Patient Payment Optimization in Your Ophthalmology Practice
“Revenue cycle, patient accounting and collections make up the financial engine of a healthcare provider organization—and payment processing is the fuel,” stated Patient Payment Optimization, a recent whitepaper from JP Morgan Chase. It’s true. Payment processing is at the core of every practice’s accounting workflow. Recent healthcare reform has placed more of the financial burden on the patient, making an efficient payment process even more critical for medical practices. Ask yourself, “Do my accounting and finance teams have the necessary tools to collect, post and reconcile payments?” Does this process contribute to a positive patient experience? Does your practice have all payments posted within 24 to 48 hours of receipt? Be careful when thinking, “Yes!” You might be surprised.
High Deductible Health Plans (HDHP) Add to Risk
Optimizing the payment process, from both the customer and staff perspective has been made more critical in recent years. The simple increase in volume over the past five years is staggering. The increase of high deductible health plans (HDHP) under the Affordable Care Act has resulted in more patient responsibility. According to Perspectives on Patient Payments by Medical Group Management, $1 out of every $4 is now coming from the patient. Unfortunately, patients are not as reliable when it comes to paying on time as private insurers and government payers. Research from the Healthcare Financial Management Associationfound that patient bills are typically not paid for at least 60 days. On average, providers collect only 17 cents on every dollar for those aged invoices, and collection agencies have a recovery rate of just 13.8 percent.
Trickle Down Effect
What does a higher enrollment in HDHP’s have to do with patient payment optimization? A lot. First, keeping a close watch on uncollected accounts is critical to monitoring a practice’s financial health. Becker’s Hospital Reviewcalls a provider’s dashboard of key performance indicators “the pulse of the practice.” When payments are not posted quickly, it’s impossible to monitor an accurate dashboard. Worse, when payments are significantly delayed and tossed into an unapplied credit account, dashboards may never reach full accuracy. Key performance indicators may vary depending on the goals and needs of a practice. However, collections, cash flow and revenue tracking are standard regardless of the type of business you are running.
Secondly, the quicker payments are posted, the quicker secondary payers can receive accurate invoices. If a private insurance payment comes in, and it is posted that day, the patient could receive an electronic notification of their responsibility within 24 hours. Whether it’s a doctor looking at his or her dashboard, or a patient logging in to his or her online account, balances should be updated in real-time. When everyone has accurate information, remaining balances can be collected quicker, and problems or denials can be addressed right away.
Higher Payment Volumes, Both Good and Bad
According to the JP Morgan whitepaper, there has been a 200 percent increase in patient payment volumes between 2011 and 2014. More payment volume is good, but it also forces providers to look at their processes. Are automated payments accepted? Automated payment volume grew by 300 percent during the same three-year period. What about mobile payments? Mobile payments made up more than 11 percent of all patient payment volumes. How is your practice using this technology? Are automated payments immediately posted to patient accounts? Getting those payments posted within 24 hours will ensure dashboards are correct for patients and providers, and those returned for “insufficient funds” are addressed immediately. In short, you have a lot of payments coming from a lot of different sources. Ensure that every one is posted immediately. It’s the only way to keep tabs on aging accounts, monitor the practice’s financial health, and provide great customer service.
Tools to Help
“Patient responsibility, the popularity of HDHPs, and the total volume and dollar amount of patient payments will likely continue to rise in the coming years—and higher deductibles will require healthcare providers to use every tool available to address the needs and challenges of patients,” said the JP Morgan researchers. Payment optimization is not about just posting payments quickly. It’s about utilizing the tools and available technology to meet those challenges and provide patients with stellar customer service.
The two critical pieces of efficiency are workflow and technology. Workflow involves everyone from the front desk staff that verifies insurance to the accounts receivable manager that ensures payments are processed in a timely manner, and problem accounts are addressed immediately. Technology is the second piece of the puzzle. It should work cohesively with each part of your workflow, from automated patient appointment reminders and credit card processing at the reception desk, to electronic claims submission and tracking, and key reporting.
According to one study, physicians spend almost 12 percent of their net patient service revenue on “excessive administrative complexity.” Running an efficient office is critical to meeting patient needs and the financial goals of the practice. Is your medical billing software creating efficiencies throughout the practice’s workflow? Is your practice able to post every payment within 24 to 48 hours, regardless of who paid and how it was paid? If not, let Agnite Health introduce you to superior billing software. Learn more by contacting us.