Can you really collect copays? Experts say yes
[Editor’s note: In this first part of a two-part series on collecting copays, we discuss how much you can collect and how to do it. Next month, we give you three tips for collecting at the end of the visit.]
- Collecting copays in the emergency department (ED) is not feasible.
- Copay collection can provide a significant boost to an ED’s bottom line.
Which of the above statements is true? The answer may depend on the strategy you use, according to reimbursement experts interviewed by ED Management.
Many ED managers have given up trying to collect copays, but this is a definite mistake, according to Michael J. Williams, president of the Abaris Group, a Walnut Creek, CA-based consulting firm specializing in emergency services. "Copay collection strategies are a critical tool needed to round out the revenue cycle for EDs," he insists.
According to Williams, you’re missing out by not collecting copays, since they are part of the payment assumptions built into payer contracts. "Hospitals often have inadequate or no systems in place to collect the fees we have negotiated in our contracts, namely the copays," he says.
Copays are generally $25-$50 for all managed care patients, and there is the potential to collect up to $800 at the beginning of the year when Medicare patients have not yet met their deductible, says Williams. "Only 35% of copays are paid after the ED visit," he adds.
If you increase this to 65%, you’ll increase revenues by $150,000 per year, assuming you collect from 15,000 managed care patients with an average copay of $35, says Williams. Some EDs are collecting $25,000 to $100,000 per month in copays that otherwise would be written off, or additional costs would be incurred by mailing bills in an attempt to collect, he adds.
EDs wary of asking for money
Too often, ED managers shy away from collecting copays, fearing violations of the Emergency Medical Treatment and Labor Act (EMTALA), according to Thom Mayer, MD, FACEP, chairman of the department of emergency medicine at Inova Fairfax Hospital in Falls Church, VA. "However, the hospital attorneys would be the first ones to tell you there is nothing wrong with doing this," Mayer says, adding that his ED has had significant success in collection of copays.
Williams notes that copays should be only collected after the patient has been fully medically screened.
Some EDs report unsuccessful experience with copay collection. "This is something we have struggled with," says Richard Eckert, MD, medical director of emergency services at University Hospital in Augusta, GA. Instead of doing a medical screening examination at triage, patients are taken directly to treatment rooms where a physician sees them and a disposition is made, says Eckert. "The chart may be made with the financial data before the patient is seen, but since we have the policy that all are being seen and fully evaluated, this does not violate any EMTALA concerns," he adds.
The complete chart is made either before or during the medical evaluation process, he says. No copay questions are asked upfront. He adds that the ED tried to implement a copay collection process at discharge. "This required additional personnel that we did not have to spare," says Eckert. "Also, very rarely could we collect anything. The patient response was almost always Bill me.’"
Here are things to consider about collecting copays:
• Use "tools" to encourage payment. Williams recommends use of the following to encourage a patient to pay at or near the time of service:
— Promissory notes. These are contracts signed by the patient or financially responsible provided at discharge.
— Self-addressed envelopes. If patients don’t have their copay, Williams recommends providing self-addressed stamped envelopes with the patient’s account number on it. "If the ED has a financial incentive for point-of-service collections, this payment gets credited to them," he says. "Staff are usually highly motivated to pursue this."
— ATMs and/or credit card machines. A strategically located ATM machine in the ED is a powerful incentive for patients to settle their copays, suggests Williams.
"This can be a freestanding machine or a little credit card machine at the desk. It’s hard for a patient to ignore or avoid this payment option if they have their ATM or credit card with them," he says.
• Determine which group will receive revenue. At Inova Fairfax’s ED, the copay revenue is collected entirely by the hospital, reports Mayer. "We have had some talk of a 50/50 split between the physician group and the hospital," he adds. "But while it is a fair amount of money, it is something the hospital is doing with the registrar people who are hospital staff members."
• Evaluate costs. Eckert recommends evaluating costs if you plan to set up a copay collection system up front. "The added cost of collecting far exceeded our ability to collect," he says. "We found that it was simpler to concentrate on moving patients quickly and safely through the ED." Although most physician offices collect copays up front, you cannot do this in the ED unless a medical screening examination has been performed, he notes.
If you decide to do this, an appropriate medical person would have to be used, says Eckert, and then if no medical emergency were found, the patient would be refused further use of resources until they paid upfront. "This means that you would have to send away both well-insured who didn’t have a copay on them that day, as well as the indigent who doesn’t pay his bills anyhow, or you would have a two-tiered system, which would be illegal," he says.
This would create a public relations nightmare for the facility and a lot of angry people within your ED, says Eckert. "I do not think that many hospitals are going to allow you to refuse further care to a paying customer," he adds.
Sources
For more information about copay collection, contact:
• Richard Eckert, MD, Medical Director, Emergency Services, University Hospital, 1350 Walton Way, Augusta, GA 30901. Telephone: (706) 774-8914. Fax: (706) 774-8639. E-mail: [email protected].
• Thom Mayer, MD, FACEP, Inova Fairfax Hospital, Department of Emergency Medicine, 3300 Gallows Road, Falls Church, VA 22042-3300. Telephone: (703) 698-3195. Fax: (703) 698-2893. E-mail: [email protected].
• Michael J. Williams, President, The Abaris Group, 700 Ygnacio Valley Road, Suite 270, Walnut Creek, CA 94596. Telephone: (925) 933-0911. Fax: (925) 946-0911. E-mail: [email protected].
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