Over the past year, healthcare organizations have experienced financial difficulties. In response, many leaders turning their attention to cleaning up revenue cycle management processes. This work has highlighted the need for patient collection processes that deliver safety, convenience, transparency and accuracy.
During a May webinar hosted by Becker's Hospital Review and sponsored by HealthPay24, two experts discussed the importance of modernizing patient financial engagement to improve revenue cycle management:
- Fred Sheffield, chief revenue officer, HealthPay24
- Reid Storch, chief revenue officer, Viewgol
Five insights from the presentation:
- Healthcare providers need to think differently about patient engagement. In the past, the lion's share of practice revenue came from payers. Now, an increasing amount of revenue is tied to direct payments from patients, and providers must adapt to this change. "There are no adjudication processes when it comes to collecting from patients," Mr. Sheffield said. "You need to think differently about how you engage with them and build trust." said Mr. Sheffield.
- Before implementing new patient engagement strategies, healthcare organizations must first understand their current state. Mr. Storch recommends that providers update their fee schedules and charge masters once a year. It's also critical to track key performance indicators. "Compute your net collection ratio as a starting point to establish your current state," Mr. Storch said. "If you're below 90 percent and can move the needle to more than 95 percent, that will have a material impact on your organization." Other important metrics include denial rates, adjudication of encounters and patient collection rates.
- To modernize the patient collections experience, providers must clean up their revenue cycle management billing databases and develop analytics. For example, credits must be applied properly to transactions. "Typically, you want credits to be less than 2 percent of accounts receivable," Mr. Storch said. "We still run into groups that aren't routinely refunding patients or payers, both of which could be illegal." Look at items in the patient ledger that could trigger inappropriate refunds, such as double adjustments. It's also a good idea to create leading performance indicators. Time-of-service collection goals include 100 percent of copays, greater than 80 percent of outstanding balances, greater than 75 percent for all other time-of-service payments and error rates below 2 percent.
- A financial engagement strategy requires strong internal processes, technology and patient communication. To build trust with patients, providers must assess their existing processes. Employees need to be trained about the importance of patient engagement to the organization's financial viability. Leveraging existing technology systems is also crucial. "Rip and replace isn't an option today," Mr. Sheffield said. "We need better integrations with existing platforms to drive performance." Layering a patient communication strategy on top of revenue cycle in an efficient and consistent way leads to patient loyalty and situational fluency. "If you only engage post-service, you miss opportunities to build trust early in the process," Mr. Sheffield said. "You must engage early, present an estimate and communicate digitally."
- A digital front door is the key to driving a shopified commerce model. More and more patients expect their healthcare digital experience to be comparable their experiences with online retail. Healthcare digital front doors must be HIPAA compliant, provide a branded experience and support pre-service estimates, payment options and analytics.
To view a recording of this session, click here.