Can you increase your bottom line and simultaneously deliver a positive patient experience?

With the increasing news of patients failing to pay their medical bills, pressuring them for payment may actually result in fewer dollars and referrals received – as contrary as that may sound. But there is a counter force that demonstrates a higher reimbursement rate and an improved bottom line with start-to-finish patient satisfaction.

The news on medical debt and reimbursement isn’t good. According to Debt.com, in 2021 nearly 50 percent of Americans reported having medical debt, up from 46 percent in 2020. And a KFF survey from June 2022 reports that a quarter of adults with healthcare debt owe more than $5,000. Further, about 1 in 5 with any amount of debt said they don’t expect to ever pay it off. And with the U.S. Centers for Medicare & Medicaid Services (CMS) noting that health spending is projected to grow at an average annual rate of 5.4 percent for 2019-2028, the chances for your receivables to increase is growing as well.

Payer payments are also declining with continued pressure on labs from the Protecting Access to Medicare Act (PAMA) and potential additional pressure coming with the 2023 Medicare Physician Fee Schedule Proposed Rule. PAMA resulted in significant reimbursement cuts that started in 2018. While rates were held in 2021 and 2022, additional cuts of as much as 15% are currently slated to resume from 2023 through 2025. Legislation recently introduced in the Saving Access to Laboratory Services Act (SALSA) seeks to modify PAMA and set the Medicare Clinical Lab Fee Schedule (CLFS) on a sustainable path, but considering the gridlock that can occur in Washington, there is no guarantee of success.

People’s propensity to actively seek health services is also in question. Many Americans are worried about their growing healthcare cost responsibilities – not surprising given “they are now responsible for more than a quarter of healthcare revenue” according to an article in medium.com. For many patients, the anxiety caused by worrying about how to pay their medical debt outweighs their desire to get better, says Debt.com. Rising healthcare costs, coupled with inflation increasing costs for food, gas, housing, and other essentials, are causing some people to delay necessary medical care because they can’t afford it.

While expenses are growing, the rate of those insured is dropping. CMS says the insured share of the population is expected to fall from 90.6 percent in 2018 to 89.4 percent by 2028. That loss of an insured population opens the door further for fewer reimbursements, growing receivables, and shrinking bottom lines.

PATIENTS ARE FRUSTRATED

It’s no secret that medical bills are a mystery to most patients, causing anxiety, frustration, even anger. A Becker’s Hospital CFO Report article in 2018 cited a survey in which 53% of respondents had received an unexpected medical bill during the past year – some that were higher than expected, some where patients thought insurance would cover it, and some where one bill was expected but multiple bills from different providers were received.

Price certainty and transparency are two keys to helping patients understand potential costs and plan for those expenses. Pricing knowledge eases the process for them and in turn, makes the provider more likely to get reimbursed. But clear and timely communication among all parties in the process –payers, providers, physicians, and patients – seems to be the exception not the rule.

HAPPY PATIENTS IMPROVE YOUR BOTTOM LINE

Healthcare organizations such as labs rely on repeat customers. But if patients are unhappy with the medical billing process, they are less likely to return to a healthcare provider for service. And if they are complaining to their doctor, it’s likely the physician will refer their patients elsewhere.

In the end, that means fewer referrals, patients, and dollars.

THE COUNTER FORCE

The answer to increasing healthcare collections isn’t necessarily sending more bills and making more calls as this approach can backfire, creating greater dissatisfaction with the people who have outstanding claims – not to mention creating more work for your staff who is likely already stretched thin.

To encourage more payments, patients need three things. First is a patient-centric experience from beginning to end. 

Second is a good estimate of their expected costs, including knowledge of what’s covered, and their ability to pay the balance. And third, they need to get an accurate and timely bill that aligns with the estimate and their financial situation once the service is provided – or better yet, at the time of service. Patients must be at the center of a healthcare organization’s revenue cycle strategy.

Data automation solutions implemented along the whole patient financial journey allow you to accomplish those goals while increasing reimbursements.

HOW IT WORKS

1. Collecting patient insurance and demographic data up front is a great start but is that data accurate and complete, and do you have the ability to access the information later in the process? Keep those factors in mind as you consider data automation solutions like our LabXchange®. Patient data is likely to change along the way. From job changes to open enrollment periods, millions of people change health plans and do it often. According to an April 2019 article by Axios, it’s reasonable “to estimate at least 2 million workers and their families lose or transfer to new commercial health plans every month.” That is a lot of new data you may be missing. And if you’re not accessing the information “as early as possible and as often as needed” through an automated platform, you may be losing out on critical bill payment opportunities.

The best data automation solutions leverage an extensive and continually growing and monitored network of payer connections that enable instant access to federally regulated data to find, cross-check, and fix the information at any point in the patient’s journey, improving the ability for touchless clean claim submission and expediting reimbursement. In accessing our software with patient demographic and insurance verification capabilities, for example, Sonora Quest Laboratories noted that writeoffs due to claims being too old to bill went down 10 to 15%, saving more than $1 million each year.

2. Understanding your patient’s propensity to pay their bill also brings immense benefits and again, data automation can be a game changer. Financial Disposition/Propensity to Pay tools can improve your collection strategy and help ensure you understand each of your patient’s unique financial situations to assist them in getting the care they need while easing their cost burden. For example, if a patient is struggling to decide whether to move forward with a particular healthcare service because of the cost, an authorized user in your organization could use the tool to review their financial situation and potentially offer them a discount or payment plan. Recently, one of our large genetic lab clients saw their patient payment collections increase by 8% within 30 days of the first bill by leveraging our software.

3. Data automation can also help you reduce expenses. More than a quarter of U.S. healthcare administrative spending— an estimated $265 billion—could be reduced without compromising care quality or access according to an October 2021 report published in JAMA. The Council for Affordable Quality Healthcare’s (CAQH) 2020 Index reported that data automation resulted in efficiency savings of $122 billion annually for the US healthcare and dental system in 2020. And it allows your billing staff to focus on more value-added efforts and the sales team to proactively build your pipeline instead of spending their time calling doctors or patients looking for missing information.

PATIENT SATISFACTION AND AN IMPROVED BOTTOM LINE ARE SIMULTANEOUSLY POSSIBLE

Using data automation tools in your revenue cycle strategy can improve your bottom line through improved staff efficiency, increased collections, faster reimbursement, and reduced expenses while simultaneously providing a quality patient experience that increases both their and the referring physician’s satisfaction. If you’re ready to investigate how data automation might help your organization, our team at FrontRunnerHC would love to talk to you about a customized program targeted precisely to your needs.