More than a third of all hospital revenue comes directly from patients. Yet $7.5 billion in patient payments goes uncollected each year. And this was before COVID-19. Now consider how many of your patients have lost jobs due to the pandemic or have incurred medical bills from being treated for the virus or other health challenges. Collecting from self-pay patients is about to get a lot more challenging. Are you prepared?
To find out, ask yourselves these questions:
What are your current net cash recovery and bad-debt placement percentages? Low cash recovery and high bad-debt placement percentages can signal an issue within your patient access process. You may be turning accounts that are actually able to pay over to collections too soon, causing you to miss out on much needed revenue.
What portion of accounts sent to bad-debt were actually eligible for other coverage? Many hospitals just assume that the coverage information provided by the patient is accurate and complete. But that’s often not the case. If you’re not including additional coverage discovery as part of the self-pay collection process, you could be leaving money on the table.
Are your billing and collection processes achieving optimal results? This is an especially important question to ask at this time. Does your team have the expertise needed to know when to bill the insurance company, when to push the claim through the CARES Act process, or when to bill the patient? Every payer has its own COVID-19 coverage policies and documentation requirements. Understanding who is covered when and by whom is essential to knowing what portion of a patient’s bill is actually self-pay.
Are your payment options making it more difficult for patients to pay? Offering self-pay patients a one-size-fits-all payment plan can lead to increased bad-debt write-offs. For example, a 2017 poll by Black Book found that 95% of consumers would like the opportunity to pay their healthcare bills online, yet only 20% of providers are equipped for electronic payments on phones or mobile devices. Understanding each patient’s payment preferences and their unique financial situation—especially during the COVID-19 pandemic—enables you to offer payment options that will actually make it easier for patients to pay, before having to turn them over to bad-debt collections.
Do you track hold-times, dropped calls, and customer service issues? It’s a fact that the patient experience has an impact on your bottom line and your brand reputation. Whether you manage your self-pay collections in house or through a vendor, it is important to track the quality of every patient engagement. Failing to do so will show up in negatively trending NPS numbers.
Are you achieving maximum ROI on your self-pay collections vendor? It may come as a surprise to learn that nearly half of all early-out, self-pay accounts are not compliant with best practices, SLAs, or government regulations. And 36% of accounts placed with a vendor at 31 – 60 days are never worked. Underperforming collection vendors put even greater downward pressure on your bottom line in a time when you need every dollar you’re owed.
Where to turn
The first step in achieving optimal self-pay collections is to perform an in-depth analysis using data mining and scoring methodologies that cross all revenue cycle processes. Few hospitals have the expertise to perform such an analysis but there are resources that can do the hard work for you. Revenue cycle experts like HBCS can perform a comprehensive self-pay analysis that identifies not only problem areas, but also opportunities for improvement that can be quickly implemented.
The time to act is now
It is estimated that the American healthcare system will have lost on average $50.7 billion per month between March 1, 2020 and June 30, 2020 due to the COVID-19 pandemic. As many experts predict the virus could be with us for months or even years to come, providers need to act now to protect their bottom line. But making positive changes requires understanding where you are today. Performing a self-pay improvement analysis is the perfect place to begin.