The climate in healthcare collections is rapidly changing. While providers are pressured to increase their margins amid evolving value-based care requirements, the expense of medical care is shifting from insurers to patients. According to Bloomberg, in 2017, almost half of privately insured Americans under age 65 had annual deductibles ranging from $1,300 to $6,550. Furthermore, a Kaiser Health tracking poll found that 43 percent of insured adults said they have difficulty affording their deductibles, while 29 percent have problems paying medical bills.
As out-of-pocket costs and patient liabilities rise, medical practices struggle to get paid for their services: It’s far more difficult to collect from patients than payers. Therefore, it is important for providers to adjust their workflows to collect at the time of service and enable easier, more immediate payment processes for patients. If weeks and months pass without payment, providers lose money due to rising administrative costs.
Other proactive strategies can help providers with complex claims, unpaid bills, and practice profitability. A practice can reinvent its billing approach with improved patient and payer communication, enhanced engagement, and a precedency for system integration.
It’s not only how much, it’s when
For a provider, the true value of a dollar received for services depends on the timing of its collection. According to The Advisory Board Company, providers may be receiving as little as 18 to 34 cents for every dollar billed to those with high-deductible health plans because of additional administrative costs.
When financial responsibility lies with the patient, practices send, on average, 3.3 statements before receiving payment for an outstanding expense, according to Becker’s Hospital CFO Report. Costs of printing and mailing are significant, as are those related to staff time. As much as 42 percent of providers say it typically takes between one and two months to collect payment from a patient, while 35 percent say it takes them even longer, says InstaMed’s 2018 report on trends in healthcare payments.
Continue reading the article in Medical Economics.
By Naveen Sarabu, Vice-President of Product Management, AdvancedMD