Historically, excessive write-offs have been a very common practice for health care providers in America. But as industry culture changes, high deductible health plans and implications of the Affordable Care Act transform revenue cycle practices, these write-off policies and procedures are undergoing more and more scrutiny.
The most significant change in healthcare revenue cycle today boils down to one simple fact: Patients are the new payers. According to the 2016 Trends in Healthcare Payments Annual Report (THPAR), consumer healthcare spending is expected to grow to $608 billion by 2019. When this report was first published in 2010, 10 million consumers were enrolled in HDHPs. Less than a decade later, 75 million consumers are enrolled in HDHPs. These statistics should send a clear message to providers that their primary revenue cycle focus should now be collecting co-pays and balances from patients.
A common rule for healthcare practices are to write-off no more than 5% of total expected collections. This can be challenging if a practice does not have solid strategies in place to ensure patient payments are being collected efficiently.
Accurate Insurance Eligibility Verification
Verifying insurance eligibility prior to a patient visit is a must for both the practice and the patient. More importantly though, HOW and WHEN the insurance is being verified can determine the accuracy of the information being provided. Verifying insurance eligibility a week ahead of the scheduled appointment can result in rejected claims and potential write offs as a result of benefit changes. Using a batch automated eligibility program allows practices to check insurance status quickly for multiple patients the day before or day of.
Collect at Time of Service
If a practice sets a precedent that co-pays and balances will be collected at time of service, patients will ultimately follow suit reducing unnecessary write offs. “73% of providers reported that it takes one month or longer to collect a patient payment,” according to data from the THPAR. This collections process is expensive and harmful to the practice’s revenue cycle. Establishing clear guidelines on co-pays and balances with new patients helps them to understand payment expectations.
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Offer Convenient Payment Options
This new era of healthcare requires providers to treat patients just like any other business would treat its target consumer. Making it as easy as possible for patients to pay their healthcare bills with online and mobile payment options will greatly benefit the financial health of a practice and reduce unnecessary write offs.
With the right revenue cycle guidelines, payment technology and eligibility software in place, providers can transform the financial health of their practices, reduce write offs and make a smoother transition to this new era of healthcare payments.