Estimating and collecting patient responsibility is a challenging task. Not only must you collect money directly from your patients but also you need to ensure patient satisfaction that guarantees repeat visits and positive online reviews. Patients who have an exact idea of how much they owe are more likely to pay, which increases collections and ultimately improves practice cash flow.
According to Medical Billing and Coders, 92% of consumers want to know their payment responsibility prior to a provider visit, and 47% would switch providers to understand the costs of services at the time of scheduling appointments. With the growth of high-deductible payment plans and out-of-pocket responsibility for patients at an all-time high, collecting on those patients at time-of-service is crucial to your practice’s financial health.
Estimating patient responsibility prior to claims adjudication is really tricky and so far, there is no estimation software or tool that serves the needs of smaller, independent practices. However, small practices can absolutely estimate patient responsibility successfully to minimize risks and effectively improve the critical task of improving patient collections.
Defining Patient Responsibility
Patient responsibility is the total amount of patient owes to their healthcare provider. It’s the portion of a medical bill that the patient is required to pay rather than their insurance provider. Patients with no health insurance are responsible for 100% of their medical bills. A patient with a High-deductible health plan (HDHP) is required to pay on their medical bills until their deductible is met and it is a higher amount on average.
More number of patients are choosing a High-deductible health plan (HDHP) thinking they will not likely seek medical attention that specific year. Most of the time they have to see their provider more than they initially think, leaving them with more medical expenses than anticipated.
Estimating Patient Responsibility
The reason why practices avoid estimating and collecting patient responsibility is that they are not sure whether they’re really allowed to collect the estimated patient responsibility at the time of service. Patient Responsibility largely depends on payer contracts and state laws.
As mentioned before, as more patients are covered by High Deductible Health Plans (HDHP), many payers have become more flexible in allowing the collection of coinsurance and deductibles at the time of service based on the estimated patient responsibility.
However, this often requires that you include the amount paid by the patient on your claim when it is submitted. They also require that you process any refunds for overpayments as soon as the overpayment is identified.
The next question is whether you should collect the full estimated amount. This depends on how well you are monitoring your patient accounts for overpayments and issue refunds. You need to investigate your practice management software and need to find out how well it supports your patient collections process.
Unless the patient has a large deductible that is not even close to being met, you could end up having to refund the patient. This can happen when a claim from another provider is processed before your claim and there is no longer a deductible owed.
There are also patients who have Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA) that may be linked to their insurance payer and are automatically charged to pay for services. To collect the full estimated amount at the time of service, find out your patients that have an FSA or HSA tied to their insurance.
Collecting Patient Responsibility Portion
The best way to collect the patient responsibility portion is to ask for permission to put a credit card on file with authorization to charge up to a certain amount automatically directly after adjudication.
You can make it your financial policy to collect a percentage of the full estimated amount at the time of service.
Some numbers show that on average, practices only collect 50% (sometimes less) of patient responsibility after patients leave your office. This means that if you collect more than 50% of patient responsibility at the time of service, then you’re improving your collections rate. With the non-collected patient responsibility portion increasing all over the country, make sure your practice has the right workforce to optimize their patient payments and claims process.
Additional Resources on Patient Responsibility
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