Written by Glenn S. Demby | G2 Intelligence | January 4, 2023
Shared courtesy of G2 Intelligence. To subscribe for future G2 Intelligence briefings, go to: Subscription Levels - G2 Intelligence
The lethal combination of shrinking payor reimbursements and rising costs has created significant revenue challenges for labs. And as if the financial times weren’t already tough enough, recent changes to medical debt reporting policies could have a debilitating impact on the effectiveness of patient collections efforts. Rather than lament the changes, labs will have to find some way to adjust to them. What’s called for right now is strategic, big-picture thinking as well as a fresh perspective, one that considers how patients experience their encounter with you, not only clinically but also financially. Here’s an approach to ensure your lab patients have the most positive financial experience possible.
Backdrop: The New Credit Reporting Rules
While frequently necessary, resorting to debt collection isn’t exactly a recipe for making patients feel good about their financial experience with your lab. The good news is that initiating the collection process is generally a measure of last resort. That’s because labs (and other creditors) have an unspoken but potent kind of leverage, namely, the potential negative impact failing to pay one’s bills may have on a patient’s credit score. Rather than jeopardize their ability to secure a mortgage, car, or other loan in the future, patients with outstanding lab bills may be inclined to dig deeper into their pockets.
For better or for worse, that patient motivation is all but gone now. On July 1, 2022, the nation’s three largest credit bureaus—Equifax, Experian, and TransUnion—began removing certain kinds of medical debts from consumer credit reports. Specifically, the bureaus agreed to take three actions to relieve consumers from the burden of medical debt1:
Removing medical collections that were satisfied, i.e., paid off, immediately;
Holding off on recognizing medical collections until the debit is 12 months old, essentially giving debtors a breathing period; and
Ignoring outstanding medical collections of less than $500, starting in 2023.
The new policies affect 70 percent of medical debt, the credit agencies estimate. However, credit score provider VantageScore Solutions recently did Equifax, Experian, and TransUnion one better by announcing that it would stop factoring all medical debts that are in collections into its scores2.
Hooray for the credit bureaus.
Medical debt is strangling Americans, with nearly one in 10 (23 million) owing money for medical bills, according to the Kaiser Family Foundation3. That includes 11 million people who owe $2,000 and 3 million owing more than $10,000. But while the new medical debt reporting policies are a positive for many people, they may also make it harder for labs and other medical providers to get paid for the services they deliver.
A Patient-Centered Solution
While the new medical credit reporting policies didn’t create them, they could aggravate labs’ nonpayment challenges. So, what are labs supposed to do? One potential solution is to approach the problem from the patient’s perspective, considering the entirety of the patient experience.
“From the time a patient is registered to the time the claim is paid, there are many challenges that jeopardize the lab’s ability to get reimbursed, as well as the patient’s experience,” explains John (JD) Donnelly, CEO of FrontRunnerHC.
The key, says Donnelly, is quickly understanding each individual patient, and having the capacity to access their accurate patient insurance, demographic, and financial information when and where you need it.
Implementing a Data Automation Strategy
The question then becomes how to develop these necessary capacities. The first stage is to ensure you can quickly obtain the right data, including patient insurance and demographic data. Donnelly suggests using data automation tools that can instantly provide the appropriate patient insurance, demographic, and financial information. He also emphasizes the benefits of leveraging the tools at the front end of the process to catch problems early, expedite payments, and enhance each patient’s experience.
“Patient data often changes along the way,” cautions Donnelly, “as people move or change jobs and health plans.” It helps to have an automated platform that can immediately capture and process these information changes to ensure you have all the information necessary for a streamlined workflow and accurate, timely, and effective billing.
“We talk about accessing the needed patient data ‘as early as possible and as often as needed’ throughout the patient’s financial journey: from registration through payment,” Donnelly says. “Clean patient data drives efficiency throughout the workflow and benefits everyone: the lab, referring physician, payor, and patient.”
Donnelly recommends solutions from vendors who continuously monitor their own proprietary network connections with extensive and continually growing regulated data sources and that also have the ability to provide immediate access to the information while strictly adhering to HIPAA, SOC2, and Core.
“Ideally, missing and inaccurate patient information, which is crucial for producing clean claims and prompt payments, should be corrected before a specimen is collected,” Donnelly says. Labs with aging accounts receivable (AR) might want to consider audits and cleanup of the AR backlog to determine what is and isn’t collectible.
While understanding the patient’s demographic and insurance coverage information is critical, you also need a process for assessing each patient’s propensity to pay, especially as it pertains to the latest payment challenge exacerbated by medical debt reporting policies. Automated data solutions that come with Financial Disposition/Propensity to Pay functions can help.
Donnelly drills down on that further. “Having the capacity for authorized users at the lab or healthcare organization, on demand, to analyze and understand each patient’s unique financial situation and likelihood to pay enables them to make decisions that are best for both their organization and each individual patient, such as discount, payment plan, collection, etc. This information can help organizations not only address their patients’ affordability concerns but also drive faster reimbursements.” The information can also be analyzed in aggregate to create a cost-effective patient-centric collection strategy based on your past patient payments and likelihood of collecting.
Finally, remember that patient payment issues are just as if not more stressful for the patient than they are for you. So, billing and pay operations must be handled with tact, sensitivity, and a commitment to understanding each individual patient.
For the original article visit: https://www.g2intelligence.com/how-data-automation-solutions-can-improve-collections-patient-satisfaction/