As payer reimbursements shrink and the number of underinsured patients increases, uncompensated care continues to challenge hospital profitability. To manage revenue recovery, executives should prioritize efforts to identify unknown revenue sources in order to protect their organization's bottom line.
This article is sponsored by TransUnion Healthcare.
Hospitals have provided over $576 billion in uncompensated care since 2000. To reduce the costs and pressures linked to uncompensated care, hospital leaders should leverage patient financial clearance tools to engage patients early in the revenue cycle, while complementing those efforts with revenue recovery strategies.
During an executive roundtable, facilitated by Jonathan Wiik, author of Healthcare Revolution: The Patient Is the New Payer, at Becker's Hospital Review 4th Annual Health IT + Revenue Cycle Conference in Chicago, Leslie Richard, national director of acute revenue cycle management at Englewood, CO-based Catholic Health Initiatives (CHI), and Michael Miller, director of reimbursement at Sioux Falls, S.D.-based Sanford Health, were joined by more than 25 health system leaders to discuss how to ensure earned revenue gets paid.
During the roundtable discussion, revenue cycle experts shared information on optimizing bad debt collection strategies, leveraging safety-net vendors to protect revenue, and the importance of engaging patients in the early stages of the revenue cycle.
Here are the top three insights from the discussion:
1. Ensure Medicare bad debt collection. Hospitals incur bad debt when patients are either unable or unwilling to pay their medical bills. As the baby boomer generation enters Medicare, Mr. Miller said he expects unrecovered debt related to Medicare patients to increase.
"Medicare currently reimburses 65 cents on the dollar, but there's always pressure to decrease reimbursements," Mr. Miller said. "What leaders should be aware of is not to leave those Medicare bad debts out at collection agencies in perpetuity because there might be a time when reimbursements are lower. The goal is to get those back from your collection agencies after the original amount of time for collection efforts."
As Medicare rules and state-specific regulations continually change, many hospitals do not have the internal resources and technology on hand to accurately determine eligible Medicare reimbursement.
To maximize revenue recovery opportunities under changing CMS regulations, it is important for hospital leaders to ensure debt is accurately documented as Medicare bad debt, Mr. Miller said. In order to accurately identify reimbursable bad debts, leaders can employ tools that analyze all categories of Medicare bad debt and identify coinsurance and deductible amounts from Medicare claims.
"It's important to have good documentation within your patient accounting system and make sure you're sending out the right number of claims," Mr. Miller said. Having a tool that identifies reimbursable debts is critical to recovering revenue, he said.
2. Capture more dollars with safety-net vendors. To protect hospital revenue, CHI implemented safety-net vendors — in areas such as insurance discovery — at multiple stages of the revenue cycle process, Ms. Richard said.
"We have a vendor who comes in to review missing charges, or what was missing based on how things were coded," Ms. Richard said. At the beginning of the revenue cycle, the health system, which has 100 hospitals and clinics, uses a scanning technology to identify patients without insurance coverage while there's still an opportunity to do something about it. "We try to figure out where we have leakage, and a lot of it comes in our denial reporting," Ms. Richard said. "If I'm getting a lot of eligibility denials, why didn't I know when I could do something up front? It's about dissecting your data to see where you have the biggest opportunity."
CHI also uses a tertiary service at the end of the collections cycle to collect on accounts that are a year old. "We do all of this and have generated about $60 to $65 million annually in safety-net vendor revenue," Ms. Richard said. "Without these safety-net vendors, all of that revenue would've been lost."
3. Engage patients on the front end of the revenue cycle. To improve collections, hospital leaders can focus on the patient financial experience prior to service and implement an easy payment process. "The whole patient experience changes when you know more about your patients in advance, as opposed to trying to get them to engage with you after they receive care," Ms. Richard said.
To engage patients early, Ms. Richard said hospitals need to make the processes of scheduling medical appointments, providing accurate estimates and paying bills easier for the patient.
"You can book a trip to Europe with more ease than you can go to the hospital," Ms. Richard said. "Patients should be able to schedule appointments, receive a payment estimate, and have flexible payment options — and all of this should be in advance of the care patients receive."
But hospital leaders are often challenged to successfully coordinate efforts to simplify the patient billing experience, according to Ms. Richard. "CHI struggles with it and we're working to set up a payment plan after getting a bill estimate," she said. "We want to give our patients more options and have our services be more time friendly, and to do this, we need to have conversations with patients to meet them where they are financially."
In conclusion
Hospital leaders today are working to manage revenue while facing numerous fiscal challenges, including lower Medicare reimbursement and missed insurance coverage. In this environment, revenue cycle leaders need to prioritize solutions designed to tap into lesser-known revenue recovery sources, improve the patient financial experience and bolster the organization's earnings.
Hospital leaders can use these solutions to ensure they're proactively collecting as many dollars as possible throughout all stages of the revenue cycle. Solutions that accurately identify more reimbursements earlier in the revenue cycle through in-depth data analysis and cross-referencing can help leaders maximize complex reimbursements and drive overall yield.
"I would encourage you to seek out services to protect your revenue and protect the patient experience," Ms. Richard advised the revenue cycle leaders in attendance.
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