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Dealing with Unmet Deductibles

Unmet Deductible

Unmet deductibles challenge health care practices and interrupt cash flow.  Long gone are the days when collecting patient payables meant collecting $10 copays.  More and more patients have chosen a high deductible health plan to save on premiums and/or take advantage of health savings accounts (HSA).

Unmet Deductible This means that each patient must pay out of pocket for health care services until their deductible is met.  After that, their insurance will pay your claims.  The amount of the deductible varies from policy to policy.  However, the most common amounts range from $200 to $6,000.

Unfortunately, each new year finds patients, providers and clinic staff struggling to meet these deductibles.  Each must find an effective way to deal with the impact when deductibles reset.  Here are a few basics for improving your patient collections.

Tips to Improve Collecting Patient Deductibles

  1. Prior to the patient’s appointment verify eligibility and know what your patient will owe.  This is especially important because patients change insurances which results in changes to the deductibles.
  2. Always verify whether or not a deductible has been been met when you call to verify the patient’s insurance.
  3. Reduce front desk awkwardness and instead tell the patient why they will owe before the appointment.  Letting the patient know what they will owe is critical.  You can even do this when you place appointment reminder calls.  Patients don’t like surprises and they are being educated to understand that they will owe more than a $10 copay.
  4. Make it easy for them to pay and give them options.  Let them pay on a credit card, by cash, check, money order and even PayPal.  Make sure your staff offers to accept payment during the appointment reminder call or when they check-in or check-out.  Also, make sure that you have this payment expectations/information posted in several places in the office, including the waiting area and patient rooms.
  5. Implement a credit card on file policy whereby your patients agree to have all or some of the balance charged to their credit cards each month.  You do not want the liability of keeping their credit card information onsite, so use a certified and secure third party to retain the information.
  6. Promote your patient portal and if you don’t have one – get one.  Online payments are the way to go!  Some patients just want to go online and make a payment.
  7. Collect a flat amount in advance.  If you don’t know how much the patient will owe, then collect a flat amount.  Let the patient know that after the claim has been paid the balance will be billed to them.
  8. Inform your staff of how to collect money.  Your staff should be well-informed of all office and financial policies.  Consider providing staff with scripts to help them collect patient payments.

Time of service collections and lots of communications will help to make collecting deductibles easier and in the long run reduce everyone’s stress during ‘deductible season’.

Patient Deductibles Can Strangle Your Cash Flow

5 Tips to Normalize your Cash Flow

At the beginning of each year, many physician practices face shortfalls in cash flow due to health plan deductibles.  Medical deductibles can play havoc with physician practices.  Health plans have consistently increased deductibles and, of course, the Affordable Care Act (ACA) plans are now in the mix.  Thus, a greater financial burden is placed on the patients for medical services and, in turn, physician practices are left to deal with the cash flow slow down.

Not so very long ago, a large portion of the medical bill was traditionally paid by commercial insurers, Medicare and other third-party payers.  But now, the landscape has changed.  Physician practices are forced to walk a fine line between providing good clinical care and limiting the burden associated with increased costs.  There are no other professions where consumers expect to receive services or goods and pay later.  But that is exactly what happens with health care.

At the beginning of each year, patients must first meet their deductibles before reimbursements will be sent to the provider.  So when you submit your bill the majority, if not all, of the allowable (what the insurance carrier would usually pay directly to you) is applied to the patient’s deductible.  Therefore, you get $0 from the insurance carrier and you must then bill the patient and wait for payment.  This can result in a delay of payment for 45-90 days.  Without excellent collection efforts from your billing team it can even result in bad debt.

What does this mean for your practice?

Let’s say Dr. Brown’s monthly collections average $100,000.00 and the total patient deductible amount for the month is $25,000.  If Dr. Brown did not collect any money from the patients at the time of service, then the projected collections for the month would be his average of $100,000 – $25,000 in patient deductibles = $75,000.  Rather than his average of $100,000 he would have only $75,000  to pay his expenses.

Ultimately, patient balances should be collected.  But how long can your practice wait for this money?  How long can you provide these interest free loans to your patients?  Below, are five practice tips to keep patient deductibles from strangling your practice.

  1. Staff members need to know what a plan covers;
  2. Verify eligibility and deductible status before every visit;
  3. Have honest conversations with patients and explain patient responsibility up-front;
  4. Collect whole or partial payments from the patient while they are in the office;
  5. Develop payment plans.

The best way to minimize the impact of deductibles is to be proactive with patients by detailing costs and  requiring a payment of the patients’ deductible.  At first, this may seem awkward or you may feel uncomfortable asking for a payment upfront, but in today’s health care environment more assertive tactics are needed to protect your bottom line.

 

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