Increase upfront collections: It's more important now than ever

But patient balances will get even larger

In today's down economy, increasing upfront collections is even more important for patient access departments, but it's getting harder as many patients are struggling to make ends meet, at the same time that their copays, deductibles, and co-insurances are becoming more expensive.

"Each day, we touch on collections. It seems to have gotten harder in the last three months or so," says Antionette Anderson, CHAA, CHAM, director of patient access and centralized scheduling at Skaggs Community Health Center in Branson, MO.

Recently, patient access managers at St. Joseph Medical Center in Towson, MD, did an analysis of its self-pay patients and were very surprised at what they learned.

"We were shocked to see that most of our self-pay isn't comprised of straight self-pay patients, but self-pay after insurance," says Cathy Foster, the hospital's director of revenue cycle. "It seems like that is growing."

The hospital took its current accounts receivable and broke it down into what was straight self-pay and what was self-pay after insurance. "When we got our results, we had more in our 'self-pay only' bucket than our 'self-pay after insurance' bucket," she says.

When Foster spoke recently at a conference held by the local chapter of the Healthcare Financial Management Association to an audience of mostly hospital CFOs, she shared this information: "I think it was a little bit shocking to them to see that more of our bad debt is coming from balances after insurance than from people coming in uninsured," she says. "I wanted to make them aware of the reality of what the patient accounting and access staff are dealing with."

With more layoffs expected, the number of uninsured is likely to grow, which Foster says will have a "domino effect. It's going to get harder before it gets easier, that is for sure."

A year ago, straight self-pay accounted for 55% of the hospital's outstanding accounts receivable, with 45% coming from self-pay after insurance. "Now, it's the other way around, and continuing to grow in that direction," says Foster. "Many of the payers we have talked to said that after Jan. 1, most of their copays and deductibles will be on the rise. So we are trying to prepare for that."

Tell patients what they'll owe

Three financial counselors were added to Skaggs Community Health Center's patient access department — for the ED, inpatient, and outpatient areas — along with two benefit and preregistration clerks. Each scheduled procedure is worked up for cost and benefits, to determine how much the patient will owe.

"We then call the patient to preregister and let them know what their out-of-pocket expense will be," says Anderson. "We ask for payment over the phone prior to the patient coming in so they will not have to worry about that on the day of service. If they feel uncomfortable with that, we let them know that it is OK for them to pay when they arrive."

An authorization, face sheet, and cost sheet are attached to the order. When the patient arrives, the registrar collects the money and gets the authorization signature.

"Patients want to know prior to coming in how much their out-of-pocket expense is. And they have a right to know," says Anderson.

Although staff have heard lots of positive comments from patients, there also have been some negative ones, such as "We never had to do this before."

"We provide the staff with scripting for these objections," says Anderson. "The results have been great. We went from collecting $350,000 from one year to $860,000 the next."

Anderson cautions that you should not start collections until you have trained your staff to understand everything there is to know about copayments, deductibles, and contracts. "It is imperative they have this knowledge, so they know what they are talking about when they talk to the patients about this," she says.

She recommends doing role-playing, using key words and providing basic insurance training sessions with all your staff.

Patient access staff at St. Joseph Medical Center were not accustomed to asking the patient for money. Previously, a separate individual handled preregistration, registration, and verification of benefits. "Now those lines are being diluted. We are becoming a preregistration service," says Foster. "The plan is to have the staff go through formal training provided by our self-pay vendor."

Here are four strategies to increase cash collections:

1. Pre-register patients.

At St. Joseph Medical Center, all patient access staff are being trained to preregister patients. Scripts will be used to help patients with copays, looking up benefits, and determining eligibility. We needed to focus on seeing how we can get this money right there at the front end," says Foster. "We are trying to make it as easy for the patient as possible."

ID patients in need before the bill is sent

Patients with insurance often are surprised that they still owe a large balance, says Cathy Foster, director of the revenue cycle at St. Joseph Medical Center in Towson, MD.

"We just want to make sure that our patients, whether they are eligible for financial assistance or not, are given every opportunity for us to assist them with paying their hospital bills," she says. "We want to do everything possible to help them out."

Maryland is different from all other states in the way it is reimbursed, because patients cannot be offered a discount. "The only discounts we can allow is 2% if you pay the day of service, and 1% if you pay within 30 days," Foster says. "So the fact that we can't incentivize patients to pay their copays is a little bit of a challenge."

The hospital is doing whatever it can, however, to set up payments for patients or offer them financial assistance if needed. "We want to get the money, but we also want to make it convenient for the patients. We don't want to deter our patients from getting health care because they can't afford it, especially in this economy," Foster says.

Patients may be unprepared

Anna Dapelo-Garcia, director of patient admitting services at Stanford (CA) Hospital & Clinics, says that its patient access department is sensitive to the impact of today's challenging economy on patients and their families.

"Thus, part of providing an excellent patient experience is engaging patients early on about their financial liabilities and managing expectations," she says. "We take great pride in providing options and have dedicated staff to assist staff such as our financial counselors and patient advocacy staff."

At St. Joseph, patients are now informed about options for financial help during the preregistration call. Since half of the hospital's admissions come from the emergency department, these patients are completely unprepared and usually don't know what their inpatient benefits are until they are told. Even scheduled patients may be unaware of their specific benefits for inpatient care, and many rely on the hospital to tell them this information, says Foster.

"We try to give them the opportunity at that point to fill out the financial assistance applications if needed, before they even get a bill," Foster says.

The hospital also is looking at software that will categorize those patients who will never be able to pay, those who can pay, and those who will require financial assistance.

The hospital has a program that automatically gives charity to patients who are homeless or enrolled in any state assistance program, such as pharmacy assistance. "They may not be eligible for our state medical assistance, because you have to be disabled for 12 months or have children. So we have to do what we can while they are still in-house," says Foster.

Only walk-in patients who have never been to the hospital before will need to sit down and register. All other patients will be asked to verify six key data elements when they come in, and within the next year, this process will be done electronically.

Foster says her department has set a goal to preregister 100% of its scheduled patients. "This helps with collections, because it allows us to prepare the patient for their payment or make payment arrangements. We don't want to hold the patient up when they come through our doors," says Foster. "With preregistration, on the day they come in it's very brief. We will also use an electronic signature so that the consent forms aren't lost in 50 different places."

Anna Dapelo-Garcia, director of patient admitting services at Stanford (CA) Hospital & Clinics, says the hospital recently implemented a pre-registration unit, with staff contacting patients prior to hospital services to obtain complete and accurate demographic and insurance data. "In addition, the staff are able to collect a co-insurance or deductible payment during the phone call with the patient," she says.

This new process has improved cash turnaround for the admissions process, says Dapelo-Garcia, and has made for a more seamless patient experience at the time of service. "We were not collecting any payment during the pre-registration call to the patient," she says. "Using a third-party vendor solution to process credit card transactions, we are now able to collect credit card payments over the phone prior to service."

Discussions regarding financial liability begin with the pre-registration phone call. If a patient is unable to pay the expected amount, he or she is referred to a financial counselor for assistance.

2. Allow patients to pay balances at kiosks.

St. Joseph will implement kiosk registration in spring 2009. "The way we're setting it up is that the patient will be able to swipe their credit card, and the kiosk will tell them what their copay is, based on the benefits that we have already taken care of," says Foster. "We are only going to allow patients who have preregistered to use the kiosk."

Patients can take care of their copay and also their previous balance right on the spot. Foster says that St. Joseph will be the first hospital in the state to use kiosk registration, but that she has gone on site visits and seen it operational in a number of places. "A lot of people are like, 'kiosk? With your Medicare population?' But from the patient's point of view, if they can go to the kiosk and be done in three minutes, many will be all for it. And all patients will be offered assistance. We do not want to take away our personal touch with each patient."

3. Allow patients to pay bills online.

St. Joseph just implemented online bill pay two months ago, but already collections have gone from $10,000 the first month to $50,000 the second month. "And we really haven't done a lot of marketing with that yet. So that is a big improvement," says Foster.

Online bill pay has made a big difference in collections. "It has really contributed to our success," says Foster. "While we are on the preregistration call, if the patient isn't ready to pay the copay then, we give them the amount." Patients can then go online to pay before they come in.

4. Use a price transparency product to give estimates.

St. Joseph Medical Center uses FHS Corp.'s internet solution (www.fhscorp.net) to give an accurate quote for the patient's out-of-pocket costs. "This allows us to do estimates very quickly," Foster says. It takes about a minute for staff to input the necessary information, including the patient's insurance benefits. Based on CPT and ICD-9 codes for procedures and the patient's diagnosis, a letter is printed out with an estimate for what the entire cost will be, and what the patient's portion will be.

Foster notes that Maryland is unique because it is an all-payer state, and hospitals are paid on their charges, not on the DRGs. The hospital worked with the vendor to address this. "They took our hospital historical data, and that's what we base our pricing on. Our rates can change from one day to another, but it's a best-guess estimate," says Foster. "We are piloting that in maternity and it's coming out very accurate. We are very impressed with it."