By Tom Herald
The consumer-driven health care era has transformed the role of the patient. Today, patients are more informed about their treatment options and what they will have to pay out of pocket. Driven by a desire to obtain affordable health care, patients seek providers that align with their overall needs without compromising care.
The evolution of the health care business model corresponds to the development of the payment process. What once was a business-to-business transaction has been replaced by something more complex and difficult to navigate: a business-to-business-to-consumer model. In a business-to-business model, a medical practice would file a claim to the insurance company, which would then adjudicate the claim and pay the practice for services rendered.
In the business-to-business-to-consumer payment model, physicians send the insurance company a bill to adjudicate. The insurance company may well notify the physician that the patient owes a deductible, which the physician would then bill to the patient. After billing the patient for the deductible, the physician has to get that payment adjudicated by the insurance company and only then can the physician bill the patient and collect for the services rendered.
This model has taken shape due to rising deductibles and copayments. In 2016, covered employees had an average deductible of $1,478 for single coverage, up from $1,318 in 2015, according to data from the Kaiser Family Foundation. Additionally, many covered workers have copayments; the same source indicates that 67% of covered workers have a copayment for a primary care visit. For primary care, the average in-network copayment totaled $24 in 2016. An InstaMed study found the number of consumer payments to health care providers increased 193% between 2011 and 2014.
Therefore, medical practices must employ the right tools to make this process as painless as possible. As higher premiums and deductibles propel health care organizations into more consumer-facing interactions, medical groups understand they can no longer focus solely on the clinical side of care. They must also understand the revenue cycle management (RCM) process and ensure patients have the information they need to follow through on payments. RCM technology can assist practices as they seek to collect payments from their patients while also creating a satisfying experience.
How to Limit Friction in the Payment Process
Friction is defined as any irregularity or exception to an otherwise smooth payment process. For instance, if a patient calls and complains, it represents friction in the process. It is critical to recognize the amount of patient friction in the process and how it is measured; this depends on how clean the data are, how the carrier processes the claims, and the ability of a patient to pay.
When physicians fail to effectively manage claims and obtain the necessary information from patients to avoid payer denials, they risk creating diversions in the payment process that can harm the patient-provider relationship and create friction. For instance, a physician could obtain an inappropriate denial from an insurance company, a situation that raises a slew of questions, including whether the administrative team received all the correct information from the patient. This could be a product of a staff member failing to verify a patient's information or the patient hastily writing down the incorrect information. Whatever the cause, friction occurs—something physicians must work to avoid in their RCM process. In cases where inappropriately denied or paid claims are not followed up on, a practice is essentially walking away with nothing.
Technology can be used to assess and determine potential friction points, including a patient's propensity to pay, the insurance company's likelihood of denying or sending inappropriate denials, and the medical practice's consistency in relaying accurate insurance or payment information to the patient. However, all of this information must be 100% correct because inaccurate information can completely alter a specific patient's estimated friction.
Reducing Patient Friction With Technology
If practices successfully employ technology to determine an estimated amount of friction, they can then fine-tune the best next steps to boost a patient's likelihood of paying. Catering technological solutions to each patient means they will likely use platforms that best suit their needs and preferences.
For instance, patient profiles can be personalized based on what patients are most likely to appreciate in terms of collection methods. Millennials may want a text telling them to pay online, whereas a 70-year-old patient may want to receive a text because their grandkids are texting, but they may also want to handwrite a check and drop it in the mailbox.
There are many ways physicians can work closely with patients during the time of service and beyond to limit friction. The following are three options:
In summary, a healthy blend of customer service and technology can help practices avoid friction that impedes a successful payment process. Practices that fail to prioritize consumers will fall behind their competitors, both in terms of reputation and finances, as patient satisfaction is a core component of the value-based health care era.
Letting the patient billing experience fall by the wayside may cost practices significant amounts of money, which is where an RCM partner comes into play. With an increase in high-deductible health plans, patient-focused care is here to stay, and practices can and should prepare to thrive in this landscape.
— Tom Herald serves as senior vice president, radiology with Zotec Partners, a provider of revenue cycle and practice management services.