COLLECTING CO-PAYS With the increase of high-deductible health insurance policies over the last decade, providers throughout the country have seen a surge in patient self-pay.

It's estimated that 1 out of every 4 dollars spent on health care today comes directly from patients, a startling statistic that speaks as much to the surge in patient self-pay as it does to the challenge of running a surgical business office at a time when many patients need an interpreter to help them understand their high-deductible health insurance policies — and a mathematician to figure out how much they owe out-of-pocket for surgery.

It's never been more critical to your bottom line to get patients to pay their self-pay portion on the day of surgery. Remember: It's more difficult to collect from patients after service is rendered. Plus, you risk angering and alienating patients if you blindside them with a statement for what they owe out-of-pocket when they assumed that their health plan fully covered their surgery. That's where your business office team comes in, taking the time to educate patients about their insurance plan, verifying their benefits and eligibility, and then explaining those benefits so patients understand how much they owe before they show up for surgery. Here's what you'll need to do.

1Translate their insurance plan. Don't assume that patients understand the terms and conditions of their health plans, especially complicated cost-sharing ones that have, let's say, a $1,000 deductible, 20% coinsurance and a $50 set copay. It's confusing. Your collection rates will benefit when you help patients sort it all out.

2Estimate what they'll owe. Send patients a letter with an estimate, based on your contracted fees, of what they'll owe, and a reminder that payment is due at the time of service. It's important to emphasize that the dollar amount you quote is an estimate. For one thing, the patient could receive additional services on the day of surgery. For another, estimates are based on the patient's remaining out-of-pocket accumulators for their cost shares about 10 to 14 days before surgery. When verifying the benefits, let's say the patient has a $2,000 deductible on his plan, $1,000 of which has not been met. Your claim could have $1,000 applied to the deductible (if the allowed amount is higher than $1,000), then the remaining amount will have whatever co-insurance percentage the plan has (typically 10%, 20% or 30%) applied to it. That remaining $1,000 deductible is going to hit some provider's claim, but it might not hit yours if claims for other services go through the plan before surgery.

3It's just the facility fee. Explain in your letter that this estimate is only for the facility fee and that patients can expect separate bills from the surgeon, anesthesiologist and other providers (lab/path) involved with their care. Note that additional patient balances may apply to their claims.

4Follow up with a phone call when patients owe $500. When you determine that the patient's self-pay amount is $500 or more, follow up with a phone call to verify that the patient received the letter and to answer any questions the patient might have about his benefits.

5Reach your goal of zero collections. Patients who need financing options may apply through a company on our website. Charge card autopay can be spread over 2 to 3 payments if there are remaining balances after final insurance processing. In those rare instances when patients refuse to make payment, they might be redirected to another setting or, after consultation with the surgeon, the case could be cancelled.

No more chasing
You might be pleasantly surprised by patients who'll appreciate the time and effort you took to verify their benefits and determine their financial responsibility. We implemented our payment-at-time-of-service policy just before the Affordable Care Act went into effect. Since that time, patient responsibility amounts have gone up and insurance payments have gone down. Bottom line: Our patient-pay policy has greatly impacted the financial health of our multispecialty center, which does nearly 4,000 cases a year. Our collection rate is exceedingly low, which lets our 5-person business staff spend time on more important matters — like verifying benefits and estimating self-pays. OSM