Until recently, the patient’s share of a typical office visit was a fairly straightforward item and an incidental to practice revenue.
Often, it was a simple matter of collecting a $15-$20 co-pay. But today, accurately identifying patient responsibility prior to the visit and seeing that it’s collected at the appointment can mean the difference between practice failure or success.
The process has become exponentially more complicated, involving higher and sometimes tiered co-pays, co-insurance, deductibles, prior authorizations, varying payer rates, and (often) prior patient balances. And with the advent of Obamacare, it has become a more substantial revenue source –accounting on average upwards of 25% of a physician’s income.
The role and duties of front office staff now require specific training on how to articulate office policies and to assist patients in understanding their financial part, and due to how vastly payer rates and rules vary, the role of the Medical Biller is more critical to the bottom line of a busy office than ever. Real-time adjudication is slowly beginning to play a role in allowing practices to pinpoint patient responsibility during the visit, but it still has to be collected tactfully and well, patiently.
Accurately estimating the patient’s portion for a first-time medical exam may be a challenge, but fortunately most physician visits are with established patients making the task a little more approachable.
With so many people still uninsured or under-insured, it’s crucial to know a patient’s insurance status before they arrive for their appointment. If they’re insured, you’ll be able to correctly estimate the cost of their visit based on the reason for the visit and the known payer rate. If they’re self-pay, they will need to know the cost of the visit or procedure up front.
It’s not enough to know the amount of a patient’s co-pay. Every patient coming to your office should be researched before they arrive to determine co-pay amount, deductible amount, prior authorization status, and referral status; and in the case of therapy, how many times the patient has been seen and how many visits they have left.
Each payer determines the rate and the rules by which they pay each type of visit and procedure. In some states (primarily New-England) charging a varied rate is banned so a single fee schedule has to accommodate all payers. Most government payers after reimbursement specify a limit of what can be assigned to the patient. This results in an adjustment (a write down) of the patient’s portion. But many states and some payers allow providers to collect the full difference between what the physician charges and the insurance reimbursement, so experience in knowing all the variables of who will pay what under what circumstances means either lost or found revenue for the practice –making seasoned medical billers bread winners: Perhaps the studies that show the more we pay for a glass of wine, the more likely we are to enjoy it holds true for what we compensate medical billers too.
Prior patient balance.
One of the simplest ways to collect money from patients is to do so when they arrive for an appointment. But to seize this opportunity, you must know the amount of each patient’s open balance and implement a professional, standardized, and consistent collections approach. Front office staff must be trained to contact the patient prior to the appointment, communicate what to expect, and instruct them to bring the proper amount with them to the appointment. Timely patient statements are also a key factor in keeping patient-pay income flowing smoothly—patients who are billed long after services have a lower propensity to pay. The most successful practices send out patient statements on a weekly basis so that a bill is received within 10 days of service.
The target for your practice should be to achieve point-of-service patient pay collection rates of 90% or better.
Co-pays are a subset of patient payments, but these days, co-pays alone can amount to your annual net profit.
Five years ago co-pays were $10-25 dollars. Now they’re $30-40 –and headed no direction but up. So given a $25 average co-pay, a solo doctor that sees 20 patients per day, 20 days per month (400 patients), amounts to $500 per day, or $10,000 per month, or $120,000 per year. Add into that any remaining forms of patient pay.
This necessitate setting policies and procedures, training and educating staff, and informing and assisting patients. It also requires creating accountability by putting proper checks and balances into place to separate the roles of cash handling from posting to the financial ledger. But in a very small practice, this may require some bandwidth from the physician.
Practice Management experts suggest the following 6 Tips For Handling Cash in general:
- Both the Office Manager and Assistant should review each day’s deposit.
- Every superbill needs to be accounted for that day along with the associated collected patient-pay (this should balance to the deposit slip).
- Accounts Receivable should not be posted to by the same person who collects patient payments.
- Never mingle co-pays and petty cash. It’s too convenient to smudge and cut corners, and makes daily deposits difficult to reconcile.
- Reconcile daily: Deposit slip, bank account, and Practice Management System.
- Keep a watchful eye on all write-offs.
Also, every appointment cancelation should be reviewed to ensure the patient was NOT in fact seen. Canceled appointments may conceal pocketed cash.
With patient-pay now a considerable percentage of your practice’s income, the ability to thoroughly check eligibility and correctly calculate the patient’s portion is more important than ever. This, and the ability to smoothly handle cash, checks, and credit card payments needs to be a core functionality and highlight of any Practice Management System you review.