In the good old days, most people had great, employer-sponsored healthcare plans. Patients simply provided their insurance cards at appointments, paid a $10 copay, and generally had low or no deductibles. Provider billers pushed claims out the door as quickly as possible, apart from holding claims for the first 30 days of the year when plan year deductibles reset.
Today, the healthcare landscape is quite different. For years, healthcare providers have watched the number of patients who are self-pay or on high-deductible health plans (HDHPs) grow. This has increased the already significant financial strain on healthcare providers. The good news is that there are ways to collect outstanding receivables faster — even when the patient is the payer.
The Downfalls of HDHPs for Providers and Patients
Because HDHPs are designed to shift cost away from the employer (plan sponsor) and to the worker, they have grown considerably:
- 294% increase in HDHPs compared to 2009 levelsi
- 67% of large employers and over 50% of mid-size employers offer HDHPsii
- 50% of current workers are enrolled in a plan with an annual deductible of $1000 or higheriii
Yet there are major repercussions when patients, who previously were only responsible for a copay, start footing a much larger part of the bill. Providers are now left with the task of collecting the allowed amount directly from the patient instead of the insurance company.
As every biller knows, patients with unexpected expenses take longer to pay and there’s a higher risk of having to write off those dollars. Provider accounts receivable (AR) bad debt has ballooned in tandem with patient out-of-pocket costs. As a result, revenue for the healthcare providers has decreased across the industry.
Right-day Billing: the Optimal Way to Handle Claims
Right-day billing has emerged as a successful strategy to reduce outstanding AR. There are two key factors involved in this approach. First, by regularly monitoring patient deductibles, providers can drop their bill at just the right time. When a claim is dropped after the patient hits their deductible, providers receive payment faster and directly from the payer, avoiding a patient pay status.
Second, understanding payer mix is integral to right-day billing. The type of payer makes a difference in deciding whether a provider should immediately submit a claim or hold it. For example, Medicaid and third-party liability claims can be submitted immediately, but commercial and Medicare plans should be held until the patient deductible is met.
Right-day billing is effective because it optimizes the timing of claim submissions, shifting the primary financial responsibility away from the patient and back to the payer. This ultimately reduces outstanding accounts receivable (AR) and generates more revenue for healthcare providers.
Using Automated RCM Optimization Tools To Support Right-day Billing
If right-day billing increases revenue, how can providers (easily) implement it? Billers can monitor deductibles manually by placing claims in a queue to recheck eligibility, and therefore updated deductibles, on a regular cadence. This is a somewhat laborious process, but it can be done.
A more efficient way is to use an automated RCM optimization tool to monitor deductibles and precisely time when to submit a claim. The best automated deductible monitoring solutions have customizable thresholds and settings, instantly notifying billers when to release a claim to the payer. There’s no manual effort, and the biller can have confidence in the submission timing. These automated tools help reduce the administrative burden on the billing team and facilitate the strategic shift to right-day billing.
To learn more about monitoring deductibles, right-day billing, and automated RCM optimization tools that can help, tune into the complimentary webinar, "How Healthcare Billers Can Monitor Deductible Status To Maximize Revenue and Reduce Bad Debt."
i 2023 Employer Health Benefits Survey, https://www.kff.org/report-section/ehbs-2023-section-8-high-deductible-health-plans-with-savings-option/. Accessed 17 December 2024.
ii Waddill, Kelsey. High Deductible Health Plan Enrollment Hit Record High in 2021, https://www.techtarget.com/healthcarepayers/news/366603688/High-Deductible-Health-Plan-Enrollment-Hit-Record-High-in-202. Accessed 17 December 2024.
iii Tozzi, John and Tracer, Zachary. Sky-High Deductibles Broke the U.S. Health Insurance System, https://www.bloomberg.com/news/features/2018-06-26/sky-high-deductibles-broke-the-u-s-health-insurance-system. Accessed 17 December 2024.