For Success in Collections: Don't Under Invest

For Success in Collections: Don't Under Invest

By Ted Matthews, MBA, CPA, CGMA, CFO, Austin Regional Clinic

Ted Matthews, MBA, CPA, CGMA, CFO, Austin Regional Clinic

The patient experience has never received as much attention in healthcare as it has today. In a world where individuals are empowered with information—from review sites to social media networks—and a vast number of choices—primary care, urgent care, telemedicine, virtual visits, even house calls—it’s no wonder healthcare executives pay close attention and invest big dollars to improve patient experience.

"Developing a focused collection strategy will reduce costs and maximize results, but only if you invest appropriately"

While the “front end” tends to be more closely scrutinized, from check-in to waiting room times and actual care delivery, often overlooked are “backend” functions—especially billing. Yet, it all affects whether a patient returns.

The other obvious reason for scrutinizing collections is the sheer amount of that revenue and the cost of collecting it. Here is an example: in my organization, a large primary and specialty care medical group based in Austin, Texas,serving nearly a half a million people, patient collections account for 20 percent of all income. Needless to say, it’s a revenue source we cannot afford to ignore. However, it yields lower average revenue per patient since many are just the copay or deductible portion of an insured claim. The individual nature of these accounts makes them time and resource intensive to chase.

Bottomline: developing a focused collection strategy will reduce costs and maximize results, but only if you invest (time and, yes, money) appropriately.

Key Tips for Success

Unique to medical care (and not a point to be proud of) is the complicated nature of payments. Co-payments may be straightforward, but the whole patientbalance (based on what individuals’ particular health insurance covers) is not. Payment maybe made at the time of the visit, after a follow-up statementor both – or neither. If the statement gets lost or ignored, it could become “bad debt” (which, for us, is a past due payment exceeding sixmonths). This can become very expensive to collect, especially through third party collection agencies.

Some aspects of these patient collections are particular only to healthcare, but the lessons for success are applicable across any industry where individual collections are a function. They are often learned the hard way, even in our organization: increasing patient billing complaints, a high employee-turnover rate in the billing office, and lost potential collections. Patient complaints were a particular concern for us. Losing one visit of revenue is bad; losing a valued customer is worse.

We managed collections internally, then relied on a third-party vendor, ultimately to bring it in-house again, but with a clear improvement strategy and a consensus to resource it to be successful. And it has been.

We can point to the successes that helped achieve improved collections. Three important themes prevailed: One-Call Resolution, Empathy, and Technology.

One-Call Resolution to End the Ping Pong Game

Imagine calling a company with a question, then being connected (and put on hold) with two or three other people before having your question answered, partially, many minutes or maybe hours later. It is customer service Ping Pong — and it doesn’t feel good on either end.

Implementing a one-call resolutionapproach eliminates phone tree fatigue, leading to a happier patient and a happier, more fulfilled, customer service member. It is a lot of work — in our own practice, we engaged in six months of customer service and technical training to ensure the billing team could answer nearly all questions that came up or have the right resources at its fingertips.

That means changing protocols,so representatives can access the right people quickly to complete the call. This in-depth training led to an additional benefit — less turnover. Instead of being stuck with the boring and unsatisfying work of triage, billing staff are empowered with information and resourced to resolve a problem. Lower turnover allows training to be an investment and not a sunk cost.

Empathy for People Business

In the shuffle of life, a bill can get lost. This is often what we found in our research to reduce bad debt.Patients usually intended to pay their bill — they simplydidn’t know there was a bill outstanding, nevergot an answer toa question regarding their bill or didn’t know they had payment options such as payment plans.

Empathy isn’t the first word that usually comes to mind when embarking on collectionsimprovement, but it should be. Helping patients with their bills isn’t just about getting paid, it’s about cementing customer relationships for the long term. A “hard approach” should be a last resort, because that customer then goes somewhere else. Instead of hounding patients about an outstanding balance, we carefully talk and listen to the customer with a goal of improving their understanding of their bill. The results have been improved collections and customer relations.

Technology to EnableSelf-Service

Like the saying goes, you can’t go cheap and win. For instance, implementing more online options for invoicing and payments is a costly endeavor, but it pays off. Our organization in just six months went from zero to 24 percent of payments coming in online. Patients see it as a convenience, less staff time is needed, and you can simultaneously use the online platform for communications and marketing, letting the patient have greater control of their account.

Improving collections will boost company performance, but a successful collections strategy requires resources such as time, people and technology. Look at it not as a cost, but as an investment.

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