Like Florida Hospital, Parallon takes the approach that it's more important to move patients to financial counseling than collections. Someone who balks at a $2,500 bill might be more likely to pay $500 to settle the account.
Parallon uses scoring and segmentation models that account for the size of someone's bill as well as their ability to pay. The model determines, for instance, whether patients get an automated reminder message or a call from a person who's able to negotiate with them. A $750 bill might also include significantly more detail, such as links to financial assistance programs.
Tenet Healthcare Corp. similarly credits Conifer Health Solutions, its own revenue-cycle division, for increasing its collection rate. “Conifer is so good at collecting receivables and knowing where to spend their efforts,” CEO Trevor Fetter said. “I think we're better than most. They don't waste their time and resources collecting bills that are uncollectible.”
Hospitals have more resources than ever for patients who don't have insurance. Baptist Hospitals of Southeast Texas, a 394-bed medical center in Beaumont, has set a goal to convert 60% of self-pay revenue that can be otherwise covered by another program to either Medicaid or charity care.
To make the conversions, it set up a patient-advocacy program run by certified application counselors—a designation under the ACA—who help people sort through their insurance options. Baptist patients are screened either before they're discharged from the emergency room or at the time they schedule a non-emergency procedure. Admitted patients might receive a visit from an advocate during their stay.
Baptist offers options such as payment plans and discounted rates to settle outstanding balances. As a community hospital, any boost from increased collections is a big help, said Jerry Thompson, director of admissions services.
The challenges of billing and collections are hitting not only hospitals but also physician practices. The average patient will take the entire year to reach a deductible, which means racking up smaller bills along the way, said Betty Smith, CEO of Atlanta-based Four Seasons Healthcare Consultants, which specializes in revenue-cycle management. “Someone's going to be stuck with that bill the patient is not paying,” she said.
Some physician practices offer patients the option of seeing a midlevel provider, such as a nurse practitioner or physician's assistant, at a lower rate. For minor ailments, a number of practices also have a nurse practitioner who will consult with patients over the phone or computer for a small fee, Smith said.
New technology offerings have played a key role in giving patients more control during the collections process. Last December, Memorial Hermann Healthcare System in Houston introduced PayMyBill by technology firm Simplee, which allows patients to view and pay bills electronically. The platform also is optimized for mobile devices, which Simplee estimates represent 20% of all payments through its platform.
The eight-hospital system saw a slight increase in bad debt from patients who purchased high-deductible plans on a health insurance exchange. It estimates that it recoups only half of the amount that patients owe after their insurer pays its portion.
“We set out to engage our patients and consumers in a more patient-friendly, digital manner,” said Dennis Laraway, Memorial Hermann's chief financial officer. “It gives consumers a chance to see their information in an organized manner, in a real-time manner. We're going from assisted—which is very high cost—to basically unassisted.”
Patients can use a credit card, PayPal account or even set up their own payment plan without ever talking to a person. The platform also allows hospitals to link to other online services they offer, prompting patients to schedule follow-up appointments or sign up for home-monitoring services.
The digital engagement also enables Memorial Hermann to keep more of what it collects. Sending a bill to a collection agency can cost as much as 33% of the unpaid balance. By allowing patients to pay their bills online, Memorial has seen self-service payments increase 53% and reduced its collection costs by 23%.
“Once you leave the healthcare entity, it becomes a very expensive process to collect that bill,” Laraway said. “If we can get patients to self-engage, there's virtually no cost.”