How To Collect Outstanding Receivables Faster – Even When the Payer Is the Patient

For years, emergency medicine providers have watched the number of patients who are self-pay or on high-deductible health plans (HDHP) grow. Now, with the end of the public health emergency (PHE) on the horizon and the subsequent shrinking of COVID-era Medicaid coverage, providers anticipate that trend will continue. 

Healthcare expenses add significantly to basic financial struggles for many families. The patient share of healthcare financial responsibility is increasing, even for those with private coverage. Since 2012, the average annual deductible for workers who are enrolled in healthcare insurance through their employer has ballooned by a whopping 61%. 

Self-pay and HDHP patients take longer to pay and have a higher risk of write-off. This adds to the already significant financial strain on emergency medicine providers. Prolonged, high days sales outstanding (DSO) — the average number of days to collect on a claim — stalls the cash conversion cycle and contributes to already low profit margins plaguing most emergency medicine providers. 

Emergency Medicine DSO Challenges  

Compounding the self-pay collection challenges, situations that are common in emergency medicine also cause downstream financial woes, including high DSO. These include: 

  • Inability to communicate. Some patients arrive at the emergency department unconscious or otherwise unable to communicate their demographic or insurance information.  
  • Missing or incorrect patient data. Many patients arrive at emergency department without their identification or insurance information. When patients do bring information, it is incomplete or outdated in a surprisingly high number of instances. 
  • Lack of knowledge regarding insurance eligibility. Some patients may declare as self-pay when, in fact, they may have or be eligible for healthcare insurance programs. Conversely, some patients who enrolled in Medicaid during the PHE may discover that they’ve lost coverage during the redetermination process. 
  • State of urgency. With the hustle of emergency departments, staff may omit asking for complete patient and coverage information. 

All of these situations complicate the patient intake process, make it more difficult to submit a clean claim, and prolong the time to collect outstanding accounts receivable. To simplify the process, emergency medicine providers should focus on verifying the patient’s identity and obtaining basic information (full name, date of birth, address, social security number, and MBI number if applicable). This basic information can then be enhanced by leveraging the right automated healthcare data technology. 

Reducing DSO With Automated Healthcare Data Tools 

One of the most effective solutions for combatting the lack of reliable patient demographic and insurance information is an automated AR optimization tool suite that can find, correct, and verify patient and payer information. Compared to relying solely on the patient for complete, accurate information, providers can improve their clean claims rate and reduce DSO by leveraging real-time technology, such as: 

  • Demographic verification — can help enhance core data for more than 60% of patient encounters.
  • Insurance discovery — solves “coverage not found” errors and can identify active primary, secondary, and tertiary coverage — including retroactive Medicaid.
  • Insurance verification — confirms eligibility and benefits, and assesses coverage, co-pays, deductibles, secondary coverage, and codes.
  • Deductible monitoring — monitors when the patient deductible has been met and shifts primary financial responsibility to payers.
  • Self-pay analysis — estimates patient’s propensity to pay and unique financial characteristics to determine financial responsibility and facilitate partnering with them to improve collections and maximize revenue.

A best-in-class, real-time healthcare data solution like ZOLL® AR Boost® brings these automated capabilities together to help ensure data quality that reduces denials, increases revenue, and reduces DSO. Moreover, by estimating patient responsibility accurately at the point of care and in compliance with the No Surprises Act, providers can collect expected balances up front. 

Prioritizing Investments to Reduce DSO 

At a time when many hospitals are reluctant to make new technology investments, there’s a strong case for the right AR optimization tools. An analysis of customer data by ZOLL Data Systems has found that implementing automated insurance discovery, demographic verification, and deductible monitoring can improve average reimbursement for an emergency department by 29%. 

If, however, it is financially impractical to add all of these capabilities at once, the first investment must be in a robust insurance discovery tool that provides a confidence score. Emergency medicine departments get a clear return on investment (ROI) by finding more active, billable coverage — including coverage for previously presumed self-pay patients. Whether private or public, the likelihood of reimbursement from a payer far outweighs that of the average self-pay patient. 

The earlier the eligibility data is captured by the insurance discovery tool, the greater impact it will have on reducing DSO. However, capturing that data after patient discharge is still worthwhile because providers can update and resubmit claims within the timely filing period. The bottom line is that using technology to better understand a patient’s eligibility and financial characteristics leads to better clinical outcomes, patient experiences, and financial performance.

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