Verifying coverage, collecting payments get more complex for hospitals
High patient cost-sharing puts pressure on hospitals to invest in staff, systems
Identifying an individual’s health plan sounds pretty straightforward. Most hospitals have an eligibility system to verify a patient’s coverage for a specific set of services from specific insurance companies. But as coverage expands and gets more complex, so do the pressures on hospitals.
“But it can be difficult as people churn in and out of different plans,” said Ed Hock, researcher on revenue cycle at The Advisory Board Company. They may be eligible for Medicaid or certain plans that depend on income levels that can vary for members throughout the course of the year.
Hospitals may have benefited from the rocky rollout of the health insurance exchanges and the slow buildup of enrollees so they could get a better handle on the complexities in verifying patient coverage under new health plans.
The American Hospital Association noted that hospitals have seen an uptick in activity since January due to the new enrollment, but they were ready, including for patient coverage verification. “We are not hearing of significant issues from the hospital field. Significant work went into preparations and helping people get enrolled,” said Jeff Goldman, AHA vice president of coverage policy.
Looming larger, however, is that patients are going to be responsible for a much larger portion of their healthcare costs whether they obtain coverage in health plans through public or private exchanges, said Zac Stillerman, general manager of revenue cycle solutions at The Advisory Board Company.
As a result, hospitals may also have to take on a greater role as bill collector. Hospitals are traditionally staffed to pursue insurance companies for payment, not point-of-service cash collections from lots of patients.
“This whole thing is starting to snowball… where hospitals will start to see significant portions of their revenues from patients -- not from insurance companies -- and Medicare and Medicaid,” he said. It’s a combination of the Affordable Care Act activities, public and private exchanges, and traditional companies offering employees an option of a high deductible plan.
“One of the big challenges that hospitals have to face is how do they redo their staffing, their systems, and the way they collect payments, when a larger portion of the revenue stream is coming from a different source,” Stillerman said.
Hospitals need to invest in more robust financial counseling around payments than they do now and eligibility software that will be sophisticated enough to also determine how much they can expect to collect of a patient’s co-pays and deductibles for a specific procedure even before the patient has the procedure.
If a patient is coming in for knee surgery and has a deductible of $6,000, which hasn’t been met yet, hospitals need to determine how much of that to go after in order to get some payment, be it a discount if it is paid up front or a monthly coupon process, he said. Should the hospital cancel the surgery if the patient doesn’t pay a certain amount of it before the day of service?
Research has shown that the moment a patient leaves the hospital after their procedure, 50 percent are less likely to pay the bill. “If you aren’t leveraging data and better processes to work with them on what will eventually be their payment before they even come into the hospital, you’re leaving on the table a huge opportunity,” Stillerman said.