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patient financial responsibility 1

Q&A with Jho Outlaw and Jessica Nelson

Following a recent webinar presentation on "Patient Collections: How to Improve Success Without Hurting Satisfaction," Jho Outlaw, senior vice president of Revenue Cycle Services for SIS, and Jessica Nelson, director of Revenue Cycle Services for SIS, were asked numerous questions by participants.

This first part in a two-part series shares about half of those questions, along with Outlaw's and Nelson's responses, summarized for readability. The remaining questions and responses will be provided in part two of the series.

Q: What do you suggest as "recommended practice" for payment plans?

A: If you're going to accept payment plans, we advise they last no longer than six months and prefer no more than three months. We recommend 50% collection at the time of service, 25% a month later, and the final 25% a month after that. There's no reason to draw out to payment right until the 90-day mark.

One approach that can help avoid a payment plan is offering a prompt-pay discount at the time of service. Let's say you spoke with a patient in advance who wanted to set up a payment plan. You may want to tempt the patient to pay everything upfront by offering 10% off the bill. So rather than owe $1,000 that would be paid over three months, the patient would pay everything on the day of service, minus 10%. Your ASC would collect $900 and write the difference off.

You will have to secure approval from your governing board to make such an offering. A cost-benefit analysis would likely show that collecting all the money at the time of service — even at a discount — improves your chance of keeping more of the payment when factoring in the cost of carrying a balance and managing the account.

If you do agree to a payment plan, set up auto-draft from a patient's checking account or auto-payment to a credit card.

Q: Do you have any problems with bad checks written by patients? This is a growing concern for our ASC.

A: Bad checks are definitely a growing problem, which is likely attributable, in part, to the expectation that patients will pay more for their care than they needed to in the past. We emphasize securing payments via debit and credit cards, but some patients will not have those options, so accepting checks may be the only viable option.

We pride ourselves on refunding money quickly when patients overpay. It's important for the reputation of the ASC that patients know they will receive refunds in a prompt manner. However, if you are going to accept checks, it is important that you do not write refunds until the check clears the bank. We had a recent experience where we had written up a refund for a patient but held off on processing it. Then the patient's check bounced. That little extra patience paid off.

Q: At what point can or should an account be sent to collections?

A: Hopefully you have a statement cycle system in place. Those are typically set up for every 21 days (three weeks) or 30 days (one month). If those reminders fail to secure outstanding payment, get that balance over to a collection agency within 90 days from when the self-pay balance was transferred to the patient. 

There is no law or rule of when you should send something to bad debt. It should be a center-based decision. Make sure your physicians are on board and be consistent in how you treat your accounts.

Q: One of our largest referring physicians doesn't want us to collect payments upfront. He's not a partner. What do you suggest we do to convince him otherwise?

A: If you're collecting from patients for all of your other physicians but not this one because he's put his foot down, I would compare what bad debt is specifically attributable to his patients compared to your other physicians. If you're not doing any point-of-service cash collections, you're likely losing money and will have more going to bad debt associated with his patients than with other physicians.

I would get the data together, prove the problem with numbers, and give that information to one of the partner physicians to have a conversation with him about the critical importance of upfront collections.

Q: What do you do when the patient says, "I didn't know the amount collected was based on an estimate…" and yet you know you told the patient this information because you tell it to every patient?

A: That's been a common conversation for years and reflects one of the main reasons why it's difficult to collect in an ASC. Estimates aren't exact and patients usually want an exact figure of how much their surgery will cost. The best practice is to have your documentation stating that the figure provided to patients is an estimate and have patients review and sign this documentation. For conversations over the phone, make sure the script staff use to discuss patient financial responsibility emphasizes that the number quoted is an estimate. Staff should document when they reviewed the information in the script with patients.

New technology can also help. We will soon be using a texting application to drive point-of-service cash collections. It will have the word "estimate" in big, bold letters.

The key takeaway: You need to stick to your guns. You know you said estimate and you know the patient should have heard it. You need to reiterate, "We can only estimate. That's all we can do."

Q: How do you handle a patient who is scheduled for a procedure but was previously sent to collections?

A: Different ASCs have different policies, but recommended practice is to collect their current coinsurance and deductible before proceeding with the procedure. You need a system to identify these people. Your software should tell you when an account was previously sent to collections — via pop-up or another type of notification — so you can raise the point during financial conversations with patients.

Postponing a procedure must be an option. When patients say they cannot cover their portion, say, "We can look at postponing your surgery until you can get the funding together. We need to collect at least half of it prior to your surgery being rendered." Have such a message ready and stick to it. Otherwise, you risk a repeat, problematic experience.

Q: What do you recommend the minimum payment amount should be for a payment plan?

A: It varies among our clients because of differences in patient demographics, payor mix, service mix, etc. We have very few clients accepting less than $50 a month and/or letting plans go out further than six months. One thing to be very conscientious about is consistently applying your payment plan practice to all patients.

Read Part 2 of "Improving ASC Patient Collections and Satisfaction".

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