Bird Blitch CEO,
Patientco, Atlanta, GA
Beginning a few years ago, the healthcare industry began shifting the financial responsibility of care from the payer to the patient. By now you are probably familiar with high deductible or consumer-driven health plans and how they are increasing the amount of patient revenue you must collect. This trend will only continue over the next couple years.
Processing patient revenue is a task that involves multiple inputs and sometimes multiple vendors at different parts of the process. Besides the payment processing itself, which includes the physical terminals, virtual gateways, banks and credit card consortiums in some way or another, the healthcare provider must also consider payments made at different times and amounts during care process and in different payment methods. Uniquely to healthcare, providers are usually not able to require payment in full at the point of service so payment(s) must be arranged with the patient before, during and after care in cooperation with the patient’s insurance.
This article will outline the different challenges associated with accepting payments at the point of service (POS) and will suggest areas you can evaluate for improvement.
Opportunity at the Point of Service
Much has been said about reorganizing the patient revenue cycle process that takes place after insurance adjunction, specifically confusing bills, online payment options, offering payment plans and financing options to address the challenges of collecting patient revenue. Providers are right to evaluate and upgrade their revenue cycle technology and billing systems to meet these challenges.
One of the lesser-targeted areas for revenue improvement is processing and collecting dollars at the point of service. With the technology available to give patients accurate estimations and determine financial-aid eligibility upfront, more and more providers now have the ability to request an upfront payment at the time of service. However, a recent Transunion study shows that 70 percent of providers collect less than 30 percent of out-of-pocket costs at the point of service.1
The challenges of requesting and accepting these payments mostly stem from a status quo that until recently was not problematic. But in this new model of payment for care, providers must address the staff, process and technology-related obstacles or risk losing valuable patient revenue in the future.
While your staff may be courteous and competent at the POS, revenue challenges can still occur if you don’t implement the right culture to accompany improvements in process and technology. As the first and final human contact during an episode of care, your front-office staff has an opportunity to frame the encounter in terms of financial responsibility from scheduling to checkout.
Under the old system, a staffer’s only financial-related task was to confirm insurance coverage and collect a copayment, if necessary. Because only a small percentage of revenue was at stake, little importance was placed on collecting payment upfront or upon discharge, especially at small practices.
Now, with close to 30 percent of revenue coming from out-of-pocket responsibility, determining coverage is just the first step in a list of must-dos at patient access. Staffers checking patients in can, and should, make every effort to determine a patient’s out-of-pocket responsibility at check-in (as well as eligibility for financial aid) and make a reasonable attempt to collect that money at the time of service.
Collecting larger payments upfront requires additional staff time to handle issues related to processing these payments. One example is dealing with chargebacks, which are more likely to occur on payments of greater amounts. Chargebacks can cost money and require a staff member to work with the patient and/or vendor to resolve the issue.
Accepting upfront payments changes the patient check-in process and must be staffed accordingly.
Shifting your collections strategy to add emphasis to the POS presents more than just culture challenges. The technology required to process payments at the point of service may be inadequate for several reasons:
Interoperability: while you may be able to physically accept cash or check payments from the patient at the POS, without the right software infrastructure you may find yourself succumbing to hours of paperwork involved in logging and posting transactions. Additionally, patients who make payments after the POS may become frustrated if their balance hasn’t updated by the time they make the payment. Without integrated software, accepting payments upfront may not be worth the time required.
Hardware: having integrated hardware is a key step to accepting credit card payments. With the recent shift in liability for merchants who don’t use updated EMV-enabled terminals,2 now is the time to upgrade to hardware that connects to your payments platform and is EMV-enabled.
Payment Processing: providers who accept payments at the POS must find a way to efficiently accept multiple payment methods including health savings accounts/flexible spending accounts and cash and consolidate and deposit these payments into their bank account with proper attribution. For providers who previously collected only small amounts of money such as copays, this can be an expected challenge. Finding a payment processor can be costly if not handled correctly, and sometimes require multiple vendors and contracts. Processing contracts tend to be complicated beneath the surface so review yours with extra scrutiny.
A Roadmap for Revenue Success at the Point of Service
An efficiently run provider business office weaves together people, process and technology in a way that removes obstacles to payment and delivers a superior customer experience. Below is a set of suggestions related to each category you can use to evaluate your current POS payments solution and make the appropriate changes, if necessary.
The most important part of your patient payment process is your people; both your staff and your patients. Therefore, your updated check-in discharge process should embrace frequent and empathetic communication of your financial policies at every appropriate opportunity. Align all patient communications (online, posted in office, verbal and written communication, etc.) so that your patients understand their financial obligations as well as their opportunities for financial aid and their options for payment.
Clear, consistent communication is the most important step to avoid patient confusion after the episode of care…when patients are less likely to fulfill their obligation.
While your check-in/check-out process depends on your size and segment of healthcare, certain principles remain the same. The objective is to make the check-in/check-out process fast and convenient for both the patient and staff member assisting. Look at your reports and interview your administrators to staff the appropriate amount of people for a given time slot. Ask your staff where their pain points are and refer to patient feedback to determine which, if any, areas can improve.
Your financial policies should reflect the needs of your patients as well as your segment of healthcare and your classification as for-profit or non-profit. Make sure your business rules align with your technology, so that if a patient opts for a payment plan or financing, that you are able to implement this in a convenient manner.
To address the technology challenges mentioned earlier, the first step you should take is to evaluate your current business office technology solutions independently and in context. What this means is while one application may handle scheduling particularly well, it may be problematic if that application is used to process payments independent of your other payments solution(s). Ideally, you want to be able to tie any transactions to the patient automatically when that patient is going through the check-in process; this can only be done with properly integrated software.
Your processing terminals should also integrate with your payments platform and be EMV-compliant. By integrating your terminal with your payments software, your swiped credit card payments and manually entered payments end up in the same place, saving administration from having to manually consolidate and reconcile payments. This enables a single bank deposit from a single source every day, which can prevent money from being misplaced.
For practice groups and health systems, consider your current credit card terminals. Do you pay a monthly fee to rent units? Are your terminals connected but also payment card industry (PCI) compliant?3 Are you required to make a separate deposit for each terminal? What about each credit card type? These are important questions to consider when choosing hardware to process credit cards and other payment types.
When selecting a processing partner, be wary of upfront reserves or contracts that reserve the right to adjust the interchange rates at any time. For processes upwards of a million dollars per year, a fluctuation in rates can affect revenue by tens of thousands of dollars. You may consider a fixed rate solution for the sake of stability. As always, PCI-compliance is a must. Is your processing partner(s) experienced in healthcare and the additional risks of connecting patient financial data with healthcare data? In this case, HIPAA-compliant partners are important because most payment processors simply stick to PCI.
Once you have assessed your needs and implemented any changes, don’t forget to compare your new process to your old one. Revisit any changes you make from the holistic perspective of the staff user or the patient. Is making a payment during check-in or check-out fast and convenient for the patient and the staff user? If so, then you have accomplished your mission.
- TransUnion Healthcare Report Finds Both Patients and Hospital Administrators Feeling the Squeeze of Increased Costs, http://newsroom.transunion.com/transunion-healthcare-report-finds-both-patients-and-hospital-administrators-feeling-the-squeeze-of-increased-costs
- EMV is a technical standard for smart payment cards and for payment terminals and automated teller machines that can accept them, https://en.wikipedia.org/wiki/EMV
- The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements designed to ensure that ALL companies that process, store or transmit credit card information maintain a secure environment. Essentially any merchant that has a Merchant ID (MID). https://www.pcicomplianceguide.org/pci-faqs-2/#1