Revenue Cycle Management Source: The Academy of Healthcare Revenue
Achieving Revenue Cycle Improvement through Patient Payment Strategies
When a hospital implements or modifies a
revenue cycle process, it must ensure that
the process completely aligns with existing
policies and processes. For instance, point
of service collections cannot be perceived
as a practice that contradicts other departmental
processes, but rather as an important
strategy designed to improve revenue
cycle performance. One hospital took
this lesson to heart, comprehensively constructing
a POS collections process with an
emphasis on expedited insurance verification,
mandatory upfront payment, and staff
accountability.
Florida Hospital DeLand—a 156-bed
facility located near Daytona Beach—
turned its attention to POS collections upon
the realization that it was trailing behind its
Adventist Health System peers in upfront
collections performance, as measured by
upfront cash collections as a percentage of
non-government revenue. Revenue cycle
leaders such as Jennifer Bette, DeLand’s
Director of PFS, knew that the opportunity
for improvement was present, but could
only be achieved with the combined efforts
of the entire hospital. Administrators were
brought on board immediately and were
convinced not only by the success they
had seen in other Adventist hospitals, but
also by the need to react to worrying economic
and demographic trends. “Many
patients have higher out-of-pocket costs
and deductibles now, with the economy as
it is,” Bette says. “Especially here in Florida,
we’re really seeing a crunch with the
real estate market. As a result, businesses
are suffering, so they’re basically taking that
out on their employees by raising individuals’
out-of-pocket portions.”
Revenue cycle leaders, in order to secure
the support of key stakeholders throughout
the hospital, sent out a letter of explanation
to all hospital staff that play high-impact
roles in the upfront collections process,
including clinicians. Emphasized was
the ability of POS collections to make bill
payment more convenient, expedient, and
patient-friendly. Hospital staff were also
encouraged to inform patients of DeLand’s
motivation for POS collections in an effort
to address patients’ potential concerns, letting
them know why this practice was now
being emphasized.
The importance of gaining buy-in from
staff and patients cannot be understated,
but perhaps even more crucial is that revenue
cycle leaders devise an effective methodology
for handing off key account information
between each revenue cycle function
involved. DeLand recognized the
importance of these hand-offs (especially
in terms of insurance verifi cation), while
also addressing other key points in the POS
collections process:
Expedited Insurance Verification.
Before a payment can be requested,
the amount to request must first be
identified. DeLand fulfilled this need
by moving the insurance verification
function earlier in the revenue cycle
process. A 5-member insurance
verification team was formed to
deliver on-demand assistance to pre-registration
and registration staff, while
DeLand also created a pricing list with
the hospital’s top 25 most requested
services so that patients can receive
quick estimates of procedures’ total
costs. This list continues to be updated
on a regular basis as needed.
Ideally, medical appointments would
be scheduled far enough in advance
to guarantee insurance verification,
but this is not always the case (for
instance, DeLand will schedule same-day
appointments to ensure maximized
patient volume). For this reason, the
hospital established a communications
system using instant messaging that can
be completed within 15 – 20 minutes.
A department scheduler sends patient
and appointment information to an
insurance verifier, who retrieves the
necessary coverage information and
sends it to the pre-registrar. The pre-registrar
then contacts the patient and
informs the individual of his or her
residual liability.
Mandatory Upfront Payment. DeLand
offers patient advocacy services to
assist individuals in understanding their
medical costs, payment options, and
financial assistance resources. Patients
are motivated to explore these options
because DeLand instituted a policy
requiring full (or in some cases down)
payments at point of service.
If a patient portion is less than $500,
patients must pay that amount or seek
financial assistance; otherwise, the
appointment will be rescheduled with
the approval of their physician. If the
balance is between $500 and $1,000,
then patients must pay at least $500,
with the remaining amount to be
paid within 12 months at a minimum
payment of $50 per month. If the
balance is higher than $1,000, then
patients must cover 50% of the cost at
point of service, with the remaining 50%
to be paid within 12 months as well.
These mandatory payment requirements
are not applicable to stat orders or
head-, heart-, or lung-related services.
Staff Accountability. In addition
to requiring upfront payment from
patients, staff are ultimately the
individuals responsible for achieving
sufficient collections, and an incentive
program ensures that the staff
involved are personally vested in POS
collections efforts. For each individual
staff member, DeLand evaluates the
amount of payments collected, work
attendance, and the percentage of
patients successfully registered to
determine which individuals are
eligible for their bonus.
Incentives are determined by team
and individual goals that change
depending on the shifts staff work and
the departments in which they see
patients. For instance, a staff member
working first shift is expected to
collect twice as much as a second shift staff member. By adapting incentive
programs to fit the circumstances,
DeLand’s revenue cycle leaders can
ensure that individual staff are rewarded
appropriately, maintaining a high level
of devotion to POS collections.
Full implementation of DeLand’s overhauled
POS collections initiative launched
in April of 2008, and early signs already
point to major improvement. From January
through May 2008—a timeframe that
includes 2 months prior to the initiative, as
well as the transition period—DeLand collected
$100,000 more upfront than it did in
2007, a 20% increase.
Although POS collections is just a single
process contributing to revenue cycle
success, the increasing amount of medical
charges being paid out of pocket by
patients emphasizes the necessity of this
practice. By constructing a strong strategy
to enhance POS collections, revenue cycle
leaders are establishing an expectation
of upfront payment for patients and staff,
decreasing the back-end expenses typically
associated with collecting self-pay dollars
and potentially preventing bad debt.
The Academy of Healthcare Revenue
The Academy of Healthcare Revenue is a membership-based community that provides healthcare leaders with objective research focused specifically on the healthcare revenue cycle. Members receive an unlimited supply of all research--including benchmarking and best practice reports, implementation tools, monthly journals, attendance to virtual conferences, and more--designed to enable them to improve their revenue cycle processes and financial health from within. Furthermore, The Academy's membership offering is tailored to team members throughout the revenue cycle, from executive leadership to patient access, coding, billing and collections, and clinical staff, helping to drive process improvement efforts revenue cycle-wide. Collecting in Healthcare is one of four journals written by The Academy of Healthcare Revenue monthly.
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Media Contact Andrea Morrill
Research Director
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