Brace yourself for dramatic rise in self-pay accounts
Patients can't afford their copays
The number of self-pay accounts is increasing significantly in many patient access departments due to rising unemployment and other factors. "We have seen an increase in self-pay patients in the past couple of years," reports Craig Pergrem, MBA, CHAM, corporate director of patient business at Orlando Health. "We work very closely with these patients to see if they have any funding source or qualify for Medicaid and/or charity."
In addition, any patient without insurance scheduled for a procedure goes through financial clearance before being placed on the schedule. "That's not to say some don't get through. But we feel it is better customer service to let the patients know what they are looking at from a charges perspective before they come in," says Pergrem.
Decrease in copay payments
Michael Taylor, regional director for patient services for Sutter Health's Sacramento Sierra Regions, says he is seeing a small percentage increase in uninsured patients, but a bigger change has been the decrease in copay payments post-service.
"This results in increased assignment of patient liability to bad debt," says Taylor.
The problem is likely to get worse, in light of California having one of the highest unemployment rates in the United States. "In anticipation of increased uninsured and California state budget cuts in health care programs, we have implemented patient financial advocate positions," says Taylor.
These employees are facility-based and assist patients with understanding the cost of service, government program conversion to Medi-Cal (the state's Medicaid program), county programs, or COBRA, and if needed, charity program eligibility.
"We have brought the traditionally outsourced service of assisting patients with obtaining Medi-Cal and county program eligibility in-house to be performed by the hospital employees," says Taylor. "We feel these positions will be critical to assist patients to obtain eligibility for state and federal resources and offset the reduction in health care program workers."
Financial counselors now focus specifically on patient needs. Any insurance verification and authorization processes that do not require direct patient contact are now part of a separate workgroup. The patient financial advocates are responsible for assisting uninsured patients through final payment or adjudication of the patients accounts.
In the previous model, patients were contacted by financial counselors for payment, referred to a vendor intake worker for government programs, and received post-discharge collection and charity assistance calls from a private pay account rep.
"Now we have one advocate to assist them," says Taylor. "The patient financial advocates also assist patients with service cost estimates and questions about their bill. This new model was implemented with no increase in full-time employees and a projected reduced vendor cost of $1.4 million annually."
Patients with high deductibles, says Pergrem, "have probably been the highest increase we have seen in the hospital. Many of the insurance companies are offering plans that have $5,000 or $10,000 deductibles, and the members just don't realize it. Of course, this impedes our ability to collect."
However, Pergrem says that with an organized pre-registration area, you can contact many of these patients and let them know that they have a responsibility and give them an estimate of what the dollar amount is going to be.
"This also allows us the opportunity to screen them for any programs they might qualify for and/or set them up on a payment arrangement if they cannot pay in full," says Pergrem. "Some patients are opting to hold off on procedures that aren't urgent until they can fund the full amount."
About five years ago, the department created a policy for patients with high-deductible plans. "We did not have to use it until about two years ago, but we do have it in place, and it is being followed," says Pergrem.
Patients with high deductibles appreciate knowing in advance how much they'll owe so they aren't surprised when they receive a bill.
"We also stress that paying in advance allows them to recover at home and not be concerned with a hospital bill," says Pergrem. "It may sound simplistic, but most of our patients are very appreciative of the fact they are being told what they will owe prior to arrival." Patients are informed verbally and in writing that the quote is only an estimate.
Speaking to patients about financial matters, says Pergrem, "all comes down to treating every patient the same. Though a self-pay patient's bill will be larger, they need to be treated just like the patient who has a copay on their insurance."
Automation is key
The number of self-pay patients is "most definitely increasing" for several reasons, says Beth Keith, manager of ACS Healthcare Solutions in Dearborn, MI. These are rising unemployment, an increase in personally managed health savings accounts, an increase in self-employment due to job loss, and high-deductible medical catastrophic coverage for the self-employed.
"The need for proactive front-end collection processes has never been more acute," says Keith. "It is essential that intake staff have the ability to accurately estimate the self-pay portion, and/or anticipate the entire expected balance, for the purely self-pay."
You also need a transparent, clearly stated policy for dealing with the self-pay patient. This needs to be explained, and provided in writing if possible, in advance of the scheduled procedure, says Keith.
Keith says your organization should consider these questions:
What is the discount for self-pay patients, if any?
Are you going to allow discounts to insurance carriers but not to an individual?
Are you going to offer a charity or reduced-fee program for patients with limited ability to pay? "If so, you need a clearly defined policy and procedure that is easily activated at the point of service," says Keith.
Given all the complexity involved, Keith says that software systems are key. These systems should be able to do two things: identify potential candidates for a reduced-fee program and accurately estimate services to be rendered.
"This may also involve having financial counselors available on the front end but would increase your collections over time to a point that the investment would be worthwhile," says Keith. "I believe that the environment is such that you cannot afford to be without some of these basic services."
Patients need information
Pam Carlisle, CHAM, corporate director of patient access services and revenue cycle administration at Columbus-based Ohio Health, says her department is seeing that the "self-pay population is increasing but arising in a different fashion. Not only do we encounter uninsured patients, we are now faced with patients who are underinsured and cannot meet their out-of-pocket costs.
"Today's world is a new world of high deductibles," says Carlisle. "New plans like HealthCare Savings accounts make it very difficult for patients to manage their financial obligations related to health care."
This change, along with economic challenges, requires hospitals to think "out of the box" to help these patients cover their health care costs. "In the world of patient access, pre-service education is the key," says Carlisle. "This not only takes planning and a new skill set, it takes shifts in FTEs to make this happen. You don't want your pre-registration, precertification, and inpatient notification processes to suffer."
At Ohio Health, pre-service areas focus on educating all elective scheduled patients on their out-of-pocket costs and then helping them with financial assistance as needed.
"Patients are now turning into consumers looking for the best deal, and the most help related to their elective scheduling needs," says Carlisle. "Consumers want accurate price information before they purchase a product. Health care is no different at this time."
Pre-service teams work hand in hand with the hospital's financial counseling teams to be sure if patients cannot pay their out-of-pocket expenses, they are screened for other options such as charity or Medicaid.
"Training for the pre-service team is something that organizations cannot fall short on," says Carlisle. "We do not want to portray any image of 'no pay no service.' That is not what health care is about. Everyone is entitled the same quality care, and we need to find a way to help our patients meet their needs."
Talking to patients over the phone about finances can be difficult. "Staff should be well versed on options in their hospital, and scripting is essential," says Carlisle. "To ensure they are following scripting, we listen to their phone calls to ensure customer service is the best it can be. These calls can be pulled at any time for review."
[For more information, contact:
- Beth Keith, CHAM, Manager, ACS Healthcare Solutions, Dearborn, MI. Phone: (985) 845-1559. E-mail: [email protected].
- Craig Pergrem, MBA, CHAM, Corporate Director-Patient Business, Orlando Health. Phone: (321) 841-8261. E-mail: [email protected].]
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