Surveys have established, for any single visit, the average insured patient owes the hospital $389. If the patient leaves the facility without paying, the chance of collecting plummets by sixty percent, meaning millions of uncollected cash for the average mid-size hospital.

Following patient discharge, hospitals understand the chance of collecting decreases and the cost of collecting increases as time passes. The overall cost for a hospital to collect is typically reported between two and three percent
of revenue, meaning front-end processes become more important, especially with higher co-payments and high deductible, consumer-directed health plans.

Front-end processes improve a hospital’s collection success and profitability by lowering cost-to-collect, reducing uncompensated care, lowering self-pay receivables, shrinking bad debt, increasing overall cash, and improving patient satisfaction. Front-end processes offer a unique approach to help providers calculate patient financial responsibility and collect money at Point-of-Service (POS).

Collecting at POS has become a major focus for many providers, as more patients are presenting as self-pay or with high deductible commercial health insurance. Educating the patient regarding his or her financial obligation at POS provides price transparency, improving patient satisfaction. Collecting the patient financial responsibility on the front end ensures that fewer people receive menacing letters, collection agency calls or invitations to court. Providing accurate statements of financial responsibility represents a new hospital paradigm, essentially moving collections to the front part of the revenue cycle. The technology to present an accurate statement of patient financial responsibility prior to service has now become available through the use of high-speed, high-volume rules engine processing, replacing software code that must be completely tested following even the most basic change to the code base.

A successful front-end revenue cycle process must include collection technology enablers. These “must-haves” include precise eligibility verification, accurate calculation of financial responsibility, and systems and processes to maintain the data. Other mechanisms that strengthen front-end processes include online payment options, integrated credit card authorization systems, ATM accessibility, demographic verifier, and credit scoring.

Everyone in the process (hospital staff and patients), should be educated on why hospitals must begin to provide an accurate calculation and collect the patient’s out-of-pocket financial responsibility prior to service. Publish your plans on your website, brochures, and pre-admission packets, and inform your patients of financial responsibility during scheduling and preregistration. Patients would like to know the extent of their personal financial responsibility at the time they present for service, rather than waiting weeks for an Explanation of Benefits (EOB) and, ultimately, an accurate bill.

Role-playing, developing scripts, and setting accurate and realistic expectations ensure your staff is fully trained and prepared, and can significantly reduce confusion for the patient. Delivering an accurate statement of patient financial responsibility in real-time, prior to service, becomes the linchpin of a hospital’s move to collecting successfully at the front end of the revenue cycle.

US healthcare suffers from billions of dollars in lost revenue annually, from the inability to provide accurate statements prior to service, the high cost to collect on the back-end, write-offs, and the ultimate bad debt. With a well-chosen POS collection system in place, the hospital can provide accurate patient financial responsibility, increase collections, and reduce both the cost-to-collect and bad debt. Technology exists today to move a considerable amount of revenue cycle effort to the front end of the revenue cycle, and the time has come to embrace the process of presenting accurate statements to patients and collecting payment prior to service.

About Recondo Technology

Recondo Technology develops Software as a Service (SaaS) that brings efficiencies and cost savings to healthcare payment processing, which currently costs the medical industry a staggering $360 billion in annual expense. The company’s first service, SurePayHealth, performs real-time calculations of patient financial responsibility at scheduling or Point-of-Service. SurePayHealth can increase hospital revenue by millions of dollars per year. (Shannon King can be reached at shannon.king@recondotech.com or 602.526.7269, or for more information go to www.recondotech.com.)