Demystifying Self-Pay Collection Strategies Leveraging Analytics
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REVENUE CYCLE NEWS
A Healthcare Financial Performance, Revenue Cycle Optimization and Healthcare Industry Trends Resource
by Phil C. Solomon on November 15, 2012
in Collecting self pay deductibles and co pays , Self Pay Collections
Macroeconomic pressure has escalated the focus and importance for healthcare financial executives to review the overall financial functionality of their health systems. Significant increases in operational costs combined with our current economic climate have created the need for infusing greater efficiencies into the traditional revenue cycle operating framework. It is imperative that a balanced approach is utilized to manage a complex payer system, the emerging impact of the self-pay population and the health systems own human capital. Healthcare financial executives must oversee and maintain a system, which delivers quality care, while maintaining the highest standards in order to comply with dynamic financial and regulatory reform.
A key area of focus for Health Care providers is the cataclysmic rise of the patient pay population. Revenue cycle financial executives are searching for tangible answers to the escalating dilemma of increasing self-pay account volumes and how to cost efficiently identify and process charity programs. This is a daunting task as many facilities self-pay volumes have doubled in the past 12 to 24 months. All indications lead towards future increases of epic proportions.
The activator of this transformation is the difficult economic conditions we are currently experiencing which have resulted in a significant growth in the number of uninsured, under insured, the increasing popularity of consumer-directed health plans with high deductibles as well as high-income patients willing to “roll the dice” and take a risk of not carrying insurance at all. Healthcare systems are finding themselves exploring collection options to mitigate the shift in this payer class.
The leading practice approach leverages a scientific approach to significantly increase collection performance and reduce operating costs of processing and collecting the self-pay and charity account segments. Creating a leading practice solution involves developing the most effective and efficient methods available to achieve this task.
What constitutes leading practice is determined through a process of benchmarking. All Health Care organizations can move toward achieving leading practices in the management of Self-Pay and Charity accounts through a commitment of continuous improvement and breaking from the norm. Improvement can be driven through internal resources, external outsourcing partners or as a strategy of combined efforts.
Self-Pay Analytics Platforms provide the foundation for performance improvement strategies. Performance is all about improving results and reducing costs using a wide variety of techniques, including technical resources, leading practice systems and most importantly, intellectual knowledge and management techniques.
In order to deliver superior performance, Revenue Cycle management executives must ensure their people are rewarded for being innovative and thinking “outside the box”, thereby driving cutting edge solutions at every touch point. One must scrutinize their technology, processes and procedures and make sure the entire team is working towards a goal of continual improvement.
The first step is identifying and analyzing the best leading practice Self-Pa y Analytics platform to build your strategy upon. Don’t be fooled by pretty marketing material. Make sure the self-pay analytics strategy and technology platform you choose encompasses the following:
Performance Management Make sure the approach focus on priorities and resources, which are currently available. There is no need to bring in numerous consultants to accomplish modeling and optimized workflows. First, you must establish your primary objectives and design performance measurements and processes (Key Performance Indicators) to support those objectives. We translate these strategies into deliverable and measured targets, reports and actionable processes.
Quality Assurance Next you must document those new processes and procedures, identifying inputs and outputs, key process elements, tracking, reporting, adherence to procedures and auditing.
Technology Systems Your Self-Pay Analytics Platform should provide prioritization and analytic techniques, which drive more effective management of charity and community benefit administration, billing and collections performance. Make sure your chosen self pay scoring model estimates household income and not guarantor income. Most models are built to estimate a guarantor’s income which does not match up with the Federal Poverty Guidelines income requirements.
Leading Edge Process Workflow Once the assessment is completed, an operational strategy is developed based on the inputs and goals of the organization. In general, optimizing self-pay performance requires focusing on the following:
– The segmentation of all self pay accounts based on ability of payment and propensity of payment – The identification of lower income patients who may qualify for charity care or financial assistance – The identification of possible demographic errors that result in non-deliverable mail, insurance denials and lower “right party” contact rates for outbound phone contacts – A primary and secondary scrubbing of all self-pay patient accounts for current and potential Medicaid and Medicare eligibility – A primary and secondary eligibility check all self-pay patient accounts for current and potential commercial insurance eligibility
Once the overall implementation strategy has been created, it is recommended that the self-pay modeling platform is able to accomplish segmentation as follows:
Correct ID and Address Potential Medicaid Potential Charity High Probability of Collection Medium Probability of Collection Low Probability of Collection Unlikely Probability of Collection Maximum Payment Indicator Red Flag Alerts
The leading practice process of analyzing self-pay patient accounts helps to maximize returns and improve patient satisfaction. Once the segmentation is completed, it is important to handle each segment with a strategy that produces the best return while maintaining the mission of the organization. The most advanced and advantageous solution includes the latest intelligence and scientific data to create a smarter, more productive and patient centric approach to the processing, treatment and collection of self-pay patient accounts.
The information and strategies contained in this document have been tested thoroughly and they have produced significant lifts in liquidation without negative patient backlash. In fact, patient satisfaction was increased while employing this approach.
For more in-depth information about revenue cycle process improvement, download the whitepaper titled “ 5 Key Strategies for Revenue Cycle Optimization .” For more information about self-pay modeling or segmentation strategies, contact me via email at phil@philcsolomon.com or follow me on Twitter @philcsolomon .
Tagged as: co pays and self pay cash , collecting deductibles , financial pressures on healthcare organizations , Healthcare finance , Healthcare Financial Counseling , HFMA MAP Keys , hospital financial counseling , hospital performance , Hospital's Ability to Collect Cash , hospital's revenue stream , identity theft , Phil C. Solomon , point of service collections , Red Flags calls for “creditors” to establish a program to protect patients from medical identity theft. , revenue cycle charity assessment , Self Pay Cash , Self Pay Collection , The Health Care Fraud Prevention & Enforcement Action Team (HEAT)
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Revenue Cycle News Review Credential MyDoc says: "This blog is written by Phil C. Solomon, a longtime healthcare finance and revenue cycle management professional who brings two decades of experience to his posts. Solomon’s blend of knowledge, passion, and executive experience in the industry means that he’s a go-to guru for interesting insights in the field.
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