Mistake #1: Failing to collect at time of service
Collecting patient balances — including copays, deductibles, and past-due charges — at the time of service reduces staff time and money spent mailing statements to patients, and it eliminates those small balances from being on your A/R reports.
It also increases the likelihood that patients will pay in a timely manner, something that’s becoming more critical as patients’ portions of their bills make up a higher percentage of total reimbursement. With the increase in patient responsibility that’s coming through, it’s becoming more and more incumbent upon practices to collect their upfront dollars as quickly as possible.
To improve time-of-service collections at your practice, follow these simple steps:
- Verify and note. Make sure staff compiles the patient’s portion of payment information, especially the copay and/or past-due balance amount, during the benefit verification process prior to appointments. Staff should note this information somewhere that is easily accessible, such as your practice management system, so when patients present for appointments, staff can quickly identify any payments that are due.
- Ask appropriately. Instruct staff to avoid phrasing mistakes that can lead to failure to collect at time of service. Rather than asking patients, “Would you like to make your payment today?” staff should ask, “How would you like to pay your balance?”.
- Provide resources.Train staff to ensure they know how to determine the patient’s deductible and coinsurance.
- Proceed with caution. Make sure your staff is not making unnecessary promises to patients when collecting. The worst thing they can say is, “This is all you will have to pay”. The patient will hold you to it and you will end up writing off collectible balances.
Mistake #2: Failing to set expectations
Don’t underestimate the importance of relaying payment expectations to patients as frequently and as far in advance of appointments as possible. Establishing that expectation, as basic as that sounds, has proven to be very effective in terms of increasing time-of-service collections.
To establish patient payment expectations effectively, your practice should have a written financial policy that a patient signs when they register / schedule appointments. In addition, staff should be as specific as possible with patients regarding their portion of the bill.
Relaying specific payment information is especially critical if staff finds that a patient will incur an unexpectedly high balance for the service requested. It’s important to let people know what their benefits will and will not cover. If patients are aware of the high cost of a procedure, but elect to proceed, it’s more likely they will pay promptly when presented with their statement.
Staff should also notify patients of their expectations regarding any past-due balances when scheduling appointments and issuing reminders. Staff should be saying … I noticed you have an outstanding balance, can I get a credit card or a payment from you today while I have you on the phone? Take the proactive approach of trying to address the past-due balance before the patient gets to your practice.
Mistake #3: Failing to address denials
Don’t ignore denied claims or fail to address them appropriately and in a timely manner. While a few denials here and there may seem insignificant, those dollars and cents can add up to significant amounts of missed revenue over time. If your practice has limited resources to devote to reevaluating and resubmitting denied claims, at the very least it should prioritize those with the highest potential monetary value. We recommend our clients establish a monetary threshold at which denied claims will be corrected and resubmitted, and at which they will be written off. Nobody wants to write off charges, but your staff needs to focus on the higher dollar amount claims and work down from there.
Short of taking a more proactive approach, the best way to address claim denials is to reduce the number your practice receives in the first place. Here are a few tips:
- Verify benefits and confirm insurance.This should be a no-brainer, but make sure your staff is doing all it can to verify benefits prior to appointments. In addition, staff should confirm that a patient’s insurance information on file is up to date when established patients schedule new appointments.
- Ask questions. Speak to a payer representative directly if questions arise during the benefit-verification process. Document the representative’s name, the date and time of the call, and the rep’s answer. That way you have recourse if you were provided incorrect information that leads to a denied claim.
- Don’t miss the obvious.Avoid small errors that trigger denials, such as the misspelling of a patient’s last name, by asking direct rather than open-ended questions when gathering patient information. For example, ask “What is your address?” rather than, “Is all your information up to date?”
- Don’t forget important questions.Watch out for coverage limits that result in denials.
- Don’t be lazy. Monitor claims denials. This will help you identify claims-related mistakes to avoid in the future. It will also highlight payer policy changes you may be unaware of. Once you find that out you can change your processes.
Mistake #4: Getting complacent
Don’t be satisfied with the status quo. Instead, institute performance goals / benchmarks for your staff. Establish productivity standards, such as the number of claims that should be worked each day; and quality measures, such as a monthly collections goal. Without having a benchmark, staff get complacent.
One great collections performance measure is average days in accounts receivable. Financially healthy practices operate with the fastest claims turnaround. Set goals for your average days in accounts receivable depending on your payer mix and typical claims turnaround speed. For instance, set the goal of having a percentage of total claims (perhaps 75 percent) completed within 30 days; a smaller percentage of claims (perhaps 10 to 15 percent) completed in 15 days; and so on.
Regardless of the goals you set for your practice, it’s critical to ask staff for input when defining them. If you have them help you set that goal and they believe it is reasonable, they’re more likely to reach that goal. In addition, if your practice institutes standards and goals, it’s only fair to provide staff with adequate training and resources to meet them.
Mistake #5: Missed opportunities
Don’t overlook tools that can make your job easier. A variety of technologies are available that streamline collections processes and improve efficiencies. Though these new tech tools cost money upfront, the long-term payoff is huge.
Here are some other collections-related technology tools that experts say practices should consider:
- E-eligibility software.Instead of using staff to verify insurance coverage and benefits, use technology. Electronic-eligibility software electronically checks and updates patient coverage information.
- Collections module. Most practice management systems allow users to create customized patient and payer collection work lists. This enables staff to make smarter decisions regarding what accounts to focus on and when.
- Monitoring tools. Use technology to monitor collections and identify recurring problems. Software can measure performance indicators, including most common denial codes and denial rates by procedure.
- Patient portals.If you haven’t already done so, consider implementing a patient portal that enables online bill pay. The easier it is for patients to pay, the more likely it is they will pay. Society as a whole has embraced online bill payment for just about everything and your medical practice should be no different.
Payment Plan Policies
Patient payment plans are a great way to ensure patients who are struggling financially can pay for services. Follow these three rules to implement a successful payment plan at your practice:
- Set limits.Work with patients, but not at the expense of your financial well-being. Payment plans must be in writing and should last no longer than six months, especially if you aren’t charging interest.
- Allow exceptions.In cases of true financial need and when deemed appropriate by the office manager or physician, make special allowances. Consider extending payment plans or offering a longer duration to pay.
- Follow up. Be prepared if patients fail to comply with the plan. Diligent follow-up on payment plans, a clear understanding of what your next steps will be: if payment is received; if partial payment is received; or if no payment is received. These are all situations that if processes are in place, will ensure that you are doing better from a collections perspective.
As reimbursement declines and overhead increases, it’s critical for practices to ensure they collect as much of their hard-earned cash as possible. Here are some tips:
- Improve efficiencies by collecting patient payments, including copays, deductibles, and past due balances, at time of service;
- Ensure patients are prepared to pay by providing at registration a written practice Financial Policy that outlines your payment expectations … including when, how, and how much they will be charged;
- Improve payer collections by monitoring denials and quickly resubmitting denied claims;
- Improve A/R collection performance by instituting benchmarks and goals for your staff; and
- Streamline collections and improve efficiencies by using available technology.
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