Estimating Patient Out-of-Pocket Responsibility

According to some sources, patients are now the third-largest payer group in the US behind Medicare and Medicaid. So, now is not the time to let those amounts due slide! One of the best ways to capture those amounts due is by avoiding surprises on the part of the patient by letting them know right at the point of scheduling their appointments what their responsibility amounts will be after their insurers have reimbursed them.

Practices are often reluctant to collect estimated patient responsibility at the time of service because of confusion over whether they are allowed to do so. Since many patients are now covered by high-deductible health plans, many payers have become more flexible in allowing deductibles and coinsurance to be collected at the time of service. The payment amount made by the patient will need to be included in the claim when it is submitted to the payer. Payers also require that any overpayment made by the patient be promptly refunded.

Physician offices with the ability to provide an upfront cost estimate to a patient can help eliminate an unexpected bill, which may cause problems for the patient and, ultimately, the practice. Physicians spend years developing relationships with their patients and a surprise bill may destroy that connection in a moment. Primarily because no one likes this kind of surprise and some patients struggle to pay an unanticipated bill.

If you are considering enforcing the time of service payment collections as part of your revenue cycle strategy, which is highly recommended, make certain to look over your payer contracts. You may also want to seek guidance from a healthcare attorney for clarity regarding state laws and whether payments can be collected from patients before claim adjudication.

This depends on how capable your office is when it comes to monitoring your patient accounts. You should also assess how well your practice management software supports your patient collections process. There is also an administrative burden when dealing with overpayments. Unless the patient is nowhere close to satisfying their deductible, it’s likely that you will end up having to issue a refund. An example in which this may happen, despite the best effort in estimating what they may owe, is when a claim from another provider is processed before your claim. In this case, a deductible may no longer be owed.

It’s also worth mentioning that you should be aware of your patients have an FSA (flexible spending account) or HSA (healthcare spending account) tied to their insurance. This brings us to having a credit card on file. Being able to charge patients immediately after services are rendered is a great way to get paid promptly. It also allows you to get authorization to charge up to a certain amount automatically directly after adjudication.

For patients that have an FSA or HSA tied to their insurance, you may still want to consider using the credit card on file approach as opposed to collecting the estimated amount. This could help you avoid having to issue a refund if the estimate is not accurate. Again, if another provider’s claim hits before yours, this will alter the patient’s remaining deductible. Some reports show that practices only collect 50% of patient responsibility after patients leave their offices. To further improve your collections rate, consider collecting a percentage of the full estimated amount at the time of service.

Many practices have been successfully estimating patient responsibility for years using a combination of a spreadsheet listing their most commonly used CPT codes and the associated reimbursement rates for their common payers. This coupled with your current process of eligibility verification, should allow for a fairly accurate estimate of what the patient’s responsibility will be for the visit. You can then have a conversation with them about their payment options.

Estimating a patient’s responsibility is just one piece of the overall patient collection process. It’s vital that your financial policy is clear and up to date. It should reflect what your requirements are regarding payment at the time of service. Expectations should be set up front before services are rendered to avoid confusion. It is also imperative that your staff is familiar with these policies and is trained to implement them appropriately.

To increase the effectiveness of the patient collection process, it should be streamlined with overall medical billing functions. Medical Billers and Coders (MBC) provides billing services which include estimating the patient responsibility module also. To know more about our medical billing services you can contact us at 888-357-3226/