This article previously appeared on the Ontario Systems blog and is republished here with permission.
The Scottsdale sun shined brightly on PowerUp 2017 last month. Specialty tracks, dynamic speakers and record setting attendance made our annual receivables education event one of the hottest conferences in the county. In addition to soaking up the sun, healthcare track attendees were keenly interested in absorbing every bit of information available about their market segment. This blog highlights some of the hottest topics.
Revenue Cycle Economics – A robust discussion of the market pressures impacting the revenue cycle kicked off a hard-hitting session on compliance. Although the healthcare industry represents a $3 trillion segment of the U.S. economy, all is not bright for those who manage the revenue cycle. During the compliance hot topics session, attendees learned, according to a 2017 study of consumer trends by TransUnion Healthcare, the percentage of consumers not paying their total hospital bills will increase to 95 percent by 2020. To make matters worse, the percentage of patients who are even making partial payments toward their hospital bills is decreasing dramatically from 89-90 percent in 2015-2016 to 77 percent in 2016. If accurate, this scenario suggests bad debt will be on the rise.
Attendees agreed that higher deductibles, and an increasing number of patient self-pay accounts, are causing a decrease in patient payments available to cover funding for medically necessary services. In response, with millions of dollars in unpaid medical debt left uncollected, providers are beginning to implement new processes to prevent revenue leakage while also providing a better patient experience. For example, providers are employing new technology tools and hiring collection agency partners who specialize in healthcare collections to achieve higher liquidation rates and ensure a positive patient experience.
Compliance attendees also learned that with the rise in self-pay accounts comes a greater need to address patient payment preferences. TransUnion Healthcare reports analysis on payment patterns between 2014 and 2016, including:
- 63 percent of hospital bills were $500 or less; of those hospital bills, 68 percent were not paid in full in 2016.
- 14 percent of hospital bills were $3,000 or more; of those hospital bills, 99 percent were not paid in full in 2016.
- 10 percent of hospital bills were $500 to $1,000; of those bills, 85 percent were not paid in full in 2016.
These trends underscore the need for providers to not only understand patient payment preferences but to employ the technologies required to process a growing number of ways to move money via the IVR, website, the ACH network and mobile apps.
Revenue Cycle Compliance Hot Topics – Using the discussion about an unpredictable, evolving and consumer-driven healthcare marketplace as a foundation, compliance hot topics took center stage. Compliance hot topics for healthcare providers included an update on Telephone Consumer Protection Act (TCPA) compliance developments; a primer on electronic consent requirements; a walkthrough of electronic payment processing requirements and breaking news about the first-party service provider relationships. Session highlights included:
TCPA – TCPA lawsuits against healthcare providers continue to rise. Apparent confusion over patient consent and revocation requirements plague providers and their receivables management partners. During the session, special emphasis was placed on a recent case which examined a new theory of contract law. In Reyes, Jr. v. Lincoln Automotive Financial Services, Case No. 15-0560, (Eastern District of New York, June 20, 2016) the second Circuit affirmed the lower court’s judgment in favor of the defendant and decided the TCPA does not permit a consumer to revoke its consent when that consent was part of a bargained‐for exchange. This case is on appeal and is one to watch.
This Court’s ruling creates a tremendous opportunity for healthcare providers and their first- and third-party collection agencies. If this decision is upheld, providers should be able to update their admission agreements with patients to include mutually bargained for consent and revocation requirements.
This session closed with six TCPA tips for healthcare providers:
- TCPA requirements apply to both autodialed calls to cells and prerecorded messages.
- Patient consent cannot be granted by friends, family, etc.
- Admission documents are powerful, valuable tools to gather consent.
- Cell numbers obtained through skip tracing can never be autodialed.
- Text messages are calls under the TCPA.
- Manual calls, as that term is technically defined, are always permitted [with or without consent].
Electronic Consent Requirements – The Electronic Signatures in Global and National Commerce Act (E-Sign) has arguably created as much confusion about electronic documents and communication as it has provided clarity. The purpose of the act is twofold.
First, it clarifies digital documents and signatures, properly created, will substitute for paper and wet signatures. Not a difficult concept to explain or understand.
Second, the act seeks to protect the technology-challenged consumer. Specifically, E-Sign tells us when a rule, law or regulation requires one party, to send or provide another party with disclosures, documents or information, the sending party must obtain a unique type of consent from the receiving party before relying on E-Sign to legitimize the delivery of the disclosures, documents or information. Session attendees were encouraged to study the requirements for E-Sign Consent if they are interested in using digital communication tools as a means to provide consumers with disclosures, documents or information such as validation notices, preauthorized or recurring electronic funds transfer payment arrangements, or postdated payment letters.
Electronic Payment Processing – Traditionally, healthcare organizations have been slow to adopt multichannel forms of payment. Even today, personal checks and credit card payments remain the top two forms of payment that healthcare providers require their patients to use. But patients are demanding change, and in turn expect their healthcare providers to embrace their payment preferences. Like any other patient or guarantor of a product or service, patients prefer electronic payments over any other form.
Electronic payments can be made in several ways: website, live operator, voice track recordings, interactive voice response (IVR), and smart phone app. Electronic payments can also come in various forms: single and recurring credit card payments, single and recurring ACH payments, single and recurring debit payments, and electronic checks, to name a few. Healthcare providers are well advised to consider:
- Patients and guarantors expect to make payments using a variety of options.
- A thorough understanding of the legal terminology associated with electronic payments is essential.
- Each type of electronic payment is associated with unique compliance requirements.
- The use of preset scripts can reduce regulatory risk.
First-Party Service Relationships – Revenue cycle professionals like the first-party model: It maximizes their control over the collection agency. Debt collectors like the first-party model: It insulates them from liability under the Fair Debt Collection Practices Act. Arguably, patients like the first-party model because they effectively communicate directly with the party to which they owe money. But recently the first-party business collections model has drawn the scrutiny of the consumer bar. Lawsuits against collection agencies and their outsourcing partners abound. This is largely due to a dearth of information about the attributes of the legal structure of a legitimate first-party outsourcing relationship. During this session, the attendees examined a series of cases to learn just how far one must go to establish its employees as the de facto or functional equivalents of the creditors’ employees.
Special Thanks to all of you who attended Power Up 2017 and participated in the healthcare track sessions. Mark your calendars for PowerUp 2018, October 15-17 in Indianapolis. In the meantime, please follow me on Twitter, and on LinkedIn for more information about these and other timely compliance topics.
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