Using incentives to push cash up-front collections
By John Kivimaki, Director of Patient Accounts, Mary Rutan Hospital, Bellefontaine, OH
We have had a cash up-front program at Mary Rutan Hospital since 1993. Since education is one of the keys to successful up-front collections for both patients and staff we have developed many training aids.
In addition to a number of in-services for our staff, the creation of a self-pay checklist has helped them get in the habit of asking for the money. We developed role-playing scenarios from comments we collected from the checklist to assist registrars, and staff also were encouraged to discuss with their supervisors other objections they had trouble addressing with the patient.
Some of the other important points in helping your staff understand why it is important to collect cash up front are:
- Like any other business, the hospital needs money to operate. We need to educate our patients on this topic.
- We need to get a commitment from patients on how they will satisfy their financial responsibility.
- We need to realize that people do have financial problems and that we can help them find solutions.
- We also need to continue to educate our patients, in a caring and non-demanding way, about what is expected of them. One reason is that many of our patients will be repeat patients in the future. They are our reason for being in business. We need to find some way to help them with their accounts.
Implementing policies
So where does a hospital start collecting money? What patient responsibility amounts will the hospital pursue from the patient at the time of service? These amounts may range from deductibles to co-pays to co-insurance. Many of these amounts are very hard to determine unless you have access to company benefit files. And when you ask for money up front, patients will only pay if they think they owe what you are asking for.
Even on a straight self pay, you still have to come up with some sort of "final bill" if you expect the patient to pay at the time of service. But no hospital patient account system can produce a "final bill." So where do you go to pursue patient amounts?
To assist our registrars in estimating self-pay patient amounts, we developed a "most common price list" with help from the hospital's revenue-producing departments. Each department provided a list of its most common procedures, related services, and tests associated with the main procedure. Each registrar received a copy of the price list. This gave them a "ballpark" estimate of what the patient bill may be.
Another key to be able to successfully collect up front is the hospital's ability to identify specific patient responsibilities at the time of service. At Mary Rutan, we initially started asking self-pay patients for non-covered services. Along the way, we encouraged every self-pay patient to pay something on his or her account. One thing that has stayed the same is we never demand money from the patient. Instead, we use a soft-sell approach: "Will that be cash, check, or credit card today?"
Identifying co-pays
As co-pays became more prevalent in insurance plans, we started asking for these. Co-pays are typically clearly stated on insurance cards. They are straight fees and not based on services. Our registrars started to compile lists of co-pays to have at their desks when registering patients. They were called "cheat sheets."
We started sending letters to all the employers in our service area requesting information about their health care benefits and co-pays.
To make a better process for identifying co-pays at registration, we developed a co-pay pop-up window. All the co-pay information that we had complied on area employers was loaded into our patient account/registration system. When a patient who was employed by one of those companies registered, the pop-up window would appear alerting the registrar of the co-pay amount and the opportunity to request it from the patient.
The co-pay process that we employed was another way to identify specific patient responsibility amounts. We have had a lot of success collecting co-pays because patients know they owe their co-pay.
Push the golden cards
In conjunction with your cash up-front program, simultaneously promote the use of all credit cards accepted by your facility. Credit cards give the registrar another alternative to offer the patient to pay. Make it easy for your patients to pay with the use of an electronic terminal for credit card transactions in each registration area. Also offer the patient the ability to pre-authorize the use of their credit card to make monthly payments.
For the last four to five years we have used an electronic eligibility system to verify insurance benefits for all patients. The system is a batch process whereby all accounts are sent from our system electronically to the various insurances to verify insurance benefits. The information we receive electronically is run against what we acquired at the time of registration. We are at that time in the position to change any incorrect information we had gathered at registration. We also run our bad debt accounts monthly to uncover possible insurance coverage, especially Medicaid. We have already uncovered more than $1 million in this process.
We are currently in the process of going to a real-time eligibility process where the eligibility information will be available "real" time, when the patient is being registered. Co-pay, deductible, and co-insurance information will be electronically transmitted back to a "patient dashboard" for the registrar to view. This will afford our registrars another opportunity to identify specific patient responsibilities.
Incorporating the employee incentive plan
In a successful incentive program, your goals must be established, the incentive must be enticing, and the incentive must be reachable. It is a program that is structured to get people to do what you want.
For the past 15 years at Mary Rutan Hospital, incentives have motivated staff to meet the various goals of the patient accounts department, which includes the registration areas. Paying for this level of performance has successfully motivated the staff to achieve best-practice accomplishments. The cash up-front incentives for the registration areas were established because of the growing numbers of small self-pay accounts. These, for the most part, were the co-pays that were not being identified up front. After the insurance made its payment, statements were going out and taking up valuable business office time to address them. Ultimately, most of these amounts were ending up in charge-offs and costing the hospital about 25%-30% of their original amount.
Before you look at incentives, you need to set goals for your cash up-front program. One way is to look at the area you are concentrating on to increase up-front collections. For example, if you are looking at straight self-pay accounts, determine the total dollar amount that your staff register each month. If you have $400,000 a month in straight self-pays, you may set a goal for the staff at 1.5% or $6,000/month. If you have 15 full-time registers, the individual goal per FTE would be $400/month.
The setting of this goal is crucial. You will need to monitor the goal for the first six months or so to determine if it really is a realistic goal. If the goal turns out to be too high or too low, it is better to adjust it as soon as you are aware of it.
After a monthly cash up-front goal is set, we now can set up the monthly incentive levels. The incentive levels also are very crucial. The results of an incentive program are what keep the program going. Cash up-front performance needs to be tracked and compared to cost to collect to justify the program. Of course, there are other measures that contribute to the value of the program.
Examples are: increased morale, improved teamwork, and motivated staff. (See current incentives now in place at Mary Rutan.)
We are anticipating the real-time eligibility process to significantly increase cash up-front collections across the board. Currently, our up-front collections have concentrated where we are able to identify specific patient liabilities. This has been mainly collecting co-pays. We expect this process to increase patient awareness of their financial responsibility at the time of service.
With the real-time electronic eligibility process in place, a hospital has the tools to enable its staff to maximize opportunities to collect cash up front.
John Kivimaki has 28 years of health care experience. He has served on the Ohio Hospital Associations' ABC (admitting, billing, and collections) Committee for four years. He also is on the editorial boards for HARA (Hospital Accounts Receivable Analysis); The Receivables Report newsletter; and Health Care Billing and Collections Manual. In addition to his Healthcare Financial Management Asssociation membership in the central Ohio chapter for 20 years, he is also a member of the Central Ohio Patient Account Managers, having served as treasurer and past president. He has contributed many articles on PFS topics in various newsletters including Consumer Directed Healthcare, Healthcare Registration, Patient Access Advisor, Receivables Report, Revenue Cycle Strategist, and Healthcare Biller.
We have had a cash up-front program at Mary Rutan Hospital since 1993. Since education is one of the keys to successful up-front collections for both patients and staff we have developed many training aids.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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