The medical staff consists of doctors to nurses and they are currently on a small raft which just holding all of them over water and any storm could destroy it. The reason for such a grim situation is the high rate of deductibles. As a physician I learned this hard way- initially, we had a constant cash flow with respect to a number of patients then with time overhead charges multiplied. With overtime we analyzed factors which were affecting my Account Receivable (AR).
Two factors that were affecting Account Receivable:
- Payers (insurance) increased patient deductibles.
- Patients were frustrated with out-of-pocket costs in spite of paying the premiums.
The conversation with patients about money is a most awkward topic for any physician and the other part being is a non-reliable insurance broker which is fueled by a confusing marketplace of insurance where patients are mostly unaware of any facts. The high deductible health plan from insurance companies in which most of the patients are unaware is hitting the patient finance hard.
Due to high deductible patients are looking for alternate option:
- Patients stop approaching primary care and look for quick fixes.
- Patients avoid seeing physicians regularly to reduce out-of-pocket costs.
- Emergency cases of patients ending up in critical care unit.
According to the recent survey we had conducted if a physician sees a patient and they are about to make $100. The insurance company will pay $75 and other parts will be paid by the patient as the out-of-pocket patient.
How to improve the deductible which needs to be collected?
If you are trying to improve your collection, getting your Account Receivable (AR) under control, or improving cash flow it’s not impossible. Let’s explain with an example a patient comes in for a level four visit, we see that the unmet deductible is $3500 and we know that for the service provided by the physician not 100 percent service will be covered. A Medicare amount allowable for a patient visit is $164. The actual payment will vary depending on the payer. The expected revenue will be $164 so a patient will have to go in for co-pay $25 will be paid by insurance and $139 will be paid by the patient.
For an alternate route instead of asking for an entire amount, the physicians will collect half of the insurance amount beforehand. This makes the total collection as $94; the patient will carry an internal cost of $70. You have now reduced your financial risk, from there on you agree to charge the patient 3 monthly payments for $23.3 with the credit card on file.
When the patient’s pre-pays the amount it benefits the patient more; paying upfront from helps them to follow through with your health plan. Multiple channels for reimbursement will help you achieve the required financial easiness without affecting the core practice.
Here are three steps you should implement to improve your practice:
- The clarity in business decision-making and financial policies to plan out the necessary step to include collection and deductibles.
- Hire a pre-coding team who will estimate the calculations before the actual patient walks in.
- Communicate the cost of diagnoses and treatment beforehand and offer multiple options of payment for patients.
A medical billing company can palliate your practice advising you through different patient scenarios. This will not only reduce your AR stress but also create end-to-end management for the reimbursement cycle. A outsource medical billing company will sort out your pre-payment glitches and verification process. To know more about different channels for Account Receivable (AR), contact us at info@medicalbillersandcoders.com/888-357-3226.
