Becker's ASC Review

21 Sponsored by: Executive Briefing: Advantages of Upfront Collections Prior to ASC Service A merica's healthcare industry is shifting left and right, and creating chaos that is proving costly. Most notably, as reimbursement structures change, healthcare consumers must as- sume greater financial responsibility for their care, and it's a reality that's leading to sticker shock. Unfortunately, when healthcare consum- ers experience sticker shock regarding their treatment and recovery, they become less likely to pay. For surgery center and hospital business offices, the consumer's state of surprise and subsequent reluctance to pay is un- derstandably problematic. Collecting fees for service is becoming more of a chal- lenge and too many accounts are being dropped into the "120+ Day" bucket, where the task of accounts receivable becomes almost impossibly difficult. Fortunately, new automated systems and program platforms, such as the in2itive Patient Estimator Tool — created in part- nership with Medical Recovery Services — are presenting simple solutions that can help struggling surgery centers gen- erate more cash flow, reconcile accounts and find success in collecting payment on or before the date of service. Here are five things to keep in mind as your business office works to offset cash flow issues: 1. Prepare for more risk patient payments. It's no secret that there's been a marked shift in the payor paradigm, and it's a change that should have healthcare fa- cilities prepared for greater risk when it comes to patient payments. But where did the shift begin? On the heels of the Great Depression in the 1930s came the Blue Cross Blue Shield Association and the third party payer concept — this protected hospitals when patients could not pay their bills but, as time went on, also shielded patients from knowing the real costs of healthcare. Now as we wade through the Great Re- cession, the burden of payment is shifting back to the patient, who is responsible for most or all medical bills. So what's the downside? Medical bills are unsecured debt, so if a patient is facing economic hardship outside of healthcare, your bills will probably be among the last paid, if they are paid at all. Care to guess how that has translated for providers like you? In an article published in January 2013, Forbes magazine stated that, "hospitals uncompensated care costs — medical care for which no payment is received — jumped nearly five percent to $41.1 billion in 2011." Their numbers were taken from an American Hospital Associa- tion report. $41.1 billion. That's what hospitals have been forced to leave on the table because they couldn't collect. 2. Expect collection early or at time of service. Knowing the increased risks associated with patient payments, it's important to collect allowable fees at or before the time of service. Programs like the in2i- tive Patient Estimator Tool are specifically designed to generate that initial payment and then keep patients on track to pay their balance. While it sounds ridiculous for a hospital to offer services for free, that's exactly what they end up doing all too often. It starts when they're unable or fail to col- lect for services up front — then they're stuck sending bills and cycling the account through A/R and ultimately increasing your bad debt. For perspective: it costs an average of $8 to $12 to send a single patient bill, which is usually for sums that should have been collected at the time of service. If your office has to send 100 patient bills every month, that's a minimum of $800 for your facility and as much as $1,200. Now what if you have to do that every month of the year? Suddenly, your facility is looking at annual costs of $9,600 to $14,400 just to bill for fees that should have been paid when your office was face-to-face with the patient. 3. Develop payment proto- cols for patients and make sure they understand it. One of the most successful means of 5 Solutions to Generate Improved ASC Cash Flow By Jocelyn C. Gaddie, Vice President, Business Development, in2itive Business Solutions Jocelyn C. Gaddie

• Cover