A Better World without Patient Statements

Written by on July 2, 2012 in Practice tips - No comments

Why moving into an electronic payment system benefits the practice and the patient.

By Mary Pat Whaley, FACMPE

There are two things I’ve found over the years that medical offices have a hard time giving up. One is the appointment book. The other is patient statements.

My first experience with creating patient statements was placing patient ledger cards on the copier. The copies were folded and slid into envelopes and mailed to patients. Despite a bad photocopy of handwriting of several different people squashed onto skinny lines, patients routinely understood what the bill said and paid the total. That was 25 years ago.

Today the process of sending statements to patients is largely outsourced along with electronic claims, but it’s not very electronic. If we can get paid by insurance companies electronically, why not get paid by patients electronically? I suggest that the practice of sending patient statements is not only resource-intensive, but it is also a 20th century business practice unsuited for a 21st century business. Why do practices insist on clinging to an outdated method of billing?

Here are the excuses I routinely hear for not eliminating statements:

  • “Patients must get statements, or they won’t know to pay us.”
  • “Healthcare payments are so complicated that patients need a statement to understand them.”
  • “It’s not legal not to send a statement.”
  • “We don’t know how much the patient owes us until the insurance company pays.”
  • “We don’t get to see our patients face-to-face, so we have to send a statement.”

Let’s address these objections one at a time.

“Patients must get statements, or they won’t know to pay us.” I disagree. Patients do not need statements to know to pay us. If they did, then we’d only have to send one statement and everyone would pay! We know that’s not true.

 “Healthcare payments are so complicated that patients need a statement to understand them.” It is our job to educate patients about their financial responsibility. We understand that insurance coverage is complex, but it’s not so complex that we can’t explain it to them. Our businesses, our very jobs, rely on our ability to explain to patients what they owe. It’s just that simple.

“It’s illegal not to send a statement.” Nope.

 “We don’t know how much the patient owes us until the insurance company pays.” That may be true, but we have all the tools we need to make a very educated estimate. There is no reason why we cannot estimate the patient’s portion and make a small adjustment (refund or additional charge) on the patient’s credit or debit card once the insurance company pays.

“We don’t get to see our patients face-to-face, so we have to send a statement.” Most practices are dealing with this head-on by placing staff in areas, mostly hospitals, where staff can meet with patients and discuss financial responsibility.

Setting up a statement-free practice is relatively easy. Here are some tips:

Use an online payment system that allows electronic payment plans. An electronic payment plan enables a practice to enter a payment plan once, and have the system draft the credit/debit card appropriately without staff management. It should also be able to send a receipt to the patient’s email, or to send a message to the patient to pick up the receipt through a secure portal.

Load your contract allowables into your practice management system. If your system doesn’t have that capability, create a cheat sheet of your top codes for each contracted payer, so your check-out staff can calculate what the patient owes. There are also systems that can put together your contract information and the patient information into an estimate of what the patient owes for you.

Get online eligibility access that includes information about the patients’ benefits, deductibles, co-pays and co-insurance. This is available through your practice management system, your clearinghouse, or from a separate system that reads from your appointment schedule.

Practices that offer procedures or surgery should employ a financial counselor to sit down with patients and talk through financial responsibility and set up payment plans.

Coach staff on talking to patients about money. Teach them to become comfortable with collections.

What’s the bottom line?

People pay their bills via their credit/debit card routinely – this is not new or unusual for the majority of people.

The ability to “set it and forget it” via electronic payment plans simplifies the payment system and speeds up cash flow.

The ability to adjust a patient plan once insurance pays means no waiting to refund the patient or collect the remaining dollars.

Your staff will still have to post the payments into the practice management system (although a few have integrated posting), but eliminating statements will save your practice money and time.

Patient statements are a waste of time and resources. Think of what your life might be like without statements:

  • No monthly expense to generate or send statements via electronic service or printing and stuffing.
  • No need to sort them out of the mail, open them, post them, copy or scan them, and deposit them.
  • No returned checks.
  • When three or more statements don’t zero-balance the account, no need to prepare the accounts to be sent to third-party collections and write them off.
  • No need to dismiss the patient from the practice.
  • No need to post any collections payments and adjustment to the accounts.
  • No need to deal with the patient when they want to return to the practice and you have to deal with it.

But what takes the place of statements?

Credit Cards

Having a credit-card-on-file program in your practice has the potential to simplify patient collections, as well as improving your cash flow. Let’s take it a step at a time:

  • Evaluate your patient base to determine if a credit-card on file program will work for you. As of the end of 2011, creditcard.com says there was a total of more than 1 billion credit and debit cards (Visa, M/C and A/E only) in circulation in the U.S., and the average person has 2.7 cards. Almost everyone has a credit or debit card and they routinely use them to pay bills.
  • Once you decide you want a credit-card-on-file program, decide on a time-frame to implement it.
  • Start communicating to patients that you are going to a credit-card-on-file program.
  • Shop for an online credit card processor that allows you to set up payment plans and process refunds.
  • Develop your workflow for collecting at time of service, and for using the credit card on file to charge balances and make refunds after the EOBs arrive.
  • Role play and practice with the staff to make sure they feel confident explaining the credit-card-on-file program to patients.
  • Go Live!

To find out more about electronic payment systems and other pracice management advice, visit www.managemypractice.com

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