help both providers and patients resolve financial obligations, leading to improved revenue cycle management and higher customer satisfaction.
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