collect the most of your patient dollars with us…your profit depends on it! 1 communication for...

Collect the most of your patient dollars with us…your profit depends on it! 1

Communication for Compensation-Best Practices for Collecting

Co-Pays, Deductibles

Presented by: Dave Bargmann, Senior Consultant

[email protected]


Background•12 year HME industry background, includes owning HCS (Homecare Collection Service), which was acquired by Invacare in 2008•Billing & collections executive with experience delivering services to the largest HME providers•Clients include companies with revenue that range from $1M to $500M

– Understand the challenges small and large businesses face•Change advocate

– Underlying philosophy is if you are not proactively changing to address business climate you will be left behind


Past, Present, Future

•Where has patient follow-up been?

•Where is it today?

•Where is it going?


Past

•Patient portion was athrowaway

•Manual labor needed to send

statements


Present• Sending monthly

statements is common

• Many companies canmore easily send

them for you• More patient

responsibility• Insurance releasing

less $• But two real problems

still exist:– Wrong methodology

– Growing patient confusion


Legislative Actions with Impacting Revenues

Round 1 & 2

Medicare

Competitive

Bidding

Round 1 & 2

Medicare

Competitive

Bidding

The Affordable Care Act

The Affordable Care Act


Medicare Competitive Bid•Reduction in reimbursement rates for products included in competitive bid•Winners

– Must change their operating models to drive down service-delivery costs

– Must collect every dollar of the new allowable•Non-winners

– Be aware that commercial payers and Medicaid programs will be following suit

– Must also begin the change process


Affordable Care Act•Mandatory Coverage

– Many small business will opt-out of providing health insurance coverage as a benefit

– Cheaper to pay the penalty•Health Insurance Exchanges

– Employees will be forced to purchase insurance through state/federal exchanges

– Plans will carry high deductibles and larger out-of-pocket expenses

•Millions of uninsured people will begin to access the healthcare system


Consumer Driven Health PlansThe ACA will have a substantial impact on the dollars the insured member will be responsible for

paying for healthcare encounters

Increasing Insured Population

Patie

nt O

ut-o

f-Poc

ket $


The Problem: High Deductibles & Co-PaysDe

duct

ible

s &

Co-P

ays

Historically Insured Newly Insured


– 5 year Annual Deductible Trend

• In-network deductibles increased by 80% - $550 increase

• Out-of-network deductibles increased by 110% - $1100 increase

– 2012 – 12% of Employers offered ONLY high deductible health plans (>$1000 deductible)

– 2013 - 17% of Employers offered ONLY high deductible health plans (31% increase)

– 2014 - 44% of Employers are considering high deductible health plans as the ONLY benefit option

Source: 2013 PwC Health & Well Being Survey

Deductible Trends


• Revenue dollars that will be “rolled” to the patient are increasing every year and will continue to increase

• Patient pay collections directly impacts your bottom line

• Your organization’s ability to collect those dollars may mean the difference between thriving or just surviving

Impact of Patient Pay


Traditional Patient Pay Collection•Very few dollars collected at delivery•Monthly statement after insurance has paid•In-house staff making collection calls•Typical collection rate is well < 50%•At some point in time, the uncollected A/R is written off to bad debt•Balances may or may not be sent to an outside collection agency•Cost of collections is EXPENSIVE•LONG wait for cash


Problem: Using Only One Traditional Method•21st Century billing will produce less results if you rely on just sending statements•ANYTHING can happen!


Solutions

•Assess & measure your current situation

•Establish a new culture

•Pay for performance

•Outsource the activity


Some Questions to Ask•What is your Cash Opportunity at Delivery (COD) Policy?•What is your Cash Opportunity at Delivery?•Does your company have a “Collections Culture”?•What is your patient pay collection rate?•How much of your patient pay A/R >120 days?•What is your bad debt as a % of net revenue?•How much of your bad debt is patient pay?•Does ALL of your staff know how to “Ask for THEIR Money”?


The Change from the Beginning•Capture more demographic information from the patient AND the responsible party

– Home phone numbers, mobile phone and e-mail addresses

•Use the information available on insurance verifications– Deductibles, plan %, out-of-pocket remaining

•Train your staff to have financial discussions to educate the consumer•Calculate and COLLECT whatever you can at the first encounter

Change Behavior of the Staff and Patient


Changing Your Behavior•Every employee MUST understand the importance of patient collections•Every employee MUST be trained to understand deductibles, co-insurances and out-of-pocket•Every employee MUST be comfortable with collections becoming a part of their job descriptions

– How many employees have contact with a patient in the delivery process, or through on-going contact?

– How many opportunities to collect balances are lost?

– Coach your salespeople to stop telling patients they will owe nothing!


Reward System

•Capture your potential Cash on Delivery

•Set collection goals for the staff– Start slow so it is attainable

•Measure the % of collections

•Celebrate and reward the success!

•Raise the bar every month or quarter based on initial results

•+90% collection rate can be achieved!


Billing Policies•Review your insurance billing practices.•The faster you can bill the initial claim, the faster you can bill the patient balance.•Are you billing the patient payment with the primary bill whenever possible?•The closer to the service encounter an invoice/statement is received, the more likely the patient will recognize it as an obligation.


Outsourcing Patient A/R

There are several compelling reasons for outsourcing this responsibility•Reduction of employee expenses•Increased automation and increased patient contact•Improved cash flow through lower Days Sales Outstanding (DSO)•Lower bad debt/Higher earnings•They are better at it…


Outsourcing Rationale•The typical HME company has limited resources dedicated to private pay collections after billing•If a single person - the activity usually stops when they are absent•If spread across collections staff - the level of effort, competency and results varies•Collectors would rather focus on the higher dollar insurance claims•Your company should focus resources on higher $ claims for a better return on expense


Outsourcing Partner SelectionHow do you choose the right partner?•Look for an industry leader – an innovator•Is there a defined process with multiple levels of activity?•Does the collection process allow a variety of contact modalities?

– Print

– Telephonic – both automated and personal

– Text

– E-mail

•Do they offer an easy way for the patient to pay?


Outsourcing Partner Selection•Do they understand the importance of frequency of contact by a variety of methods?

– Limiting the number and manner of contacts allows the debt to become stale and less collectable.

•Do they have the ability to automate the transfer of invoices, payments and adjustments?•What is their track record of performance?

– Do they offer tools that track resolution and collection performance?


Outsourcing Partner Selection

•What other business solutions can your partner offer?

– Consulting– Compliance calls– A/R portfolio analysis– Facilitate the purchase of A/R– Strategic business partners


Outsourcing Outcome

•Your outsourcing partner’s product should prompt the patient to:

– Pay the bill, or– Pick up the phone to call to resolve the debt

•The number one obstacle to success is the perception that patients calling is a bad thing

– Can your outsourcing partner handle these calls?


Maximizing Cash Recovery•Part of the outsourcing process should include addressing your existing patient A/R portfolio•Traditional approach has been to send it off to a collection agency and wait to see what happens

– Rarely see much pay back on this– Collection rates are usually in the single digits and you pay a

premium

•Approach is antiquated and returns little value•Selling A/R to these same collection companies returns pennies on the dollar.


Where Does This Leave Us?•Patient A/R will continue to increase over the coming years•Patient A/R is the single largest opportunity to reduce bad debt and return those dollars to the bottom line•The three most important components of the change process is

– Changing your staff’s behavior

– Changing the patient’s behavior and last, but not least

– Choosing the right outsourcing partner

•Outsourcing will help you reduce expenses, improve bad debt and return dollars to the bottom line


Reality of Healthcare

Time

Reimbursements

Services


Cash Collections Checklist•Answer these questions

– What is your patient pay collection rate?

– How many dollars do you lose from deductible/co-pay waivers?

– Will you start the process by analyzing the potential cash you could be collecting and what it costs you to collect today?

•Consider these actions– Establish a collection culture

– Ask for the cash

– Get bills to the patient sooner

– Automate, automate, AUTOMATE!

– Use outside services to reinforce collection culture


Summary•What you chooseto do (and what you choose not todo) with your private pay A/R has the greatest potential impact on your bottom line.

•What will you do?


Communication for Compensation-Best Practices for Collecting

Co-Pays, DeductiblesPresented by:

Dave Bargmann, Senior [email protected]

Q & A – Next Steps

collect the most of your patient dollars with us…your profit depends on it! 1 communication for...

Documents

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usyour profit

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insured population patient

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