This article previously appeared on the Ontario Systems Blog and is republished here with permission.
A recent CDC publication states 39% of Americans between the ages of 18-64 in 2016 were enrolled in High Deductible Health Plans (HDHP), up from 26% in 2011. This 13% increase means a larger percentage of a provider’s patient accounts now require them to collect the deductible and/or co-insurance amount from the patient. That has been a significant increase to handle in a short five-year timeframe, and when combined with reimbursement reductions, the two have put providers in a position where adding headcount to handle the volumes is not an option.
As a result, managing self-pay has become an even more important task, one in which providers traditionally have not had much focus on over the past 10 years. Applying traditional insurance follow-up methodologies, like working larger accounts first, is inaccurate and can be counterproductive. A solid segmentation strategy, on the other hand, can fill in gaps using key scrub processes supported with quality reporting. Below are three key disciplines you can review to help improve your self-pay management process, improving patient collections:
- Develop a solid segmentation strategy: With a sizable increase in self-pay accounts to collect, combined with lower reimbursements, margins are too thin for staff to work every account. A segmentation strategy that identifies who can pay and who should be reviewed for financial assistance is key. By using outside key data elements, you can ensure accounts are segmented into the right tiers for follow-up. Based on this tiering, a custom contact strategy should be deployed to help patients deal with their self-pay balances. This enables you to focus your limited resources on the most effective accounts and drive others through your financial assistance process.
- Identify missing insurance: Registration processes are not perfect. Important information can be missed, and sometimes patients omit valid information. Use outside data services to scrub accounts and identify missing insurance information. This can impact 1-3% of your self-pay accounts – A valuable reduction in bad debt expense. Use this process at several points in your revenue cycle to ensure you catch these accounts as soon as possible. By focusing on this discipline, you can file missing insurance faster, and reduce both days in AR and the number of accounts written off to bad debt.
- Detailed self-pay reporting: It is critical to have reporting in place that reviews your tiers’ performance along with other KPIs so you can update your strategy accordingly. Accurate knowledge of demographic changes and the ability to trend this data while comparing performance week over week, month over month, and year over year is key. Make these reports actionable to monitor your self-pay process and adapt to changes quickly.
Self-pay management is an important part of the revenue cycle, but to many providers it is a relatively new process they have tackled. Developing a segmentation strategy, identifying missing insurance, and reviewing actionable detailed reporting are the key disciplines you need to improve your self-pay management process. By performing these functions, you will improve cash recoveries and days in AR.