up-front collections and today’s top collections technologies

EXPERIENCEV

ALU

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RESULTSUp-Front Collections and Today’s

Top Collections Technologies

The Technologies that are Transforming Up-Front Collections in Access Management

October XX, 2011

Learn the real costs of up-front collection avoidance Learn how to move the collections process from

customer disaster to customer service Learn the key collections technologies and the

application integration required to develop a comprehensive “collections management system”

Learning Objectives

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The out-of-pocket (self-pay) share of health care costs has increased significantly for patient in recent years

The cost-to-collect has also risen sharply as self-pay dollars have increased:

It is less costly for healthcare organizations to collect self pay dollars prior to service, at the point of service or at discharge.

If self pay dollars are not collected at the point of service or discharge, the cost-to-collect can be 4.75% - 10% of the balance.

The Cost of Collection Avoidance

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Failure to collect “self pay” dollars reduces your ability to improve services or invest in new programs to meet community needs.

Research has shown:

Most patients (68%) prefer to know about their financial obligations at or prior to discharge.

Over one-third want to know about financial obligations prior to admission.

Uncertainty and confusion about financial obligations are a frequent source of customer dissatisfaction.

The Cost of Collection Avoidance

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Patients may know very little detail about their health coverage. This is particularly true for healthy patients who haven’t had to use their coverage.

Patients often have 2 expectations that can lead to anger and dissatisfaction when they are not met:

1st Expectation: Having insurance means they are “covered” and won’t have to pay (much!)

2nd Expectation: Doctors and other providers have checked for coverage before referring them to healthcare organizations.

Setting Expectations Is Customer Service

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Uncertainty and confusion about financial obligations are a frequent source of customer dissatisfaction. This uncertainty can cause confusion between:

The healthcare organization and the doctor

The patient and the doctor

The patient and the healthcare organization

Effective healthcare organizations understand that communication is the key to decreasing this confusion and improving customer relations.


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When does a patient’s responsibility for payment begin?

A patient’s responsibility for payment begins on the date that services are rendered. Successful organizations establish this expectation during the registration process before services are delivered.


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Let Patients Know that Payment is Expected! While this may seem to be an obvious point, far too many healthcare

organizations begin the care process without letting patients know how or when they expect to be paid.

Organizations that are effective in up-front collections manage patient’s expectations by:

Notifying patients that payment is expected when services are delivered

Explaining uncovered amounts to patients before services are delivered

Asking for remaining balances and uncovered amounts


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Up-Front Collections Today:

Ideally moves all appropriate patient collections from the back-end (Patient Accounts) to the front-end (Patient Access Services) of the Patient Financial Services customer service cycle.

Solidifies our commitment to customer satisfaction, service excellence and performance improvement.

Reflects a practical way for us to demonstrate our organizations values in action.


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Demonstrate Your Values: Let Patients Know that Payment Options are Available! Most organizations want to provide services to every patient.

While payment is expected at the time of service, financial assistance is available in the form of:

Payment deposits with payment plan arrangements

Discounted services based upon ability to pay

Payment assistance via government or other sponsored programs


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Pre-service is the best time to communicate to the patient his or her financial responsibilities. This is the time to let insured patients know if there is a deductible, co-payment or co-insurance amount required and to discuss your facilities expectations for payment of services rendered.

This advance communication with the patient helps alleviate possible future misunderstandings when payment is later expected from the patient, and also helps expedite payment to your facility. It can also help east the patient’s anxiety regarding financial issues associated with healthcare services by enabling you to……

Setting Expectations

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Inform patients up-front of non-covered services and charges. Let them know that they will be obliged to pay these charges if they choose to go forward with the services.

Request the full amounts that the patient is obligated to pay when requesting payment.


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Uninsured patients may be responsible for the entire bill. Whether the patient is insured or uninsured, we begin setting expectations by informing the patient of the self-pay portion of our charges so they understand their responsibility for payment.

Effective organizations establish financial policies to address these collection situations.


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Financial Policies

Financial Practices policies of healthcare organizations should clearly state that:

Payment is expected on the date of service

Emergency care will be provided without regard to a patient’s ability to pay and

Financial assistance is available for those who cannot afford services


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In the current healthcare environment providers constantly look for ways to enhance revenue and reduce cost. As the patient out-of-pocket portion of health care costs has increased significantly in recent years, provider bad debt has also risen sharply.

A New Day

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Today, more healthcare organizations recognize that an effective up-front collections program is an important way to reduce those costs.

While new technologies have emerged to facilitate this effort, leading organizations are increasingly learning that the thoughtful integration of these technologies can be a key driver of collection efficiency and customer satisfaction.

A New Day

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Healthcare organizations are using a plethora of collections technologies to reduce costs and improve service delivery. When implemented as stand-alone applications, these organizations are realizing impressive results. However, when implemented as components of a thoughtful “collection management system”, the overall results can be greater than the sum of the individual parts.

A New Day

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Applications have evolved along a fairly predicable path

While progress has occurred at every level,

transformation of work processes has been elusive

Transformed Level 4 (Integration leveraged between all applications)

Integrated Level (Integration improves with ADT Application

Batched Level (Some Batch and Direct Processing)

Niche Application Level (Application Silos are formed)

Application Evolution

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Standard Front-End Application EvolutionD

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First Generation (Niche Apps) 2nd Generation (Web-based Apps)Features: Systems interface with ADT systems via direct connections. Benefits loaded directly to ADT benefit screens or COLD fed to document imaging systems. Issues: Only 5 – 10 major payers per region and payers control level of benefit detail. Much phone verification is still necessary.

Features: Varied level of benefit detail. Connectivity without IT setup. Issues: Availability payer dependent. Multiple sign-ons needed to access multiple websites. No standard benefit format. No interfaces exist to hospital ADT systems so duplicate data entry necessary into ADT systems.

3rd Generation (Integrated)

Features: Some vendors begin to offer returned mail analysis. Issues: Expensive and inefficient. Much rework needed. Otherwise,done manually via patient ID, Haines Directory or “Department of Corrections” returns

Features: Desktop address verification now available via US Postal Service connections. Issues: User dependent, no ADT system integration – users not required to look up addresses. Users not required to update ADT systems.

Features: USPS and Lexis-Nexis validation available. Integration with ADT systems available as well as alerts that discrepancies exist. Phone number validation now available.Issues: Too many organization still using batch verification after the registration encounter.

Features: Hospitals self-develop patient-pay calculors based on charge master or DRG. Issues: No integration with existing contracts caused over-collection issues and refunds. Collection limited to self-pay deposits and co-pays.

Features: Web-based patient pay calculators now available for some services.

Issues: No integration with hospital ADT systems.

Features: HIPAA X12 benefits available real-time. Integration with contract management systems to provide accurate calculations. Ability to direct collect from calculation in real-time.Issues: Too few organizations integrating contract or charge master information

Features: Manual administration of policy by “specialist” counselors using personal judgment. Issues: No integration with existing systems. Status cumbersome to determine both for patients and hospital stakeholders

Features: Financial counseling programs now automated. Registrars can refer patients electronically. Counselors work from referral worklists.Issues: No referral rules in place. Referral at registrar discretion. Prone to audit fairness issues

Features: Assistance applications pre-completed from ADT information. Referrals are rule-based. Authorizations are rule-based

Issues: Too few organizations are aware of current capabilities. Not demanding integration.

Features: Free-standing systems available with hospital-defined edits.

Issues: Poor implementation due to PFS-only focus on quality. No integration to ADT systems for edits of updates.

Features: Ability to update systems based upon user-defined rules.

Issues: Lack of comprehensive quality policies lead to poor application ROI.

Features: Uses X12 eligibility transactions as component of edit variance processes. Analyses forms and data via imaging system integration.

Issues: Too few organizations are aware of current capabilities. Not demanding integration

Features: HIPAA X12 demographics available as well as USPS connections. Integration with ADT systems available as well as alerts that discrepancies exist. More payers available.Issues: Too few organizations demanding 270 or 271 eligiblity transactions.

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1. Contact Verification2. Eligibility Verification3. Payment Estimation 4. Communication Management5. Propensity-to-Pay Scoring6. E-Cashiering7. Financial Assistance Automation8. Rule based Document Imaging9. Self-Service Kiosks 10. Rule-based Process Automation

Top Collections Technologies

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Contact Verification


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Benefits Improves billing and

statement delivery, thus increasing cash flow

May detect multiple identities or possible fraud - including the identification of social security numbers for deceased persons

Increases staff productivity Optional batch features

often offered (as options)


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The Old Approach Focus on address verification only Batch address checking done after the fact

Features To Look For Now: Phone Number Integration

Verify non-traditional phone numbers e.g., wireless, non-listed

ADT / Practice Management System IntegrationSystem highlights real-time discrepancies between

verification and host system System allows user to accept or reject changes after real-

time discussion with patient


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Eligibility Verification


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Benefits Verify coverage benefits prior to service delivery Submit patient information and receive real-time coverage

response Reduce or eliminate timely telephonic verification Reduce or eliminate cumbersome website verification Increase upfront collections Reduce rejections and denials Increase efficiency and staff productivity (reduce data entry) Improve patient satisfaction


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The Old Approach Proprietary, payer-specific eligibility formats Un-integrated website and telephonic verification prevalent

Features To Look For Now: Normalized Benefit Formats

Ability to design “standard” and “detailed” benefit screens ADT / Practice Management System Integration

Eligibility and benefit information is mapped in X12 and HL7 formats to ADT application

Ability to send real-time HIPAA 270 eligibility transactions and receive 271 responses


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Patient Payment

Estimation

Payment Estimation

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Benefits Reduce bad debt Increase collections Accelerate payments Cut costs for patient collections Ensure payment accuracy Increase payment certainty

Payment Estimation

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The Old Approach Collection of co-payments and self-pay deposits only “Guestimates” rather than estimates

Features To Look For Now: Charge Master/Eligibility System Integration

Ability to apply benefits to real charges Charge Master/Contract Management Integration

Ability to apply contractual allowances before developing estimates

Payment Estimation

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Communication

Management

Communication Management

Benefits Increase productivity Reduce denials Increase successful appeals


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The Old Approach No electronic record of payer communications

Features To Look For Now: Call Management

Automated calls, monitored calls, PC calls Fax Management

Inbound and outbound faxed documents Web & Electronic Image Management

Web-eligibility, e-mail, other electronic documents


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Propensity to Pay Scoring


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Benefits Streamline self-pay

approvals Limit unnecessary

outsourcing Identify risky elective

encounters Proactively identify

financial assistance candidates


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The Old Approach Subjective approvals by financial counseling staff Understated charity care on financial reports

Features To Look For Now: Self-pay Funding Sources

Available credit on credit cards Lines of credit and home equity External finance solutions offered by banks and other lenders.

Segmentation AnalysisCustomize scoring profiles to community characteristics

Workflow ManagementElectronically forward accounts to financial counseling

process


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Electronic Cashiering


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Benefits Accelerates and increases collections Increases speed of payment capture Saves time by automating manual payment posting Increases staff efficiency by enabling more employees to accept

payments Improves customer service leading to enhanced customer

satisfaction Provides dashboard reporting of payment activity (ability to

track, audit and control all customer payments)


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The Old Approach Payments collected at only at time of service Reconciliation manual and cumbersome

Features To Look For Now: Accept payments real-time from any location

Any user desktopPatient payment web-portals

Accept all forms of electronic paymentCredit card, debit card, e-check, ACH transactions

Cash Posting and ManagementAudit, track and control paymentsUser/Department collection efficiency reporting


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Financial Assistance Automation


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Benefits Proactively identify eligibility to

entitlement programs Reduce unnecessary outsourcing

to self-pay vendors Improve charity/bad debt

classification Improve customer service and

community benefit reporting


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The Old Approach Manual application and subjective approval processes Reconciliation manual and cumbersome

Features To Look For Now: Pre-populate applications from ADT information

Medicaid applicationsFinancial assistance applications

*Integration with propensity-to-pay systems and e-pay systemsPre-define payment plans

Presumptive eligibility and approvalsAutomate financial assistance rules and workflows


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Rule-Based Document Imaging

Rule-based Document Imaging

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Benefits Reduce unnecessary

copying and scanning costs Reduce denials related to

missing referral/authorization forms

Improve customer service


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The Old Approach Repetitive copying and scanning of same documents

Features To Look For Now: Rule-based Scanning

Prompt users to scan required documentsDrive prompts by document type, last date scanned, etc.

Optical Character Recognition MappingCompare insurance card information to ADT system fields

and correct data entry errors


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Seated Kiosk

Patient Self-Service Kiosks

Self-Service Kiosks

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Benefits Reduced staffing Reduced check-in time Improved cash flow and

collections Reduced errors Improved customer service

Self-Service Kiosks

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The Old Approach Staff check-in areas with increasing

FTEs Inconsistent collection compliance

Features To Look For Now: Date/time stamping of arrival Automated printing, armband generation Real-time payment processing Real-time eligibility verification Debit and Credit Card Processing Electronic signature capture

Self-Service Kiosks

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Communication

ManagementEligibility

Verification

Payment Estimation Propensity to

Pay ScoringRule-Based

Process Automation




Self-Service Kiosks

Rule-based Process Automation

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Benefits Transformation of workflow Technology acceleration Vastly increased efficiency Expanded financial counseling Improved cash flow and

collections Improved customer service Eliminate whole categories or

errors


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The Old Approach Each application functions as a silo Information is copied or re-keyed into other systems

Features To Look For Now: Full integration between all applications Ability to use multiple integration modes, HL7, scripting Ability to display scripts or registrar guidance Ability to build “action rules”- rules that execute actions based

on data from other applications – without registrar intervention or prompts


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Transformational Performance

+ =+Technology Accelerators

Collections Mgmt. System Vision

The Formula for Transformation

Integration Between all Applications

The New Math

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This presentation has demonstrated that a number of exciting collection technologies have evolved over the last few years and they are already lowering costs and improving services.

Conclusion


Communication


Verification



Process Automation




Self-Service Kiosks

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However, organizations that hope to move beyond the incremental evolution of the first three generations of applications to the transformation of the fourth generation will need the vision to see the possibilities that now exist and technology accelerators to integrate disparate solutions into the seamless integrated “collections management system” that we have all been waiting for.

Contact Verificatio

n

Communication


Verification



Process Automation




Self-Service Kiosks

Conclusion

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In this session, we learned: The real costs of up-front collection avoidance How to move the collections process from customer

disaster to customer service The key collections technologies and the

application integration required to develop a comprehensive “collections management system”

Summary

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Questions

Conclusion

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John Thompson, PMP, CHAMSenior Consulting Manager

3 Christy Drive, Suite 100Chadds Ford, PA 19317

(484) 798-5707 (cell)(484)-840-1984 (office)

Toll Free: 866-840-0151

www.ima-consulting.com

Contact Information

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up-front collections and today’s top collections technologies

Documents

patients expectations

patients responsibility

notifying patients

healthy patients

customer servicelearn

customer disaster

customer relations

point of service