The Problem
For optimal performance, medical practices must collect from patients at the time of service. Developing a purposeful strategy that incorporates modern technology and artificial intelligence can increase your overall practice performance.
High patient insurance deductibles typically cause first calendar quarter cash flow to suffer. Additionally, it is increasingly difficult and costly to collect from patients once they leave your office.
Moreover, patient insurance plans continue to push toward higher amounts of patient responsibility through higher deductibles. It is clear that there is no end in sight. Therefore, strategies for collecting from patients are an increasingly critical component of practice revenue cycle management (RCM).
It’s important to continue using traditional methods of pursuing patient payments after the time of service. However, these methods are expensive and increasingly ineffective. Patient-friendly statements and letters are extremely costly, due to postage and materials costs. They are no longer sufficient to collect a meaningful amount of the patient balance. Finally, phone calling, texting and emailing efforts rarely lead to a meaningful increase in collection rate.
The Solution
Today, practice’s with the most successful RCM strategies have effective time-of-service patient collections processes. These practices have an accurate method of estimating the precise amount owed by the patient. The estimate depends on the patient’s benefits and eligibility for the procedure performed on the date of service. It also depends on what the patient’s insurance typically allows for that procedure for your practice, based on your managed care contract.
HIPAA provides a standard transaction dataset, known as ANSI 270/271, to determine the patient’s benefits and eligibility at the time of service. This data is typically available through your EDI claims clearinghouse. Historically, the data available in these transaction data sets was spotty, but over time it has become much more complete and meaningful.
To determine the allowed amount for the procedure, based on your payer MCO contracts, you can refer to a copy of your contract, if you have one and if you know how to interpret the information. This is often extremely time consuming and much easier said than done.
Another way to determine this amount is to scan recently adjudicated claims explanations of benefits (EOB’s) to determine the average amount allowed by the patient’s insurance plan for the specific procedure performed. Doing this manually is time consuming and expensive. But now, with modern artificial intelligence (AI) and machine learning software, this can be accomplished in seconds.
Software data analysis is only as good as the quality and accuracy of the data analyzed. Modern claims clearinghouse ANSI 270/271 transactions data, as well as EOB data in modern billing software applications, should be highly accurate.
Example:
Patient with advanced peripheral artery disease (PAD) is referred for an arterial revascularization. Your practice staff begin the revenue cycle management process by confirming the patient’s benefits and eligibility with their insurance company, and then submitting a prior authorization request for the procedure. Note, for tracking prior authorization requests, please see Prior Auth Tracking Tool
The prior authorization is approved and the patient’s procedure is scheduled.
Your practice should communicate with the patient during scheduling, or at any time before the date of the procedure, to ask the patient to be prepared to pay for their portion of the visit at the time of service. Using the method described above, your practice can estimate the amount that will be owed by the patient, but must acknowledge that the deductible amount and estimate may change by the date of service.
The patient arrives and the procedure is performed as scheduled. Using the method described above, your practice determines the estimated amount that will be owed by the patient, based on their benefits and deductible amount used as of the date of service.
From patient account, benefits & eligibility current information from ANSI 270/271:
Calculated Estimate:
Summary of patient estimate calculation:
- Patient insurance plan: Anthem BCBS
- Patient benefits and eligibility:
-
- Co-pay = $0
- Deductible = $3,600.00
- Co-insurance = 20%
The total allowed amount by the patient’s insurance company for the case is $459.10. Any applicable copays noted would be taken from the allowed amount first. Next, we would draw from the deductible, then the patient’s co-insurance. Since the allowed amount is less than the $3,600.00 deductible, the patient will owe $459.10.
Collect:
Finally, you collect from the patient, typically via cash, credit card, or some method of healthcare financing. The front desk staff collects $459.10 at the time of service before the patient leaves the office. For the practice, it is cash on the barrelhead; for the patient, it is one less medical bill to worry about.
Patient Receipt:
The practice should print a copy of the estimate along with the receipt of payment for the patient. The estimate should explain that once the insurance company adjudicates the claim, it is possible that a small amount may still be owed by or refunded to the patient.
Conclusion:
Using AI tools such as this to assist with collecting estimated patient payment amounts at the time of service can have an immediate positive impact to your practice performance.
For more information on this topic, or how you can use StreamlineMD’s software to help your practice prosper, please contact your StreamlineMD client rep or sales@streamlinemd.com.
