• Nate

#estimatesforeveryone part 1

A complete solution for increasing patient collections, decreasing bad debt and increasing patient satisfaction, with a focus on high volume services

Are you interested in reducing or eliminating healthcare bad debt? I am. The whole practice feels inhuman to me, especially in one of the most human industries. It also makes healthcare providers look like bad guys and, frankly, it often runs counter to the overall values and mission of not-for-profit, especially academic, healthcare organizations.


As a Revenue Cycle Director, I once had a VP of Revenue Cycle laugh when I told her I wanted to stop sending patients to bad debt. My argument was this: If we could increase patient revenue by collecting more at the point of service than what the collection agencies were able to collect on an annual basis, then we should just get rid of collection agencies. It doesn’t always have to be about collecting more revenue. That argument didn’t go far with that VP of Revenue Cycle. And I get it, times are tight for healthcare organizations – cost of care is going up faster than reimbursement rates – so it can be difficult for a VP of Revenue Cycle to support something that involves leaving revenue on the table.


Still, I believe that if you can increase patient satisfaction and the reputation of the organization in the community by implementing a process that replaces the revenue (even if it doesn’t provide a net revenue increase) from a process that upsets patients and hurt the organization’s reputation, then those intangible benefits are enough to leave a little revenue on the table. There are likely tangible benefits as well, such as patients returning to your organization for care that otherwise would not if you sent them to bad debt. The VP’s suggestion was to instead look at Patient Propensity to Pay solutions.


Patient Propensity to Pay scoring and the software and services that go with it offer to help healthcare organizations increase patient collections and reduce bad debt dollars. They do this by arguing that 90% of your post-service patient payments come from 50% of the patients, so focus on those 50% of patients. I’m sure it works for the two outcomes mentioned, otherwise the companies who offer the service wouldn’t be charging as much as $100,000 a month for it. At least I hope they wouldn’t.


My problem is that the process often ignores the other 50% of the patients, basically determining that they are irrelevant because they are unlikely pay. For those patients in PPtP model, no special handling or special attention is paid to the patients who are unlikely to pay. That means if and when those patients don’t pay their balance, they flow straight into bad debt and the balances are typically outsourced to collection agencies. The patient’s path is chosen by software algorithms. It doesn’t get much more inhuman than that.


Do you want to know the best way to determine a patient’s propensity to pay? Ask the patient.


If the patient indicates an inability to pay at the time of service, it creates the opportunity to initiate a conversation about payment plan or charity care options. It represents a paradigm shift for front desk interactions, which comes with a lot of work, but work that can pay off handsomely. But if you are going to ask a patient for payment at the point of service, you must know with reasonable certainty what a patient will owe for the service. Enter

#estimatesforeveryone.


#estimatesforeveryone is a philosophy that essentially means automatically creating estimates for routine, scheduled services so that expected patient balances can be collected at the time of service, or the patient can be put on the right path for paying over time or receiving charity care discounts. It focuses on all scheduled services, not just surgeries.


I’ve worked with organizations that have very generous charity care discounts, sometimes applying some level of discounts to families making 4 or 5 times the Federal Poverty Level (FPL) amount. If the patient is not aware of payment plans, available charity care discounts, or financing options that exist and does not have the means to pay all at once, it can lead to patients ignoring the statements attempting to collect on the patient amount after the service is already rendered. The statement may contain information about payment plans or charity care, but it does no good if the patient throws away the statement without opening it or opens and does not feel comfortable about reaching out for help. #estimatesforeveryone ensures that the critical conversations that need to take place happen, prior to the service being rendered.


By implementing #estimatesforeveryone, a healthcare provider will:

  1. Increase patient collections at the point of service and overall

  2. Reduce or eliminate bad debt

  3. Increase patient satisfaction

If you are using Epic billing products, you have the capability to do #estimatesforeveryone. To quote Judy from the 2019 UGM General Session, “Use what you bought.” You may need to add on around and beyond it, but at least make sure you’re getting the most out the system functionality you already have.


My reason for writing this article is mainly to challenge you to think creatively about how you could decrease bad debt, increase patient collections, while increasing patient satisfaction and the reputation of your organization in the community.


Still, I must include some explicit calls to action. So here are my calls to action:

  • Switch RCM is looking for one innovative Epic PB client to partner with that is willing to stop sending patients to bad debt, if together we can replace the revenue you collect on PB bad debt with either increases in point of service payment collections (or increasing recoveries on insurance underpayments)

  • If not having your PB contracts built (or not having accurate contracts build) in Epic is a barrier to using Epic’s estimator tool, Switch RCM can help with Contracts Perspective & Contract Builder

A bit more about Contracts Perspective & Contract Builder:

  • Contracts Perspective provides robust features like date-specific rate lookups, contract comparison, contract modeling, undercharge identification and underpayment identification with responsive visualizations and custom reporting

  • Contract Builder puts your contract terms where you really need it estimates: in Epic

  • Plus, Switch maintains the contracts for you, which for large organizations can save multiple FTEs

  • Using our Underpayment Detection System is a great first step toward implementing our contract management system because it helps you bring in more revenue on services for which you’ve already been underpaid

Part 2 of this series will explore why as a patient in the time of HDHPs, I would appreciate being asked for payment at the time of service and a case study at what actually ends up in bad debt on routine, scheduled services for a large multi-specialty physician group and why #estimatesforeveryone is a win for everyone.


If you are that innovative Epic PB client or an Epic PB client looking to build and maintain contracts in Epic without adding staff, please reach out to us at info@switchrcm.com




info@switchrcm.com

323.999.4726

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