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What is the Cost of Outdated Provider Payment Collection Practices?

What is the Cost of Outdated Provider Payment Collection Practices?

By InstaMed, a J.P. Morgan company

The Trends in Healthcare Payments Tenth Annual Report: 2019 reported that 65% of providers saw an increase in patient responsibility compared to 2018. Though consumer payment responsibility continues to be a steady and substantial segment of overall healthcare costs, providers are not experiencing the desired payment growth upon service delivery. With high premiums, confusion around their medical bills and a lack of understanding of their explanation of benefits, patients have trouble deciphering what they owe. As a result, providers are putting more into collection activities than ever before.

What Does Increased Patient Collections Mean for Providers?

More patient collections remain a top concern for providers. In the past twenty years alone, hospitals delivered a staggering $660 billion in uncompensated care.

With unwanted debt piling up, provider collection resources are strained and stretched. Confusion and lack of clarity around payment responsibility pose issues for providers and patients alike. In a 2019 survey, 13% of privately insured patients overpaid their service balances and received overpayment refunds. Almost half of providers report being unaware of patient responsibility during visits. Even after that responsibility has been identified, collecting payment can pose problems. 78% of providers are unable to collect patient balances over $1000 within a month and 74% note that it takes more than a month to collect any patient balance at all.

Paper Weighs Down Payment Processes

Uncollected balances are not the only strain on provider payment practices. Many providers still rely on manual processes that result in administrative back-office spending to get the job done. 87% utilize paper as part of their collections processes and 91% receive paper checks from insurance payers.

Such dated manual and paper-based processes slow the collections process and fail to keep up with the shifts in consumer payment responsibility, impacting provider revenue as well as the overall patient experience.

Digital Experiences, Patient Loyalty, and a Provider Organization’s Bottom Line

Today, more Americans are connecting digitally than ever before. Digital adoption is expected to increase as the social distancing guidelines related to COVID-19 promote limited in-person interactions. Last year, more than 60 million consumers actively engaged in the digital on-demand economy. 84% of consumers are already engaging in simple, secure and convenient digital transactions for their non-healthcare bills online. They have also come to demand similar interactions in the healthcare payment process.

To deliver the positive payment experience that patients demand and to simplify processes for quicker collection, providers must engage with patients in the digital environments they currently exist in:

      • Online patient portals enable customers to view their accounts and make in-the-moment payments without leaving home for quick payment collection upon service completion.
      • Automated payments allow for easy collection using a patient’s securely and compliantly stored payment information with a provider’s system that can be processed upon claim adjudication.
      • eStatements let customers access and reconcile bills online, eliminating the need for patients to receive and pay bills by mail.

Improved patient payment interactions more than just streamline the collections process. 66% of patients reported being willing to consider switching providers for a more favorable healthcare payment experience. By delivering favorable experiences, providers can increase patient loyalty, ease confusion related to payment responsibility, reduce the number of outstanding patient balances and ultimately improve their organization’s bottom line.

 

Sources

American Hospital Association

Aite

Rockbridge

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