What can health care organizations do to shorten Accounts Receivable (AR) days and prevent bad debt, especially now that an estimated 30 percent of their revenue is dependent on patient payments? On the surface the answer seems simple: Get patients to pay earlier and prevent their accounts from going into bad debt collections.
Of course, with high deductible health plans (HDHPs) now requiring patients to bear a greater portion of their health care costs, getting payment sooner rather than later – if at all – is easier said than done. Although a health care organization’s bad debt to net patient revenue should be under three percent, most hospitals are trending much higher due to increasing patient liability amounts. This reflects the staggering 42.9 million Americans who are estimated to have a health care bill in bad debt collections today.
One size does not fit all for accounts receivable management
While many vendors may say they have the technology to make upfront collection easier, it is important to understand that one size does not fit all when it comes to how patients financially interact with hospitals. For instance, all the patient access technology in the world won’t help a patient who does not understand why they have a $10,000 deductible, or are overwhelmed with individual bills from clinicians, labs and other bundled services, versus receiving a consolidated statement. Approximately 81 percent of patients report frustration with medical bills, calling for a more integrated approach with a focus on patient education.
At Savista, we have found that the best way to cut through this frustration and gain buy-in is to empower patients with education, guidance and assistance on what to pay when. Along with streamlining the billing process across the health organization, this begins by educating patients and providing quality answers to their questions. By becoming their partner, it is possible to engage patients earlier in the medical billing process and get them to pay more of what they owe.
What does this partnership look like?
Partnering with an accounts receivable management vendor starts by expanding and integrating your capabilities. Can you provide pre-estimates for upcoming services and help patients understand their coverage? Are you able to provide a consolidated bill and give the patient personal control over how their bills are delivered, either electronically or by mail? Can you provide payment options, from writing a check, auto drafts, or via Interactive Voice Technology (IVR)? All of these choices give patients more control, ultimately driving improvement in cost to collect and revenue yield not to mention a better patient experience, which fosters greater loyalty and trust.
At Savista we have many examples where we have effectively helped health care clients shorten AR days and improve front end collections. For instance, at a Midwestern, faith-based institution, we generated $3.5 million more in cash than our competing vendor’s accounts receivable management program by providing a customized, targeted program focused on high dollar accounts with a higher propensity to pay.
For a Southeastern health care system, we drove an improvement of $500,000 in cash in just three months though a strategic discounting campaign for targeted aged accounts, driving resolution and generating accounts improvement, while also decreasing AR days.
At a Northeastern regional health care system, we increased collections and recoveries by 14 percent, again utilizing propensity-to-pay revenue cycle analytics to focus on accounts with higher predicted resolution, which also brought down AR days.
We are also working with Patient Access departments on eligibility enrollment for patients who are straight self-pay and may qualify for Medicaid.
Accounts receivable management protects every dollar
Changes in legislation, including Medicaid reform initiatives continue to magnify the need to effectively manage patient responsibility. Unfortunately, many health care systems have limited resources and technology to keep up with new requirements.
With so much at stake every dollar is important, prompting many organizations to turn to experts for help. At Savista we believe in a customer service approach that has to be focused on the patient to succeed. We provide a combination of Patient Access technology and services, including Patient Access education and Patient Access training which can lead to certification.
Ready to learn how Savista can help your health care organization reduce AR days and bad debt?
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