Hospitals have many clinical and business considerations that may impact their sustainability in the consumer-driven market. Obtaining collections from patients is crucial to a hospital's bottom line and hospitals may have to employ various strategies to work with both patients and payers in the billing and collections process.
During Becker's 2nd Annual CIO/HIT + Revenue Cycle Conference, a panel seasoned in the billing and collections arena delved into how hospitals can optimize their collections process.
Here are five thoughts:
1. Know your contracts. Collecting upfront from patients may be vital to receive the money owed from a procedure, as some patients may fall prey to the 'out of sight out of mind' mindset.
"If you have the right tools in place for the business office folks to collect cash upfront, it will impact your ability to augment and enhance your cash," said Naya Kehayes, principal of ECG Management Consultants "Some managed care contracts limit your ability to collect upfront and you need to understand the nuances of contracts that impact upfront collections."
Lisa Rock, president of National Medical Billing Services, explained collecting upfront is not always feasible for patients. Some patients may even forgo care if they don't have the available cash. "It seems that folks who come up with these policies don't do billing everyday and don't understand there are a lot of holes in the system," she added.
2. Automate the collections process. Money can often be an uncomfortable discussion and hospitals may not have the in-depth conversation about bills. To help convey important information about what a patient owes and when, hospitals can automate the process.
"There is more investment in the patient collection arena, but adoption is quite slow," said Nader Samii, JD/MBA, CEO of National Medical Billing Services. "Automation helps patients understand what they actually owe. You can automate the money conversation into a process that allows patients to look at different payment options and have it taken care of just like other departments in their life outside of healthcare."
To begin automating the collections process, Ms. Rock said hospitals should look at the backend to determine where the money is coming from and how much patients are paying so hospitals have a baseline.
3. Understand where your services are shifting, and present this strategy to payers. When undergoing contract negotiations with payers, understanding where your services are shifting is an essential element to obtain good rates. Services are shifting to the outpatient setting, and many hospitals are joint venturing with ambulatory surgery centers or opening outpatient departments to transfer lower acuity cases. However, the sickest of the sick still need inpatient care and that can be quite costly. Ms. Kehayes explained hospitals can show payers they are offsetting costly inpatient care by the cost savings accrued doing cases on an outpatient basis.
4. Data analytics will pave the way for an optimal business strategy. Data analytics may help hospitals understand where services are trending and formulate a strategic business plan to present to payers during negotiations. The data hospitals acquire from their systems can show how their results meet or exceed requirements, and payers will likely favor hospitals with the data to back up their claims.
"In the next two to three years, I see an influx of investment going into analytics and business intelligence," Mr. Samii said. "From a revenue side of things, being able to have insight and transparency into what is going on in terms of expenses for various procedures and reimbursement will be important. With data analytics, the world will look very different."
When selecting systems, getting a bargain may not fare well for hospitals. Ms. Rock said providers make a big mistake selecting inadequate software system because a good system can provide essential data such as denials rates, demographic error rates and other data that can yield tremendous savings for hospitals if they can pinpoint where they are losing money.
Ms. Kehayes added, "If you don't have good systems, you won't have good data and that data is important for building your business case [to payers]."
5. Select the talent willing to go into the trenches. When hiring someone for revenue cycle management services, that person needs a variety of skills aside from having a strong analytics background. Data should be the person's primary driver, and they should be well-versed in key performance indicators. Additionally, talent should be able to communicate well with parties on all fronts.
"I look for someone who knows how to communicate with payers, patients and providers who all have their own language. It's not good enough to have someone who can only run reports," Ms. Rock said. "If there is a problem, you don't want to them to look like a deer in headlights. They shouldn't be afraid to lift up the hood and see what is going on in there."
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