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Account Receivables Management Services Blog
DECA Financial Services recently read an article regarding the ACA’s attempt to lower the uninusred ranks in America. Please click here for the entire article.
At the beginning of 2014, millions of Americans will be required to obtain health insurance or face a tax penalty. As several recent studies and media articles have demonstrated, those millions known almost nothing about those requirements.
Members of President Obama’s administration have promised in recent weeks that the federal government will publicize the new insurance requirement widely, but as healthcare providers in at least one state have already learned, the real promotion to low-income patients will be done by healthcare providers.
Massachusetts residents have been required to have health insurance for several years. Recently the Healthcare Financial Management Association (HFMA) published a case study of Boston Medical Center (BMC), which revealed it doubled its patient financial services staff temporarily to get as many of its patients signed up for health insurance as possible.
Most healthcare providers do not have the resources to increase staff so suddenly, so one option to consider is reaching out to your partners for additional help.
To read the rest of this post with advice for how to leverage your healthcare debt collection or revenue cycle management partners to assist with these challenges, click here.
Note: This month DECA Financial Sercices, LLC is marking the three year “birthday” of the Patient Protection and Affordable Care Act (ACA) with a guest blog post by the contributing editor of insidePatientFinance.com, Evan Albright. In the article, Evan notes that although we’re three years into the ACA, major portions of the bill–and the ripple effects they will create–have yet to be implemented.
-John Owen, Director of Client Development
Healthcare Reform Turns Three, But Major Impacts Yet to Be Felt
The Patient Protection and Affordable Care Act turned three years old this month and it feels as if we are waiting for the other shoe to drop.
For most Americans, the ACA will provide protections long needed, as previously uninsurable pre-existing conditions no longer prevent them from obtaining coverage, as limits are placed upon deductibles in new health plans, and as health insurance as a whole become much more available.
But while everyone will have access to health insurance, except for those with the lowest incomes, it will not become more affordable. As we pointed out last month, the ACA will reduce the pool of the uninsured but in turn exchange create a larger pool of under-insured.
For providers, having a larger pool of insured patients is a large benefit. But as we have already seen as a result of parents allowed to extend coverage to their young adults children, it offers no guarantee that providers will be paid. As one survey last year found, more than 50 percent of young adults who reported trouble paying medical bills had been covered by insurance.
To read the rest of this article, click here.
A recent article on Forbes.com encouraged parents to talk with their kids about credit, not just dollars and cents, when they’re young. In the article, Stephanie Eidelman, the president and publisher of insideARM.com, shared her own experience of discussing financial issues with her children.
In Forget Cash – Teach Kids About Credit as Early as 6 or 7 Years Old, Eidelman writes:
My second graders are learning about cash. Okay, you’ve got to start somewhere. But cash isn’t what gets us into trouble. It’s credit. And that’s what so many of us use every day. My kids see me using credit all the time. They don’t often see me paying bills. And now that I pay most bills online, there isn’t much difference between what it looks like for mommy to pay bills and what it looks like for mommy to answer email, or be on Facebook.
According to John Owen, Director of Client Development, at DECA Financial Services, LLC, “This lesson is an important one for both parents and children. While conversations about money are often the foundation of teaching kids basic skills like counting, it’s a good idea to start talking about money in various forms–including credit–from an early age. Simple financial literacy concepts can be included in this kind of early education and will one day be as important to kids as tying their shoes or memorizing state capitals.”
To read the full article on Forbes, click here.
The next two years will be rocky for healthcare providers as the number of uninsured and underinsured patients is expected to soar until the full force of the Patient Protection and Affordable Care Act kicks into action.
In 2015 a greater percentage of the population will either be covered by health insurance or will have greater government protection through Medicaid expansion. In the meantime, prepare for a big increase in self-pays and patients with higher deductibles.
These next two years will be bridge years for healthcare reform and stressful to healthcare revenue cycle managers across the country. Here’s what’s ahead for Self-Pays and Uninsured Patients and Underinsured Patients.
For some physicians and hospitals, the new HIPAA Omnibus Regulations provoke a sense of dread at the threat of increased penalties and red tape. But taken in total, these regulations will strengthen the relationship between healthcare providers and their business associates.
The new regulations have been in the works for almost three years were made final last week. There are few surprises amid the 573-page document as many of the regulations were proposed long ago.
One of the most positive aspects to the new regulations is that they clarify and specify the legal relationship between providers and their partners, such as collection agencies, that manage patient information. While the new HIPAA regulations don’t let providers off the hook for transgressions by business associates, they do hold business associates accountable for protecting patient privacy to almost the same standard as providers.
One area in particular where regulatory jurisdiction now will be fully exercised is subcontractors to business associates. The very same protections that must be in agreements that providers are required to have with their business associates must be in place between business associates and subcontractors who comes in contact with patient information.
Providers, fortunately, will not be required to negotiate business associate agreements with their partners’ subcontractors — that is solely the responsibility of the business associate.
One of the most important aspects of a medical practice’s success is collecting the money that a patient owes them. This seems like a “no-brainer,” right? Well that does not necessarily make it an easy feat. Patient out-of-pocket fees account for 30 percent of a practice’s revenue, yet once a patient walks out the door, chances of collecting that money are practically cut in half.
The bright side is that there are ways to improve the collections process in order to ensure payment efficiency. After speaking with practice management consultants, we found four strategies to improve patient fee collection while maintaining strong customer satisfaction.
1. Train Your Team
The office manager may handle claims, but the entire staff should still know insurance policies and procedures. A good way to do this is to train employees on their own benefits. That way they can see it from both perspectives.
Your staff should also be trained on how to ask for money from patients. Requesting payments can be tricky. A good method is to have a script of exactly what to say. For instance, instead of saying “you owe 30 dollars,” a staff member could ask “cash, check or charge?” This less confrontational approach lowers the chances of a patient being turned off.
2. Educate Your Patients
A patient should never be blind-sided by costs. It’s best to be as upfront as possible. This is particularly applicable for patients who have a high deductible or are self-pay. For these patients, try and talk with them before they arrive for their appointment. If your practice offers a discount for patients who pay large amounts on the spot, then discuss this opportunity with them before the time of payment. This makes patients more comfortable about paying a larger amount of the bill.
3. Automate the Collections Process
This is the 21st century. It’s time to accept credit cards. You pay a higher fee for credit card payments, but more patients are willing to pay this way. Ask your patients to keep their credit card information on file. With their permission, you can automate payments of an agreed upon amount.
Starting in January 2013, the Affordable Care Act will require practices to automate patient eligibility too. This should dramatically decrease issues in accounts receivable because patients will know their financial responsibility within 20 seconds.
4. Be Professional About Balances
In the age of information, there should be a record of everything. There should be something in writing for the sake of your practice and your patients. If you decide to accept installments on a balance, have the patient sign a promissory agreement. If you don’t keep it professional, they won’t either.
No matter which of these methods work best for you, be sure to keep the purpose of each one in mind. Communicate your expectations clearly to your staff and patients to make sure there’s an understanding on the how, when and what of out-of-pocket fees.
As the fiscal year for many begins to draw to a close, now is the time to evaluate the effectiveness of your medical debt collection partners.
This should be a once-a-year routine, and DECA Financial Services suggests that you follow the old maxim we learned as children before crossing the street — Stop, Look, and Listen.
Odds are that you are in in the midst of your budget cycle or just finishing it. In the lull between now and the holidays is a perfect time to evaluate your relationship with your collections partner. Any agency worth its salt will expect you to take the stock of your professional relationship at least once a year.
First, analyze the performance of your collection partners over the course of the year. Have they met your expectations? Did you establish those expectations in advance? This is your opportunity to bring your relationship into focus, especially if you have in past years been vague about your demands on your partner.
Now is the time for you to identify and establish the metrics you expect your collections partner to achieve for the next year. The more specific your expectations, the better direction they will have to follow. As the old saw goes, “if you can’t measure it, you can’t manage it.” Most agencies want to know what is expected of them, and by the same token, without strong metrics, those agencies that are less professional will find it easier to take advantage of you.
Don’t go into the next year with a telephone call. This is the time for a face-to-face with your collection partners. Either schedule visits to have them come in to meet with your, or even better, schedule a time for you to visit and tour their facilities. If you haven’t traveled to where they are you will be surprised by how much you learn with a site visit.
If you bring them into your office, be certain to communicate in advance what reporting data you wish them to bring, and what supporting documentation you expect to see. It is also very important to create an agenda well in advance so everyone knows what is expected of them. If you don’t, you may find your partner is unprepared and that will waste everyone’s time.
The truth is you are not meeting with your partner to lay down the law. The most successful relationships between provider and collection agency are those where both parties are careful listeners. Here are some areas where it is vital you keep your ears open:
Are they compliant? Every year there is some change in medical collections regulations or laws. For example, this year the IRS is considering the imposition of a 120-day waiting period before patients who may qualify for charity care can have their debt reported to a collection agency. Is your collection partner aware of the new regulation, and what are their plans to address it?
Are they following scripts? This is a good time to actually listen to your partner’s staff as they make collection calls. Are they following the scripts that you and your partner have agreed upon? Also, are they being properly supervised, with spot checks by supervisors to make certain they are following the course you have set for them?
What do they think will improve the business relationship? Your collection partner will most likely work with numerous providers. If they know their business, they will be able to give you feedback on how best to improve the relationship. The very best providers are those who listen as much as tell. Take advantage of their expertise, and built their feedback into demonstrable metrics for the following year.
Once you have stopped, looked, and listened, proceed with the next year’s work. If you make this an annual occurrence, you should see an increase in your collections and in patient satisfaction, or failing that, the justification to find new collection partners.
The Treasury Department has heard from the medical associations and ACA International on proposed rules that would greatly restrict how hospitals run their patient financial services departments and manage their third-party collection agencies.
You are no doubt already familiar with the proposed rules that, if enacted, will be enforced by the IRS and reported by not-for-profit hospitals annually on Schedule H, Form 990. The comment period on the proposed rules, introduced this spring, closed on Sept. 24.
One of the big question marks when the Schedule was revised three years ago was the section that required tax-exempt hospitals to refrain from “extraordinary collection actions” until it could “reasonably” determine whether a patient qualified for charity care/financial assistance. That left many scratching their heads as to what exactly is an “extraordinary collection action,” and what, precisely, was “reasonable.”
Several organizations asked the Treasury to be specific, and at least among healthcare providers, the legal community, and collection agencies, there was one area they wanted excluded. As the American Bar Association stated in its comments to the IRS almost two years ago, “making a report to a credit rating agency or engaging a collection agent” should not be considered “extraordinary.”
The Treasury Department apparently did not agree, and last spring’s proposed regulations made a point of making both actions “extraordinary” — with caveats.
The new regulations propose a 120-day notification period following the provider’s first bill to any patient who might qualify for financial assistance. Once that period expires, the patient has another 120 days to submit a financial assistance application. During that 240-day window, the hospital can engage a collection agency to collect that debt but it cannot sell the debt to a third party or report the patient to a credit reporting agency, as both actions are now defined as “extraordinary.”
At this moment the Treasury is reviewing the comments on the proposed regulations. It’s anyone’s guess what regulations they will impose. Until then, there are proactive steps you should take to prepare for whatever the final decision will be.
Communicate with your collection agency partners
Regardless if you meet regularly with your collection agency partners or infrequently, now would be a good time to have a conversation with them to determine what steps they have taken, if any, to prepare for the Treasury’s decision. More importantly, let them know what your expectations are and what they will be based on possible scenarios of what the IRS will eventually decide.
You might decide to have your collection agency partners immediately refrain from taking any of the actions defined as extraordinary collection actions in the proposed rules. In addition to selling the debt and reporting to a credit bureau, the IRS definition list includes:
- Placing a lien on an individual’s property;
- Foreclosing on an individual’s real property;
- Attaching or seizing an individual’s bank account or any other personal property; Commencing a civil action against an individual;
- Causing an individual’s arrest;
- Causing an individual to be subject to a writ of body attachment; and,
- Garnishing an individual’s wages.
Engage your collection agency partners to uncover candidates for financial assistance
Make certain your collection agency partners have intimate knowledge of your financial assistance policy. In most cases, your collection agents will spend more time communicating with your patients then even their respective doctors, and will certainly have more detailed knowledge about the patient’s financial status.
Make certain your own compliance house is in order
This is a good time to review your own collection policies and your procedures for screening patients who might qualify under your financial assistance policies. The sooner you identify potential candidates and either add them to your charity care rolls or eliminate them from consideration, the sooner you can move them off the 240-day freeze.