This past week I was a sponsor at the IMGMA (Iowa Medical Group Management Association) conference held in Cedar Rapids, IA. My business, FinanSynergy, my vision is to be Iowa’s Premier Health Care Experts. At dinner, the very first night I was thrown a curve ball by someone who has long been in medical administration. The question, “How much does it really cost to send out even one patient statement for health care services?”
Put this into context – we all receive bills monthly or are billed on the spot for household repairs. Personally, and depending on your generation, I have my bills set up to auto pay either from my bank account or to a credit card. These bills come like clockwork. I will occasionally put a stamp on an envelope and send it out with a physical check – but even then, I try to utilize bill-pay through my bank.
Medical cash flow is intricate. Health care is complex as we do not know exactly what service is going to be done during an encounter and there are many regulations that must be followed to obey privacy, to check off quality measures, and to meet government data requests that entering the procedure(s) itself takes time, time = money. These procedures are entered into an electronic health record which then interfaces to a billing system. Good billing systems “scrub” the claims to reduce the number of rejected claims – which are still bound to occur. That I just the process of getting the initial bill to the primary payer – typically an insurance company.
The insurer typically takes 30-45 days to review the claim – it may pay, it may deny, or it may ask for additional information. If the claim denies a person for your clinic (or billing company) has to respond and provide additional information or correct the information on the claim. At this rate, it could be 60 days before a statement is even processed for the patient. These statements are either paper or electronic. Paper costs money – the cost of printing, stuffing and the stamp. Electronic statements are much cheaper.
Getting the patient to pay…I go back to my personal example, I have most of my expenses set up to pay directly out of my bank account or credit card. Typically paying by credit card is an option on my statement – but as a patient I still have to go through the motions of initiating the payment. WHY are we making it so difficult for patient to pay their bills? Pre-payment is also a viable option – if we are properly verifying benefits and eligibility we should know co-pays, deductibles, co-insurance and have a relatively accurate idea of how much each patient will owe.
Solutions – collected “estimated” amount up front which is gathered from the pre-check-in process. Providers could also create a credit card on file process and charge the credit card when the explanation of benefits is paid by the insurance. Finally – and this will be fully covered in a future blog post, but charge a monthly fee for “direct care.” This model allows a steady stream of income where the patient opts out of the provider billing their insurance (this IS allowed under the affordable care act).
So back to the question, what is the average cost to send out a patient statement? It will vary per provider, labor for coding procedure, diagnosis, claim scrubbing, software, credit card fees and re-filing claims and sending/re-sending patient statements. With the average patient requiring 3.3 statements before paying off their statement – we can and should be making it easier for patients to pay their bills.
Contact Katie@FinanSynergy.com or 515.635.5531 for a free consultation. FinanSynergy® IS Iowa’s Premier Health Care Financial Firm.