Early-Out Collections in an Economic Downturn

By: David Figueredo, Solutions Architect, Revenue Cycle Services
Donna Reddy, MHA, CHFP, Vice President, Revenue Cycle Management

7 Ways You Can Support Both Patients and Revenue Integrity

Today, many healthcare organizations are facing new levels of uncertainty as a result of the COVID-19 pandemic. While each is focused on caring for patients and keeping team members safe and healthy, providers cannot help but also be concerned about the impact on other areas. This rapidly evolving pandemic has put pressure on all facets of healthcare, including clinical care, the revenue cycle, and personnel management. 

As organizations transition to a social-distancing operational model, many are asking what impact this will have on their AR, and particularly their patient balances. Across the country, employers are making hard decisions related to how to operate in a decentralized nature and whether to furlough or lay off employees. We know that patients are also often employees and parents at the forefront of this crisis facing similar economic risks and fears as the providers who care for them.

Patient liability early-out programs are an essential link between the healthcare event and the patient. Passive outreach and education via print statements remains one of the first post-care financial interactions, but a continued and strategically designed, proactive communication program can help reduce the near- and long-term impact of this health crisis. 

While there are many headwinds in the patient AR space, this crisis also represents a unique opportunity as it relates to patient outreach. Never before have we had a greater opportunity to connect with consumers and patients. As patients increasingly transition to a work-from-home model with their employers, or find themselves unemployed, the opportunity to connect and engage also increases.

With that said, it is imperative for providers to evaluate their communications and outreach programs to help ensure that all print, digital, and voice communications have a compassionate, empathetic, and respectful tone that acknowledges the patient’s new and often stressful situation.

There are several steps providers can take now, and over the coming months, to help increase patient-collection outcomes and lower bad-debt risk.

Below are a few strategies which your organization may wish to consider:

Increase screening for commercial and government insurance coverages 

The best way to maximize AR and reduce self-pay risk is to avoid patient collections that are both inappropriate and unnecessary. Issues with demographic and insurance data can lead to accounts being billed to patients, when those charges should have been first billed to payers. Consider deployment of automated coverage discovery processes to pre-screen patient uninsured and balance after insurance accounts for missing primary and secondary insurance. Change Healthcare has solutions that can provide this functionality today with the ability to quickly instream this automation into existing early-out programs. This helps to avoid unneeded patient calls, improve patient satisfaction rates, and accelerate overall revenues.

Increase your patient communications

As many individuals transition to a work-from-home model, and others find themselves unemployed, the opportunity to connect and engage with them increases. However, many of these individuals are likely to be under increased financial pressure and/or stress as they juggle multiple priorities in the home environment. Now is the time to update all your communications—print, digital, and voice scripts—to incorporate an acknowledgement of potential employment changes with directions on how to engage on balances due. This empathetic action lets your patients know you are sensitive to new difficulties and are eager to work with them to alleviate stress where possible. You also want to assess and adjust protocols on call frequency and refresh/update agent training. 

Consider accelerating prompt-pay discounting

Many organizations offer a prompt-pay incentive to encourage patients to resolve open balances within 30 days, and may also offer additional discounts later in the aging process. This is a good time to consider short-term plans to increase or accelerate the discounting process in the interest of resolving more open account balances before the larger tide of economic stress hits. Offering a significant discount to self-pay and even balance-after-insurance accounts, where allowed by law or per your payer contracts, may motivate patients to act.

Emphasize payment plans

Many patients do not currently or will not have the economic means to fully resolve their balances due to loss of employment or other financial issues. Organizations may currently support the ability for patients to make full and partial payments, but offering payment plans can be an important step to help patients start now to resolve their balances while still operating within the limits of their income. Payment plans should not be “honorariums,” meaning they should be secured with a credit card or bank account and should be drafted automatically. Leveraging technologies such as Change Healthcare’s SmartPay™ solution, these payment plans can be fully administered and even incorporate 30-, 60-, or 90-day delayed drafting schedules to further assist patients. The sooner you have a card or bank account on file, the more likely the patient balance will be paid.

Consider automated presumptive charity

If your organization does not already have a published financial assistance policy that includes discounting or write-off provisions for low-income patients, you may want to consider instituting one to provide you with additional flexibility. Due to widespread unemployment, there may be more patients who, in the near future, meet federal guidelines for low-income/poverty levels.  You may wish to consider implementing a presumptive charity screening within your existing early-out program so patients who are indigent can avoid punitive collection processes. Once published, and if it includes guidelines related to federal poverty level, you may consider deploying automated screening of patient accounts prior to bad-debt collections. This is often called Presumptive Charity screening, and can be implemented within existing early-out programs to help ensure indigent patients avoid punitive collection processes. Depending on your organizational structure and government reporting requirements, you may also be positioned to recapture or recategorize some of these write-offs financially. 

Delay referrals to bad debt and collections

Many patients who would typically pay their bills are going to be suffering economic hardship over the coming months that could impact their ability to pay. To be compassionate to this changing situation, consider changing your bad debt and collections referral process. This may include delaying the referral of any patient account by 60-120 days beyond current thresholds. This can be customized to allow any patient who has engaged via phone or letter to be delayed, while still moving accounts where there has been no engagement and no ability to connect due to incomplete or missing contact information. What should be avoided is negative patient sentiment and bad publicity that could come from aggressive and punitive collection activities; you also don’t want to lose the opportunity to care for these patients in the future. 

Coordinate with your collection vendors

Engage your collection vendors to help ensure their charters and operational models are updated to align with your early-out/active AR program adjustments. If your collection vendors have not initiated these conversations, consider scheduling calls soon to discuss adjustments to letters, call scripts, and punitive actions (e.g., leans, garnishments, credit reporting, etc.). 

Finally, it may seem counter-intuitive, but this is an opportune time to invest in process and technology changes that will support your revenue cycle both now and in the future. For example, digital engagement programs that include text and email alerts were important yesterday and will be more so in the future. Using this time to take those big steps may better position your organization when the economy and healthcare begin their recovery in coming months.

We know that this tumultuous period can be very stressful for you and your organization. Change Healthcare is here to help you weather the changing dynamics of the healthcare environment. If you would like to discuss these or other strategies, please reach out to us.