By Laurie Morgan, Capko & Morgan
As consultants, my colleagues and I are frequent presenters to physicians and practice administrators. It’s always interesting to see what topics draw the biggest turnout and generate the most questions. Sometimes we’re surprised when topics that we have presented continually still top the list of what attendees want to hear. One such subject is collecting from patients.
Over the past decade, collecting effectively from patients has steadily increased in importance as the proportion of healthcare costs borne by patients has grown. In the past couple of years, a few new financial risks have emerged that have put even more pressure on practices to collect effectively, to protect themselves from hidden risks of non-payment.
ACA-related risks
One of the most challenging risks is the premium grace period feature of the Affordable Care Act (ACA). The grace period prevents insurance companies from cancelling coverage for federally subsidized patients until the patient misses three premium payments. For practices, this means a patient may appear to have coverage, but the health plan won’t reimburse for services until the patient catches up on outstanding premiums. If a patient needs important care, a practice will naturally want to provide it. But if the patient doesn’t ultimately get current on premium payments, the practice could lose the entire value of the service.
The grace period is one of several aspects of the ACA that practices find confusing. Once they learn a bit about how it works, they’re unnerved and want to learn more about how they can protect themselves – by, for example, verifying that premium payments are current before scheduling procedures. Another ACA-related risk to practices is the distinction between being covered and being eligible for benefits. Practices that mistakenly provide care before patients have completed their enrollment and are eligible may be unpleasantly surprised to find they won’t be reimbursed for their services.
Another new financial risk comes from a change to FICO’s methodology to reduce the weighting of medical debt in credit score calculations. Practices owed outstanding balances may find that some patients see less urgency in paying, because the perceived impact on their credit will now be lower. This is yet another reason practices need to focus on collecting at the time of service, rather than billing patients afterwards. Some portion of patient bills always goes unpaid – and now that percentage will likely increase.
Staying on top of changes that impact finances is a huge challenge for practices. It’s one of the reasons these speaking topics remain popular year after year. Newly promoted or less-connected managers may not even know where to start – or realize how much free information is available to them via vendor-sponsored webinars, or how much they can learn at relatively low cost at a management conference.
Reps can provide an invaluable service – without too much effort – by pointing out some of the issues faced by other practices, and the free resources that are available to help practices protect their profitability. (Or, perhaps your company might even want to sponsor a webinar – it’s a low cost way to build a list of new prospects and reinforce your relationship with existing contacts.)
These efforts can pay off for practices and even for your own companies. For example, your company may provide expensive products that will be billed directly by your company to the patient’s health plan. If the practice does a better job explaining to patients why they need to get current on premiums or wait until eligibility is confirmed, that also helps you avoid disappointing a patient or losing money on an unreimbursed device. Everyone in the economic chain wins when practices handle these processes more effectively.