In a recent survey of more than 130 hospital leaders conducted by Becker’s, healthcare providers indicated that their largest challenge to revenue earnings was patient financial responsibility.
“As many patients opt for High Deductible Health Plans (HDHPs) physicians are observing an increase in Patient responsibility balances.”
What is patient responsibility?
Responsibility for paying medical bills is apportioned between the patient receiving care, their insurance provider if they have one, and government payers like Medicare and Medicaid if the patient is eligible. The amount that falls to each party depends on several factors, and getting these calculations right is critical to the provider’s revenue cycle.
Simply put, patient responsibility is the portion of the medical bill that the patient is required to pay rather than their insurance provider. This poses a big challenge for health care providers as they become reliant on the patient for their revenue.
How is patient responsibility calculated?
• Co-payments – a fixed, flat fee the patient pays toward their medical care at the time of service. If providers do not have accurate co-pay information at the time of the visit, they may have to bill or refund the difference later.
• Deductibles – this is the total amount the patient pays toward medical care each year before the payer contributes. Health plans with high deductibles are attractive to patients who think they’ll be unlikely to need care, since these plans usually have lower premiums for patient responsibility.
• Coinsurance – this refers to the patient’s share of the remaining medical costs after their deductible has been paid.
• Out-of-pocket maximum – some health plans set an annual limit to the total amount a patient needs to pay toward care, including co-payments, deductibles, and coinsurance. Once that limit is reached, the payer will cover eligible expenses for the remainder of the period in question.
How can you ensure that you get reimbursed for the services provided?
It is often challenging to secure reimbursement from patients, but here are some best practices to follow to decrease this likelihood.
1. Simplify medical bills to help patients understand financial responsibility
Patients tend to find medical bills confusing, especially when they contain medical jargon. Bills are often unclear about what is owed, how to pay it, and when the balances are due.
To help patients navigate this, providers should clarify a patient’s financial responsibility within the medical bill, including how much is owed, how to pay, and what services are covered for patient responsibility.
2. Educate patients about financial responsibility and provide price transparency
Unfortunately for providers, many individuals are not aware of their financial responsibilities before visiting. They opt for high-deductible insurance plans because of lower premiums, but do not always understand the extent of their out-of-pocket expenses.
Providers need to train front-end staff to educate patients at the time of the visit about what their insurance covers and what they will owe. Staff should attempt to collect patient payments or create a plan while a patient is still in the office in order to not leave potential payment it pending.
3. Provide several payment options
This is the best way to win the trust of patients. Providing different options fosters goodwill between practice and patient. While enabling a patient to pay with their credit cards is a good option, you can even consider giving them an EMI option after taking their history into account. For instance, a patient who frequents your healthcare service is a strong candidate to be offered this.
4. Establish a credit card on file (CCOF) policy
Keeping a credit card on file can reduce AR days and ensure reimbursement for services provided. It can be valuable when collecting co-pays, deductibles and patient payments. However, the patient must be aware, and receipts of payment must be sent to them.
Sometimes, physicians ignore small payment amounts when there is a large claim balance pending. Over time every unpaid amount impacts on your accounts and revenue at the end of the year. If you find it challenging to manage a payments collection team, you can always outsource medical billing to a trusted partner. Learn more about safeguarding your financial objectives here to know more about patient responsibility.
