Medical Billing - Front End Strategies

A recent article in the New York Times by Ann Carrns, Medical Debt Cited More Often in Bankruptcies, discusses the increase to 20 percent from 12 to 13 percent for those citing medical debt as a factor in seeking financial counseling. She also goes on to point out that people do not want to default on medical payments. In fact, instead of not paying their healers, they will pay their medical bills with new credit cards. However, those cards may carry high interest charges especially if patient has poor credit.

In addition to that, co-pays and deductibles will do nothing but increase regardless of any health care reform implementation. All the more reason to develop sound front end strategies designed to make sure the patients understand their payments precisely and to make sure you make it easy and manageable for patients to pay. Here are three ways to do that:

• Use historical payments, insurance payouts and actual treatment data to develop accurate patient responsibility costs. This will increase your point of service collections and reduce days in accounts receivable.

• Verify patient information accuracy. Compare self-reported patient information with data on various financial information databases. This will help avoid potential claim denial errors and improve the efficiency of your registration process.

• Obtain a financial profile on your patient that can be summarized into meaningful healthcare metrics. This will increase your point-of-service collections and also reduce days in accounts receivable. You can probably receive this information by judicious and efficient use of your current system. You may have to add some modules but the technology is available.

For example, on one healthcare system, you can route patient identity information via a standard HL7 feed from your registration system. The patient financial summary compares the registration data against multiple datasets. The patient's credit report is used to calculate financial estimates. They include the probability of financial aid and collection.

You can also establish thresholds such as the Federal Poverty Level percentage cutoffs. This can be used to see if the patient qualifies for Medicaid.

The system can also generate an accurate estimate of patient costs by using historical expenses, contract modeling and insurance verification transactions.

Tap into your system to see what it can do to assist in creating a powerful front-end strategy. It's may be more robust than you think.

If not, or if you want to go in another direction, consider a web-based system that can provide all the information mentioned above. You can receive real-time access to the financial and demographic status of the patient. Predictive modeling can also be used to determine which accounts are the most collectible.

Establish Upfront Payment Plans

Using all of the information developed by your system, have a talk with the patient as soon as possible. Determine eligibility for charity care, accurate co-pay amounts and deductible ceilings. Be aggressive on upfront collection. But if that isn't possible, establish a pay plan.

For example, a person went to a chiropractor for spinal adjustments. The total charge for multiple treatments was $2,000. They patient couldn't pay for that upfront but want to be relieved of her pain.

The chiropractor established a 6 month payment schedule and took a 10% payment at the point of service. He set up a monthly withdrawal from her account that allowed her to pay over six months even though the treatment would be done after four.

You will need to adapt your medical collection strategy to the health care system changes and adjust to the current economic climate to retain a healthy cash flow.

Prior to the founding of RMK, Ronald McLaughlin was President/CEO-Founder of McMaid Total Home Care, one of the largest providers of home care services in the nation. From 1975 through 1979, he developed and grew the business from a three person enterprise to an organization that operated in five states with more than 3,000 employees. McLaughlin sold the business to Wright Market in 1979.

McLaughlin founded RMK ( http://www.rmk123.com ) in 1980 as a financial management company. With two employees and a few small accounts, he developed the business that has collected and processed more than $100 million in debt collections since its inception.

The business was diversified to focus on medical billing, revenue management, accounts receivable management, collections, subrogation, revenue enhancement reviews, and billing office-staffing analysis in addition to its full collection agency service programs.

Contact Ronald McLaughlin for more information about RMK's medical billing, coding and revenue management services.

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