Reiner: I'm much more interested in collecting payments at the time of service than scoring it at a later date or getting promises. To the degree that a patient can't pay in full at the time of service, we do allow them some flexibility but create less risk for ourselves by creating a secured payment plan. We take their credit card or checking information and charge them each month. The only way they can get out of that promise is to cancel the credit card or close the bank account. O'Donnell: We need to come to an understanding that seeking payment at time of service is not at all inconsistent with our mission. But there's a huge conflict in the industry with key individuals who still don't know that and believe that it's incompatible to ask for payment at the time of service. I don't know of any other industry that gives a pass to the consumer.
Lelinski: And other medical services don't. You never go into an orthodontist or a dentist without paying 50%. Our industry has to push through the discomfort of asking patients for payment and establishing a realistic plan for meeting their obligations. Helping patients understand their liability before they receive treatment is more humane and respectful than surprising them after the fact.
HL: What are the advantages and disadvantages of outsourcing patient payments?
Yoesle: More and more companies are offering a centralized insurance verification, scheduling, and precollect service. You can tell them exactly what you want to collect and how to collect it. You can tell them which funding programs to offer and which patients to say no to. When the administrator calls you and complains that someone couldn't get in to get a chest x-ray, you can say, "Oh, it's that darn company that we outsourced to, you know, they're really strict. But look, our net revenue is up. Our preservice collections are through the roof. We didn't even hit $10 million last year and we're up to $12 million halfway through this year. Wow, what do you think about that?" Outsourcing lets you offer your patients a myriad of options, and it's more cost-effective than you could ever be.
Reiner: I don't think we can abdicate that patient interaction. Then someone else is running our network, aren't they?
Reiner: If we abdicate that responsibility, we're no longer running our own network or making decisions about where the patients go, where they get scheduled, how they get scheduled, and I just don't think that CEOs will want to do that.
O'Donnell: It's also a big patient satisfaction risk. I know some healthcare providers that have outsourced and have actually chosen to go overseas. It's a huge dissatisfier.
HL: How do you balance customer relationships, your image, and your mission with the need to collect payments—especially when an account goes into collections?
Yoesle: When you sell your debt, it's up to you as a provider to contractually protect those patients. Because what you're selling is liability, and you're selling accounts and you're selling paper. What you're not selling are people and patients. Those patients are going to come back to you as a provider. It's up to us to tell your debt buyer that, for example, they can't resell or file a judgment without prior approval. Now that's going to cause your collection rate to plummet. You have to balance that protection with how much cash flow you really want.
O'Donnell: There is another leverage point, and that is the health plan itself. If plan members signed on with high deductibles but then are defaulting on those deductible payments, we need to go after the health plan the next contract cycle. We can impact their discount to recoup those dollars that have now gone to bad debt. Now there's a bit of negotiation that has to take place, but we're sending the message to payers that this is their responsibility because they're selling the benefit design. This is how they're getting people in the door, how they're getting employers to sign up with their plan. They're reducing the employers' costs, but if we're at the end of the food chain, then that's going to have ramifications for the health plan or payer.
Yoesle: We show payers our scorecard with the bad debt maturity on their beneficiaries for that month. We get a lot of blank stares across the table. We explain to them, "This is expected reimbursement that we contracted. We don't care if it comes from you, BlueCross, or the patient. We have to collect that. That's how much we budget to have in our checking account, and we don't have that now. You have to address that in the contract."
HL: How will new payment models, such as value-based purchasing and bundled payments, affect revenue and collections?
O'Donnell: I'm not bullish on whether bundled payments are even going to materialize. They'll be tested, there will be some pilots. I've seen examples where commercial health plans have figured out how to drive the change they're seeking without having to retool their entire claim processing system.
Lelinski: That's where I see capitation as more of a valid model. If you're going to take accountability, capitation gives some potential of an upside. You can calculate the actuarial value of an insured life depending on age and other factors. It's easier to administer.
Yoesle: But generally that's not what healthcare providers do. They're not in the business of taking risk. Insurance companies are. Asking healthcare providers to suddenly take risks—it's not what we do. We take care of patients.
Reiner: There are still too many providers that make money on fee for service. In other words, why would you go backward economically on something unless you really had to, right?
O'Donnell: So did we convince you that fee-for-service is not dead?
HL: I guess we'll see. Speaking of which, with so many uncertainties and so many complex concepts with far-reaching implications, how do you talk to and educate leaders about these issues?
Yoesle: You talk about data and about mission. You're balancing mission with financial education with operational education to a C-suite person, and you have four minutes to do it. It's challenging. Discussion 101 is know your audience and what to say.
HL: What are some other considerations when it comes to collecting payments at time of service or securing promises to pay?
Reiner: As we move toward more EMRs, documentation will drive the charges. If you're documenting a level 3 evaluation and management visit, you know that by the time the patient is ready to walk out the door. That claim could be adjudicated, as with the pharmacy model, and you would know your copay is $35. There's no reason that episodic physician visits can't be done like that. Inpatients are a little different, but the only reason that it can't be done is because the payers don't offer it and there's not a singular work flow for it. There are actually payers that do offer it now. But you'd have to have five different work flows for five different payers.