All healthcare organizations are seeing growth in their accounts receivables as a result of rising patient responsibility. Yet, many organizations continue to manage their growing receivables in the same way: adhering to a standard revenue cycle process without making adjustments to accommodate for the higher amounts. Receivables are an asset that should not be left to collect dust in a revenue cycle, but rather should be managed in a way that promotes the highest possible recovery.
In this transformation from revenue cycle to asset management there is one stand-out tool consistently tracking money owed: outbound calls to patients.
Revenue Cycle Management vs. Asset Management: What's the difference?
The traditional revenue cycle manages the process of collecting receivables. A standard process looks something like this: the first patient statement is sent within 30 days from the date of service, and follow up statements are sent for anywhere from 60 to 180 days. When no payment is made the patient is sent to collections and the organization passively waits for the patient to decide to pay the agency cents on the dollar.
Where the revenue cycle approach focuses on process, asset management focuses instead on earnings and value. How should receivables be managed? By following up early and often with the patient immediately following date of service.
According to the American Hospital Association, "The best performers start all collection follow up earlier, and by phone as opposed to written. Nearly 75% of best performers start collection follow up in less than 30 days from discharge, and 50% of best performers start follow up by phone in less than 20 days from service."
But how, exactly, can making phone calls to patients improve receivable collection?
Ensure and Improve Data Accuracy
According to a recent survey of 63 health systems across 12 states, there is a 58% average error rate in patient data. Of these errors, approximately 37% were contact errors, largely in address information. Confirming demographic information during a follow up call to a patient can prevent healthcare organizations from mailing thousands of statements to incorrect addresses, avoid insurance denials due to wrong demographic information and prevent HIPAA violations arising from mailing patient information to the wrong person.
The remainder of the errors discovered were in patient identification, including names, dates of birth and social security numbers. This is an obvious HIPAA issue that can (and must) be avoided.
Not only does following up with patients improve their experience with a practice and help to build rapport, a short phone call also protect patient information, maintain compliance and save in overhead costs.
Still not convinced?
Avoid Account Misidentification
The same survey showed 23% of charity care eligible accounts were misidentified, along with 6% of insurance eligible accounts. Creating a program to call patients shortly after insurance determination to identify the availability of secondary insurance or charity care eligibility can save hospitals from missing out on millions of dollars of misidentified accounts.
Setting aside the financial consequences, 501(c)(3 ) charitable hospital organizations can also be in violation of the IRS 501(r) regulations under the Affordable Care Act by failing to identify financial assistance eligibility, which could lead to loss of charitable status.
Outbound Calling = Managing Assets
By the time accounts reach bad debt status and are turned over to an agency, which will attempt to collect on the debt by making phone calls that could have been made months before, healthcare organizations will have already spent more on statements and processing than will be recovered. Even accelerating the same old revenue cycle process will only bring about the same results in a shorter time frame. Engaging with patients early and beginning payment conversations will not only lead to better recovery before bad debt, it will also improve data accuracy, lower overhead costs, prevent HIPAA breaches and lead to more revenue from appropriately identified patient accounts.
Get started with a completely customizable early follow up program today and begin improving your revenue cycle through appropriate asset management.
Written by Ali Bechtel, Public Relations Coordinator
This information is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Although we attempt to provide up-to-date information, laws and regulations often change. We make no claims, promises, or guarantees about the accuracy or completeness of this document. For legal advice, please consult an attorney.