Do You Have an Effective Deductible and Coinsurance Payment Strategy?

By Byrd Evans on May 16, 2018

“Cash flow has never been more important than it is now,” noted Medical Economics. The increase in high deductible and coinsurance health plans has placed a much greater financial burden on patients. As a result, medical practices are feeling the cash flow pinch. As of June 2017, 40% of adults in America were on high deductible plans and research shows consumers pay more than twice as slowly as commercial payers. With 25% of families in the U.S. having unpaid healthcare bills, medical practices are feeling the effects of those uncollected accounts. How can your practice manage high deductible and coinsurance payments effectively? Consider these strategies.

Accurate Data Sets Realistic Expectations

The first step to an effective deductible and coinsurance payment strategy is for your staff to have the knowledge they need to inform patients and collect. Accurate information sets realistic expectations for both the patient and provider. The world of deductibles, coinsurance and even co-pays has become complicated. In addition, unexpected services might need to be provided. It’s difficult to know exactly what a patient owes without an effective billing system that combines numerous variables. However, the days of “We’ll bill you after insurance pays” are over. Collection rates from insured patients drops to only 50 to 70% once the patient leaves the office and continues to drop as time passes.

Take advantage of billing software and real-time records to always know where your patients stand and to provide accurate estimates. Don’t expect patients to know their deductibles or coinsurance percentages. Train staff to verify insurance and check the status of a deductible before the patient arrives. Provide the patient with an estimate of services and the total amount that will be owed at the time of service. Make the information available before the day of the patient’s appointment, using their preferred method of communication. If you have a patient portal, send an email reminder to check-in to view the estimation of costs, request a payment plan or question the charges.

  • Be specific. Train staff to be service-oriented. Patients should view your staff as a resource, not just a bill collector. For example, a staff member might say, “I have you scheduled with Dr. Smith next Tuesday. The cost of the office visit is $xxx. Based on your symptoms, you may need an x-ray. The estimated cost of the x-ray is $xxx. Your deductible has been met, so you are responsible for 20% of the total cost per your coinsurance policy.” Conversely, if their deductible has not been met, inform the patient they will be responsible for the total amount, but offer payment options/plans. The right data available to your staff enables them to have this customer centric approach.
  • Be proactive. One survey revealed 75% of providers said they provide cost estimates upon request. However, only 25% of patients surveyed said they routinely request an estimate. Many patients don’t realize this service is available. Be proactive. Improve customer satisfaction. Set expectations and raise your chances of getting paid in full. Strategically use the power of data to achieve these goals.

Technology: The Key to Customer Satisfaction

Healthcare has made a huge shift to a consumer-like environment. Insurance companies, as well as Medicare, now make reimbursement contingent upon quality-of-care measures. Patients expect a consumer-friendly environment. As with any service, it’s a competitive market. Patients know they can take their business elsewhere if they are not satisfied. Medical billing technology, like that offered by Agnite Health LLC, an affiliate of Advantage Administration, Inc., allows providers to easily offer the options and technology that improve customer satisfaction.

For example, 52% of patients are willing to pay between $200 and $500 by credit card or debit card at the time of service. Does your technology allow you to 1) have accurate estimations ready and 2) easily process credit and debit cards? Does the transaction automatically communicate to your billing software so you can print a real-time statement with any remaining balances? Can patients pay ahead of time through your portal? Can they request a payment plan or set up an automatic draft from their bank account?

If your practice is behind in using technology to offer billing options, you are not alone. A recent survey found that only 20% of providers and healthcare organizations have credit-on-file capabilities. Are more options really what the consumer wants? Consider the rest of the survey’s findings:

  • Credit-on-file was the most favored method for bills of $200 or less.
  • Paying through a patient portal came in second at 18%.
  • Using the provider’s website for payment was favored by 16% of patients.
  • 9% chose automatic payment plans as their preferred method.

The study’s organizers concluded, “Our study indicates strong patient interest in more convenient ways to understand and pay their bills. Ironically, patient demand is ahead of current hospital and practice adoption.” Another report from InstaMed revealed that 50% of patients would change providers simply for the opportunity to pay via their preferred method and for a clearer understanding of their financial obligations. The key to effective deductible and coinsurance payment management is technology. Technology opens the door to better customer service, communication and collections.

“When compared to provider expectations and behaviors, the percentage of patients seeking technology-based payment options via email, e-statements and automated payment plans is indicative of healthcare consumerism’s significant influence,” said Bryan Fiekers, HIMSS Analytics Senior Director of Research Services. Is your office keeping up with this trend?

Billing Best Practices

Healthcare has undergone an evolution since the passage of the Affordable Care Act in 2010. It’s been a huge process shift not only for providers, but patients too. With the beginning of a new year, deductibles reset. That means more financial burden for patients and an increased chance that providers won’t get paid. Put in place these three best practices to start 2018 off right.

  • Offer options and make it easy for patients to pay.
  • Educate staff on the importance of being proactive and customer friendly.
  • Use technology to improve patient communication and set expectations.

One of the best ways to ensure that your practice is able to place 100% attention on your practice’s billing cycle and collections, while also keeping current on new medical billing regulations, is by outsourcing this task to a reputable billing organization. Agnite Health LLC, an affiliate of Advantage Administration, Inc., helps practices boost their revenue flow by streamlining the billing and collections process. We’ve put our 25 years of experience, specifically in ophthalmology billing, to work for hundreds of practices. To learn more about the tools provided by Agnite Health, contact us today.