How a Small Hospital Increased Patient Collections by 300%
A small community hospital in Illinois boosted patient collections by moving business office and revenue cycle management functions to the front-end of the organization.
As patient financial responsibility continues to increase in a more consumer-focused healthcare environment, more hospitals are shifting healthcare revenue cycle management strategies to improve patient collections.
Iroquois Memorial Hospital in Illinois is one of these healthcare organizations. Rebecca Wright, Vice President of Strategic Planning at the 25-bed community hospital, recently shared with RevCycleIntelligence.com how her organization boosted point-of-service patient collections by 300 percent by shifting back-end business office functions to the front-end.
“In the past it’s always been focused on back-end or business office and in collections, and we turned it on its head and looked at how we can push it more to the front-end,” said Wright. “Because we knew by pushing more of it to the front-end, we could reduce overall costs for our organization and make outcomes a little bit better.”
The front-end approach to revenue cycle management and patient collections helped the hospital to realize and even exceed a $7,000 per month collection goal for all point-of-service payments, including walk-in visits.
For many providers, obtaining a patient’s financial responsibility, especially at the point-of-service, has proven to be a difficult task. Hospitals only collect payments upfront from 35 percent of patients at an office or in the hospital, accounting for just 19 percent of patient-owed fees, reported Availity in March 2015.
For Wright, the first step to improving the hospital’s chances of receiving point-of-service payments was identifying the major inefficiencies in patient access and revenue cycle management. She noticed that revenue cycle fragmentation and lack of patient collection understanding prevented the hospital from realizing more patient payments.
“The biggest thing I noticed was - and it’s not just here, it’s everywhere - the entire revenue cycle was, prior to the changes we’re seeing, a very segmented process,” stated Wright. “People only were familiar with their role whether it was registration or scheduling or billing. They only understood what their role was.”
Revenue cycle management fragmentation also exacerbated knowledge gaps among patient access staff. Wright added that patient access staff had a “lack of understanding on what the big picture was, including how patient responsibilities were calculated and what was actually needed to process a claim.”
Wright’s next step in response to patient collection challenges was education for both hospital staff and patients.
“The biggest thing I focused on first was education,” she said. “That was for both my staff and for patients. Patients here in the past had never been expected to make any type of payment when they arrived for service. This was a transition for both my staff and the patients.”
For hospital staff, patient collection education focused on a basic understanding of patient financial responsibility.
“We did just some general education for all of my staff and it was just baseline on what insurance is, what does a deductible mean, what does a co-pay mean, what is a patient’s responsibility altogether, how is it calculated,” stated Wright.
Once staff understood the basics, Wright worked on breaking down revenue cycle management siloes by allowing different patient access employees, such as billers, centralized schedulers, and registration staff, to teach their colleagues about their position.
For example, billers trained registration staff on how to improve claims management processes from the patient’s first interaction with the hospital.
“We worked on a lot of education, which was the billers educating the registration staff on how to look for eligibility to make sure a claim was put in correctly,” stated Wright. “We made sure that when my patient access or registration staff looked at eligibility they understood what it meant and that they picked the correct insurance company’s name before they put it in the system because if it’s not put in correctly upfront, it ends up in a denial in the backside, which ends up costing us money and takes a lot longer to get a claim paid.”
Wright also focused on patient education, especially since the hospital expected patients to pay for services upfront or make a plan to fulfill their financial responsibility. Through improved scheduling processes and awareness, patients started to understand what they owed and how to pay it.
“Once patients started to understand the process, they were more willing to make the payments upfront,” Wright said. “A lot of them knew ahead of time.”
“My centralized schedulers as part of their regular routine when they were scheduling patients, especially for high-dollar medical imaging procedures or outpatient surgeries, they were doing reminder phone calls or setting the procedure up,” she continued. “They were reminding them to bring whatever their patient responsibility is to the hospital on the day of service.”
In addition to education, Wright sought a patient access vendor to provide the hospital with patient collection tools. By partnering with Availity, Iroquois Memorial Hospital implemented an automated claims management process, customized scripting to guide staff through payment scenarios, patient demographic and financial data availability, and insurance verification systems.
Availity also installed a patient cost estimator at Iroquois Memorial Hospital, Wright pointed out. Prior to patient collection improvements, the hospital had no way of finding out accurate patient financial responsibility estimates.
But the estimator provided hospital staff and patients with real-time access to potential costs.
“The vendor that I paired with, Availity Patient Access, has tool inside of it, which links to a file that I created, which is our chargemaster and it can link it to their insurance company in real-time,” Wright said. “It gives me an estimate based on their real-time insurance and how much it is supposed to cost for them to have the service here.”
Through patient cost estimators and verification systems, Iroquois Memorial Hospital not only improved patient collections, but it also enhanced claims management processes. For example, eligibility-based claim denials decreased.
The hospital also boosted staff productivity by eliminating 33 hours a month spent on medical necessity verifications.
Additionally, the front-end approach to revenue cycle management and patient collections helped Iroquois Memorial Hospital respond to recent increases in healthcare consumerism. About 74 percent of providers reported a growth in patient financial responsibly in 2015, according to an InstaMed survey from June.
The report attributed patient financial responsibility increases to greater enrollment in high-deductible plans. CMS reported in February that 90 percent of the 12.7 million consumers in the health exchange program chose a high-deductible plan during the 2016 open enrollment period.
Iroquois Memorial Hospital felt the shift as healthcare consumerism became more prevalent, Wright stated.
“With the market shift, there’s definitely more high-deductible plans in the market,” she said. “Patients are also becoming more educated on what their responsibility is for healthcare. And they seem to be sometimes more involved. There’s more active consumerism.”
In response, the hospital implemented more patient financial assistance programs to help consumers manage their increased financial responsibility and improve the hospital’s chances of collecting.
“We have different types of patient plans available,” Wright stated. “We’re willing to work with patients to make sure they can get the service they need and we can also get paid for the services we provide.”
“We have two different plans here,” she continued. “We have a three-month plan directly with the hospital. We can set the balance over three months. We have an extended payment plan with another vendor for a small interest rate that covers an extended period of about 12 months.”
Moving forward, the hospital intends to expand its online payment options to make it easier for patients to pay.
“We can handle payments across our website right now,” said Wright. “We’re working on possibly putting other types of payment plans available in the future on our website.”
Patients are also pushing for more electronic payment methods, stated the InstaMed report. Seventy percent of consumers said that they preferred an electronic payment method, such as credit cards or eChecks.
Wright concluded by offering advice to other hospitals that are looking to improve patient collection processes and boost their bottom line in a changing healthcare market. First and foremost, she advised hospitals to educate their staff and patients.
“My top advice I would say is education is vital,” Wright suggested. “It’s not just for your staff, it’s for your patients, too. That goes back to the old saying, ‘Knowledge is power.’”
The more staff know, the more they will be able to effectively receive payments and make patients feel comfortable with such a sensitive topic, added Wright.
“Staff will definitely be more confident if they understand and have the information in front of them and understand what they’re actually asking for,” she said. “It comes across in their confidence levels and patients pick up on that. I’ve noticed if my patient access staff is confident, it sets the tone for their entire visit, the patient’s visit with our entire healthcare system to be more positive. They’re more trusting of our healthcare organization if confidence is portrayed from the beginning.”
Accurate patient registration should also be a top priority for hospitals that are looking to improve claims management processes, advised Wright.
“My last thing is that the more accurate the input the registration staff can put on the claim to start the process, the better the end result will be,” stated Wright. “The claims can be paid faster and there’s less chance of eligibility-related denials. It just creates a better process.”