The last thing you want to learn at your hospital, as a patient sits at your registration desk:
- They can't pay, and no one knew prior to service
- Their insurance changed, and authorization is required
- They recently lost their job and have not paid their COBRA benefits.
At this point, you may end up with an unpaid account—and in this economy, that's not good news when hospitals continue to lose reimbursement dollars.
Pre-authorizations are crucial today. It is vital to cover all the key areas and prevent the patient and the hospital from learning bad news. The process covers more than just a pre-registration:
- Insurance verification
- Upfront payment notification to the patient
- Total out-of-pocket payment
- Payment options when full payment cannot be made
- Opportunities to screen for government assistance programs
- Medical Necessity check
- Medicare Secondary Payer check
- Accurate demographic/financial information
Prior to this year, the four hospitals of Baptist Health System Birmingham, AL, struggled with a success rate of "well under 50%," for pre-registration of scheduled patients, says Betty McCulley, CHAM, system access director/consolidated business office at Baptist's headquarters, Princeton Medical Center.
The 1,080-bed system fell behind in many areas because pre-registration staff members often were sent to help register patients during staffing shortages. Pre-registration numbers suffered.
"We were not meeting our pre-registration goals," says McCulley, who manages the patient access managers at the four facilities and serves as the National Association of Healthcare Access Management's Southeast regional delegate. Patients sat with registrars longer because they were not pre-registered. Insurance issues delayed the patient even further.
"And as we all know, 'wait time' is the No. 1 reason patients and their families become so upset," McCulley says. "They are sick, afraid of what they may be facing, and here we are holding them up and asking for information and money. Because the patient had not been contacted prior to arrival they were not prepared to pay upfront."
In February of this year, Baptist and McCulley's team decided to outsource its prearrival responsibilities 24 hours in advance of the appointment. The goal is 90% pre-registrations, which includes obtaining pre-authorizations, verification of benefits and patient contact for collections.
Upfront collections means the hospital does not have to pay fees to a company to collect after the service (and while the account sits aging in AR).
It's too early to measure its effectiveness, but McCulley says the percentage of pre-authorized patients and upfront collections have each increased. Baptist also saved five FTE positions because of the outsourced work.
As an added benefit for physicians offices, the outsource company obtains their pre-authorizations as well as those for the hospital. This was not meant to eliminate jobs; rather just allow physician office staff members time to complete other duties.
McCulley states the impact of increased pre-registrations on processes as well as point-of-service collections is already showing a positive trend.
Patients who are scheduled for elective services and have not received financial clearance are given the option to reschedule. Of course, the revenue cycle staff first checks with their physicians first before suggesting a reschedule.
"We don't do it without making sure the doctor feels it will not be harmful for the patient to reschedule," McCulley says.
And naturally, Baptist offers a variety of payment options to avoid rescheduling – from upfront and prompt pay discounts to bank loan arrangements.
"Some patients say they can't pay, then when you ask them to reschedule, they write you a check right then and there," McCulley says. "Once they know the appointment will be canceled, with their physician's approval, it's surprising how many people come up with the money."
Editor's note: This is the fifth in a series of stories on HealthLeaders Media talking to revenue cycle managers about coping in a tough economy. The previous installments were: