With the new reimbursement landscape, it is more important than ever before that orthopaedic practices collect any balances due at the time of service or establish a credit card on-file program to collect payment plan amounts due.
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Published 10/1/2015
Elizabeth W. Woodcock, MBA, FACMPE, CPC

Tips for Managing Patient Collections in the New Reimbursement Landscape

According to the Kaiser Family Foundation’s 2014 Employer Health Benefits Survey, 80 percent of U.S. workers with health insurance must meet an annual deductible (average $1,100) before benefits become payable under the plan. Most health plans include extensive cost-sharing features, such as copayments, coinsurance deductibles, and narrow networks.

As financial accountability for health care shifts from payers to patients, managing patient collections becomes more important than ever. To ensure that your orthopaedic practice can thrive in this changing reimbursement environment, consider the following tips.

Set clear expectations
Both patients and medical practice employees must adjust to the new regime of patient collections. A patient’s initial appointment scheduling call and the appointment confirmation call are prime opportunities to set payment expectations. In addition, the practice’s Website should clearly outline established payment policies.

To encourage staff to participate in collecting patient payments, consider offering team rewards, such as an employee luncheon. Employees need to recognize that asking patients for money does not run counter to good customer service; in fact, informing patients about the money they owe is a sign of respect.

Manage balances
Be sure that all returning patients are not just reminded, but asked, to pay balances still showing on their accounts. Consider training appointment schedulers to accept credit card payments over the phone. As patients call for appointments, schedulers can advise those with balances: “Ms. Jones, I see that you have a balance on your account. Would you like to take care of that now? I’m happy to accept a credit card payment, if that would be convenient for you.” Take the opportunity to collect the balance at the time of service as well.

Reengineer your collections cycle
Even with improved collections at the time of service, some patients will still have outstanding balances after their insurance pays. Consider compressing your collections cycle: Send statements as soon as they become due (“day zero”), transmit statements twice a month, and include specific due dates on each statement. Establish a 90-day cycle for collection attempts before transferring the account to a third-party collections partner. Continuing to bill via the traditional collections cycle beyond the 90th day adds costs and delays to your collections cycle, with little return.

Start a credit card on-file program
Consider accepting credit cards to prepay for services. Work with your bank or credit card processor to install technology that securely stores credit or debit card information that enables you to collect advance deposits or payment plan amounts. This option is much more cost effective than producing patient statements every 30 days.

Reframe the contractual adjustment
Often, patients may not realize how significantly payers adjust gross charges. Stop referring to the “contractual adjustment” on patient statements. Instead, call it what it is: a discount. When applicable, show patients the discount in both a dollar amount and a percentage of the gross charge.

Collect in advance for surgeries
Many orthopaedic practices schedule elective cases only after receiving a deposit. To do this successfully, integrate the financial clearance process into precertification or authorization protocols for the surgery. This enables the practice to present patients with their benefits and their financial responsibility, achieving full transparency. Include a fee for late cancellations or no-shows into the financial agreement so the practice can retain at least a portion of the deposit if the patient doesn’t present for the surgery. Collect a minimum of 50 percent of the amount due; it may be the only payment some patients will make.

It’s a shared responsibility
It’s important that practice employees change their mindset that collections are the sole responsibility of the billing office. Instead, every employee should be made aware of how his or her actions can influence the entire billing process. If you can identify the percentage of denials caused by mistakes at the front office, don’t hesitate to share this information with those employees. You can even go a step further by asking them to find solutions to inconsistent time-of-service collections and other persistent problems.

Most importantly, don’t let squabbles and finger pointing between front office and billing office personnel supersede the larger goal—to improve the function of the revenue cycle in your orthopaedic practice. The shifts in the reimbursement landscape require a new strategy; prepare now for your practice to survive and thrive.

Elizabeth Woodcock, MBA, FACMPE, CPC, is an experienced author and speaker focused on medical practice management. She can be reached at elizabeth@elizabethwoodcock.com

The Revenue Management Program offered through TriZetto Provider Solutions, an AAOS Member Advantage Program partner, helps practices recover more revenue and efficiently handle the appeals process. For more information, visit TriZetto Provider Solutions/AAOS.