Thanks to High-Deductible Plans, ASCs Must View Patient as Payer
An insider breaks down potential reimbursement issues facing surgery centers
To find out what the rise in patient deductibles means for surgery centers’ bottom line, Same-Day Surgery turned to Kylie Kaczor, MSN-RN, CASC, CPCO, CMPE, vice president of clinical and regulatory affairs at National Medical Billing Services. Kaczor speaks nationally about surgery centers and reimbursement issues.
SDS: How are high-deductible health plans changing the way ASCs handle patient payments and collection practices?
Kaczor: As a result of the growth in high-deductible health plans, we now have to view the patient as a payer. The average deductible for single coverage among all workers increased 53% since 2013, in part due to the rapid increase in high-deductible health plans.1 Patient responsibility now makes up 25% of total revenue, with experts anticipating this to reach 50% over the next decade.2 Just last year, the out-of-pocket expense rose on average by 11%. Patient responsibility made up nearly 30% of income for medical practices and roughly 10-15% in the ASC arena specifically, only further supporting the patient’s role as payer in our marketplace today.3
Not only is it important for providers to pay close attention to the trends in patient responsibility, but it is equally important for them to understand that collecting patient responsibility at time of service may be the best approach to maximizing revenue and improving the overall patient experience.
This process will increase your cash flow while decreasing the administrative burden associated to back-end collection costs. In 2017, TransUnion reported that 68% of consumers were unable to pay their financial responsibility after services were provided and additionally expects the percentage of patients not paying their medical bills in full to rise to 95% by the year 2020.4 From just 2015 to 2016, alone, the number of consumers failing to pay full patient responsibility increased by 15%, a trend that is expected to continue.4
As a result, we’re seeing a growing focus on collecting patient responsibility and appropriately estimating time-of-service costs to patients. Facilities and practices are also exploring where their inefficiencies and wastes lie and are aggressively working to cut costs while maintaining quality in care.
SDS: What are time-of-service collections?
Kaczor: Time-of-service collection is the patient financial responsibility due to the provider including copayments, deductibles, and co-insurance on the day a service is provided. For self-pay patients, this is the total self-pay rate due from the patient for the procedure or service that will be performed on the day of service.
SDS: Could you please provide some best practice examples of how a surgery center can improve its collections process?
Kaczor: Does the ASC have a sound financial policy relative to collections and patient responsibility? If so, has it been provided to the patient? Or, is it publicly available?
It is recommended to provide this policy to the patient as early as possible, preferably before they arrive at your center. You can also post this policy publicly on your websites if you have them or in your waiting areas and office spaces. The earlier you set clear expectations relative to payment with patients, the better. You want to avoid surprises wherever possible.
Already this year, we’ve watched the almost continuous barrage of headlines regarding healthcare technology, the expansion of telehealth, wearable health tracking devices, and cloud-based services, among others. Technology is incorporated in all areas of healthcare, and revenue cycle is no exception. Consumers want convenient access to healthcare and a streamlined process. As a result, providers are looking for ways to implement new technologies that promise to promote accuracy and efficiency while positively impacting the patient experience.
While we know that there will always be a human component to the revenue cycle, there are areas where automation makes a big difference. To help providers collect these higher patient responsibilities, many practices are implementing automated tools that can evaluate patient benefits and eligibility and produce accurate time of service quotes. Having this information available will better prepare front office staff and set proper expectations for the consumer. This type of technology implementation helps to streamline the time-of-service collections process while ensuring that patients arrive prepared and in understanding their responsibilities.
These estimates also offer the providers and office staff the supportive and accurate information they need to discuss personal and customized financial responsibility with their patients, fostering a positive relationship between the provider and the consumer. Automation of this type can also help to reduce patient phone calls and decrease administrative burden associated to collections.
SDS: What are the top steps a surgery center can take to navigate the appeals process successfully?
Kaczor: Understand who your payers are. Is the plan self-funded or fully insured? Self-funded plans or plans where the employer is the one responsible for payment on a claim, not the insurance carrier? These plans are governed by the Employee Retirement Income Security Act.
With self-funded plans, employers are required to provide their plan participants with a summary plan description. This document will tell you exactly how claims should be paid and how you can appeal your denials. With fully insured plans, you want to be sure to review the plan documents to understand what should be covered and what benefits exist for the patient. Your appeals can include language from contracts, fee schedules, and state laws.
We’ve found that having significant supportive language to defend your stance — state laws, federal law, even reference to court rulings and judgments — helps to strengthen your appeal. If you are able to obtain a certificate of coverage or an estimation of benefits from the plan without exhausting an appeal effort, you can also use the language in that document to support your appeal.
SDS: Are there any outcomes you could note about what happens when surgery centers implement these kinds of collections process changes?
Kaczor: With any standardized process, you can expect to see improvements in collections. This standardization also helps to protect providers from unintentional discriminatory practices relative to patient collections. When business office staff is well-trained and efficient with processes, facility financial policies are applied consistently, and the number of demographic errors and others will decrease.
This supports improved time-of-service collections and efficiency in claims submission and subsequent claims adjudication.
- The Kaiser Family Foundation. Employer Health Benefits 2018 Annual Survey. Available to view online at: . Accessed Jan. 23, 2019.
- Tanner S, Ceruti A. Patient financial responsibility: How to protect your margins. Advisory Board, March 27, 2015. Available to view online at: . Accessed Jan. 23, 2019.
- Cavanaugh M. Improve Patient Collections and Stay Compliant with Payor Requirements. Billing, May 10, 2017. Available to view online at: . Accessed Jan. 23, 2019.
- TransUnion. Patients May be the New Payers, But Two in Three Do Not Pay Their Hospital Bills in Full, June 26, 2017. Available to view online at: . Accessed Jan. 23, 2019.
Interested in what the rise in patient deductibles means for surgery centers’ bottom line? Read on.
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