Change is hard but necessary

Our industry faces change much like the dinosaurs faced extinction, whether it be getting the doctor to use tablet computers to put procedural notes in the exam room, or getting offices to change hours, staff to process claims differently, or which candy you put in the candy dish at the front desk, someone in your office is going to protest the change and state emphatically this is not how we always did this and it will not work for us.

Revenue cycle management is no different. Change is difficult, change is burdensome and change requires learning new things.

Some change is being forced on us, things such as EMR and EHR requirements, red flags compliance, more stringent auditing and procedures on processing Medicare and Medicaid, payer remittance policies, electronic eligibility, all are coming or here and we have to change to be able to continue practicing medicine.
Self pay, direct to patient billing or patient account billing, whatever you call it is no different and it already has changed and is changing again and ongoing. What we already have had to deal with, and in most cases are not doing it very well to date is:

• Self pay has grown to nearly 40% of the gross revenue for the typical provider, that is right , nearly 40 cents of every dollar now comes directly from the patient
• CHDP and HDHP plans are prevalent and expected to double in volume in 2011, and these plans carry an average of $3,000 per individual and $5,900 per family.

a.    There are 8 million or so today and all experts anticipate this to be 16 million in 2011

• Uninsured patients are going to disappear and they are going to flood the clinical networks with routine and maintenance care needs 32 million of them.
• Patients have been trained that providers are slow to send them to collections, will write down the balance and that law in many states restrict collection activity
• The average good paying patient takes 3.3 statements to pay a legitimate invoice
• Nearly 50 cents of every dollar billed directly to patients goes uncollected each year, do the math, if it is 40% of your revenue you are never collecting 20% of your gross revenue
• Point of care collection is a fast trending reality and most are reluctant to even ask for the money.

All the change coming from Health Care reform, red flags compliance, government influence in your practice, are realities that you have to face.
What has not changed and is so very slow to happen is to change the way we bill and collect from patients their portion of the bills. We still try and retro fit a billing system that was designed by, for the benefit of and ease of the insurance companies. It was never designed to bill thousands of high risk payers, which is what patients are, like it or not. And as the percentage of what they are responsible for grows the causal damage this creates is monumental. No raises to staff, no growth for the practice, laying off staff, seeing more patients daily to cover the expenses of the operation, working more hours, doctors taking second jobs are all common place in our vertical today. And the quality of the care and the patient loyalty to our practice are also directly affected by not collecting these dollars more efficiently.

And why, because we refuse to change, we refuse to learn how the technology in this sector solves the challenges, we refuse to ask our patients for our legitimate cash.

Of everything that is coming down the road and as soon as January of 2011 the one thing you can impact today, by making change, by taking advantage of what is available we ignore and suffer the damages as an industry.

You can collect more of this money; you can reduce the hard costs of billing today and have an immediate impact on your cash flow now. This is no longer an area where you can think about change, you must make it now. And the change needed is not adding more infrastructure or trying to retro fit the broken billing system, it requires adapting to the new technology and changing the policy of when and how a patient is expected to pay you for the legitimate care you provide.

Listen to what the MGMA, HFMA, AHA and the AMA are telling you, collection of the money at the point of care, or establishing what the patient owes then and arranging payment plans, is a necessity and it is available today.

Two areas must be addressed to collect more money from the patient efficiently.

1. They must agree on the amount they owe before they leave from the first encounter
2. You must take control away from them as to when it is paid, you must have this control

The following are statistics that should help you realize you no longer can resist the changes.

Good Pay Patients require 3.3 statements before they take action.

49.3% goes uncollected each year.

The cost of sending a statement is $10.00

1% of unemployment adds 1.1 million uninsured.

20% of businesses say they will eliminate health benefits in 5 years or less.

We spend 15 cents of every A/R dollar to collect that dollar.

Health Care reform is going to raise, out of pocket for patients.

CDHP and HDHP plans have tripled the out of pocket expenses for patientsThe national recovery rate for collection agencies in our vertical is 15.77%

The decision you make today is to solve the challenges starting January 1st 2011

16 million more Medicaid Patients

16 million more insured patients

10 to 20% more patient load with the same staff numbers

Double the number of CDHP and HDHP plans

Pre-existing conditions

Age 26 dependents

9.8% increase this year and another 9% expected next year all passed on to the patient

More patients, more statements, more dollars billed

No additional staff, still writing off 49% and more burden for an already broken system that will now cost you more for even less results

So when you get that call from one of the companies wanting to sit with you and discuss revenue cycle management, change the answer and set the appointment.

What you need from the technology is

1. Instant insurance eligibility pre service
2. Full financial balance of the patient, co-pay, remaining deductible, remaining out of pocket and coinsurance by procedure performed or scheduled
3. A line item statement or mock EOB before they leave from the first encounter
4. Pre-authorized and automated payments on credit or debit cards or checking or saving accounts

Many companies will promise the world but without these tools they will not collect more of the money billed or reduce the hard costs associated with cyclical billing.

They exist but do your homework

About the author

Anthony Wunsh is the President of Medical Pay Solutions, a revenue cycle management company consulting company dedicated solely to the direct to patient sector. He has worked with and consulted with thousands of providers and researched all the products and technology available. For more information contact him at

Anthony.wunsh@medicalpaysolutions.com

Office 630-799-8142