January 2011 operational changes for healthcare providers and how to prepare for them

In line with our commitment to your revenue cycle management, especially the self pay portion, I have done extensive research on the affect the Health Care Reform legislation passed will have on your practices and operations beginning January 1^st.

We can expect significant changes in our daily routine and many will be negative. I am sharing what I have learned just in case you have not been able to spend the time and develop a strategy for these changes.

The significant changes that take affect as of January 1^st 2011 are:

1. All pre-existing patients will have to be covered, increasing the number of insured patients substantially
2. Dependents until age 26 are to be covered on family plans, again increasing the number of insured patients
3. Premiums to employee based plans will rise a minimum of 9% (perhaps more) and the employers have already stated they will pass this on to the employee in higher co-pay, deductible, or co-insurance
4. CDHP and HDHP plans are expected to double to nearly twenty million plans and the average deductible for an individual will be $3,500 and family to $6,500 and out of pockets will average considerably more as well
5. Thirty two million uninsured patients will be added to the insured doles, sixteen million expected to be Medicaid coverage

I would like to offer my opinion of the consequences that these changes, taking place in a few months will have on your operations and some suggestions to offset these consequences.

All pre-existing patients will have to be covered, increasing the number of insured patients substantially

Dependents until age 26 are to be covered on family plans, again increasing the number of insured patients

In my opinion this is going to have several causal affects.

1. Many of these patients today only seek care in emergency situations because they are not insured and most visit Emergency Room for care. By adding them to the insured category they will seek more routine care and will be more likely to seek this care at your facilities.

• a.    While on the surface this may seem like a potential boon to business, it will add a substantial increase in patient load and all the processes that accompany this increase. So you will have more payer claims to process, more self pay portions to collect, more work to your already stressed staff. This also means more potential for slow pay and no pay from the self pay portion. Now while not wanting to appear insensitive or politically incorrect, the newly insured patient, already has shown financial difficulties in the past demonstrated by not carrying insurance. They will be more challenged by the self pay than your existing patient base and are much higher risk for collections of these funds.
• b.    I suggest you work very hard to establish policies internally that require every patient to authorize automated payments through the platform; doing this now will avoid severe cash flow challenges when the 2011 changes kick in. Make this a policy, insist all patients participate and secure your cash. This will save you time on billing cycle as well as increase the cash collected dramatically. Now is the time to make this happen, so staff and patients alike are trained and proficient. Those that refuse insist on a payment method on file that you can charge all aged balances

Premiums to employee based plans will rise a minimum of 9% (perhaps more) and the employers have already stated they will pass this on to the employee in higher co-pay, deductible, or co-insurance

This is already happening; new contracts are being negotiated today. The bottom line is you will be asked to collect more from patients directly. You are already experiencing challenges in this area and this is why you purchased a platform. Again it is critical to your financial health that you insist on pre-authorized and automated payments. While I understand the compassion we feel for our patient’s ability to pay, the payer is going to pay you less, the deductibles and co-pays are going to rise and you have to secure your cash flow and avoid having to hire more staff to handle the increased patient load. This is the solution.

CDHP and HDHP plans are expected to double to nearly twenty million plans and the average deductible for an individual will be $3,500 and family to $6,500 and out of pockets will average considerably more as well

This is going to have an unbelievable affect to your cash flow. The potential that one out of every three patients walking into your facility will require you to collect over $3,000 from January through March, at the very least, before the insurance company pays one penny, you must secure these funds or risk 2011 to be the most challenging cash flow year you have ever had. Again please take advantage now and insure your staff is training patients now on how you collect through the system.

Thirty two million uninsured patients will be added to the insured doles, sixteen million expected to be Medicaid coverage

I see multiple challenges with this fact

1. More patient load without the additional staff to support it, not just in care giving, all the processes associated with a patient, scheduling, treating, claim processing, billing, collections, and follow up care
2. Increase in Medicaid patients, I do not have to tell you that the government already does not pay the cost of treatment. Add in the financial challenges each state has and I see slow pay and no pay as a real issue for reimbursement. In other words more work and patients all at little or no financial reward

Anthony Wunsh

President

Medical Pay Solutions