Eligibility & the Modern Medical Practice A guide to using eligibility verification as a catalyst for increasing cash collections.

Transcription

1 Eligibility & the Modern Medical Practice A guide to using eligibility verification as a catalyst for increasing cash collections.

2 2 Whether you are a physician, an experienced practice manager, or a medical biller, this practical guide will challenge you to evaluate how you strategically think about and leverage patient eligibility checking to maximize cash flow. A Changing Revenue Cycle Today s payment models are making it increasingly important for effective practices to closely manage the pre-visit and point-of-visit payment stages. In years gone by, practices were able to collect enough money in the post-visit revenue cycles to be sustainable and even profitable. With over $9 out of every $10 collected after the patient received service, it made sense to focus collection efforts on the post-visit stages. But, today s environment is different. Many medical practices today are realizing that they are only able to collect $6 or $7 out of every $10 owed if all they do is focus collection efforts on post-visit account receivables. Instead of surrendering to a 30 40% cut in revenue, effective medical practice leaders are fine-tuning how they approach payment collection before the visit or at the time of visit. And, one of the tactics they deploy is strategic eligibility verification. Eligibility Verification Goes Beyond Confirming Coverage Verifying a patient s eligibility for coverage is the first and most basic validation aspect of the eligibility process. Through validating coverage, medical practice staff can properly route the payment cycle either through cash coverage or insurance claims process. Understanding which payment route to take will increase time to collections and the probability of getting paid. The first challenge is to embrace the fact that patient eligibility verification is more than just confirming insurance coverage for a particular date of service. And, this resource guide outlines three practical ways to enhance the use of eligibility verification to strategically improve cash collections and payment cycles.

3 3 Three Practical Ways to Leverage Eligibility Verification #1 - Collect the Right Copay Amount With many insurance plans, the copay amounts tend to increase through the years. If the medical practice staff has yet to see this trend, they may get into a habit of seeking the $20 or $30 copays instead of the $40 or $50 copays common today. With many payers, patient eligibility verification will also include an indication of the copay amount. Why is this important to the medical practice s business? Collecting the right copay before service is delivered is essential. First, it reinforces the patient s obligation to pay the portion out of pocket for the visit. Secondly, the probability of getting the payment is much higher before services is provided compared to attempting to collect it after service is rendered. And thirdly, the medical practice will never receive the copay from any other source than the patient. No insurance company will reimburse it; no third party will pay it. It must come from the patient. Failing to collect the copay or the right copay amount can be financially devastating. Did you know? Suppose a medical practice sees 43 patients a day. On average, should it miscalculate or neglect to collect just five dollars ($5) per patient in copay related cash, the medical practice would lose $51,600 per year.

4 4 #2 - Collect Co-Insurance Amount Co-insurance percentages have also increase over the years. Remember the 90/10 plans when the payer would cover 90% of the charges and the patient was responsible for 10%? Those same plans today can be 70/30 or even higher, making it incredibly critical for medical practices to be laser focused on collecting the right co-insurance amount from the patient. With many payers, the patient eligibility verification will give detailed information on the amount of co-insurance to collect. Why is this important to the medical practice s business? Just like the copay, cash from co-insurance will not come from any other source than the patient. Therefore, medical practice staff has to become well versed at collecting co-insurance and explaining the co-insurance process to patients. Failure to collect the right co-insurance is the equivalent of offering a 30% or more discount on every service provided. Staff Training Tip: Host a 20-minute lunch and learn for front desk staff to review what co-insurance is and how important it is to collect co-insurance before the visit or at the time of checkout. This will help them better explain it to patients and increase the chances of collecting this important source of revenue for the practice.

5 5 #3 - Collect the Deductible Do you have a deductible or do you know how much deductible you still have left to pay? This is a common question that when asked by medical practices to patients, the first response is a blank stare followed by I have no idea. Couple this patient response with the trend of very high deductible plans ranging from $2,000 - $10,000, more emphasis must be placed on collecting these out of pocket payments. With some payers, the patient eligibility verification will give information about the patient s deductible based on their plan. Why is this important to the medical practice s business? Just like co-insurance and copays, the medical practice can only collect this source of cash payment for their services from patients. No insurance payer or third party will pay the practice for the patient s deductible. Management Tip! Consider a patient outreach campaign to your patients to educate them the deductible process and how to approach paying for medical services when a deductible is in play. Leverage and newsletters to be a helpful source for your patients and build your patient-first healthcare brand! Concluding thoughts These three practical uses of eligibility verification all center on patient payments. Efficient and profitable medical practices aim to collect these types of patient payments as early in the payment cycle as possible. Think about which of these you can collect before services are rendered and implement plans to make those approaches a priority in your practice.

6 6 A note from the PracticeSuite team Collecting patient payments is an art and science. As you look to ways to improve your practice s revenue and efficiencies, don t overlook the power of the eligibility checking process. Gone are the days of having staff spend hours navigating telephone automation mazes trying to get information about a patient s coverage. Today, you can leverage automated processes to check eligibility before a patient arrives at your practice. Your technology platform should be providing you with eligibility information directly from the payers. If you are unsure what information is available, please call us at Also, we strongly encourage creating a culture of routine staff training and development. You d be surprised how much progress your practice will gain through 20-minute trainings once a month on topics like eligibility. We hope this resource has been valuable. If you have not joined the PracticeSuite community, we invite you do so. 60 Days Free Eligibility Sign up for the Free PracticeSuite Basic edition and get 60 days of unlimited eligibility verification for $0.