VALUE
EXPERIENCE
RESULTS
Up-Front Collections and Today’s
Top Collections Technologies
The Technologies that are Transforming UpFront Collections in Access Management
October XX, 2011
Learning Objectives
 Learn the real costs of up-front collection avoidance
 Learn how to move the collections process from
customer disaster to customer service
 Learn the key collections technologies and the
application integration required to develop a
comprehensive “collections management system”
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The Cost of Collection Avoidance
 The out-of-pocket (self-pay) share of health care costs has
increased significantly for patient in recent years
 The cost-to-collect has also risen sharply as self-pay dollars
have increased:
 It is less costly for healthcare organizations to collect
self pay dollars prior to service, at the point of service or
at discharge.
 If self pay dollars are not collected at the point of
service or discharge, the cost-to-collect can be
4.75% - 10% of the balance.
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The Cost of Collection Avoidance
 Failure to collect “self pay” dollars reduces your ability to
improve services or invest in new programs to meet
community needs.

Research has shown:
 Most patients (68%) prefer to know about their financial
obligations at or prior to discharge.
 Over one-third want to know about financial obligations
prior to admission.
 Uncertainty and confusion about financial obligations
are a frequent source of customer dissatisfaction.
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Setting Expectations Is Customer Service
Patients may know very little detail about their health coverage.
This is particularly true for healthy patients who haven’t had to
use their coverage.
Patients often have 2 expectations that can lead to anger and
dissatisfaction when they are not met:
 1st Expectation: Having insurance means they are
“covered” and won’t have to pay (much!)
 2nd Expectation: Doctors and other providers have checked
for coverage before referring them to healthcare
organizations.
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Setting Expectations Is Customer Service
Uncertainty and confusion about financial obligations are a
frequent source of customer dissatisfaction. This uncertainty can
cause confusion between:
 The healthcare organization and the doctor
 The patient and the doctor
 The patient and the healthcare organization
Effective healthcare organizations understand that
communication is the key to decreasing this confusion and
improving customer relations.
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Setting Expectations Is Customer Service
When does a patient’s
responsibility for payment begin?
 A patient’s responsibility for
payment begins on the date that
services are rendered. Successful
organizations establish this
expectation during the registration
process before services are
delivered.
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Setting Expectations Is Customer Service
 Let Patients Know that Payment is Expected!
 While this may seem to be an obvious point, far too many healthcare
organizations begin the care process without letting patients know
how or when they expect to be paid.
 Organizations that are effective in up-front collections manage
patient’s expectations by:
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
Notifying patients that payment is expected when services are
delivered

Explaining uncovered amounts to patients before services are
delivered

Asking for remaining balances and uncovered amounts
Setting Expectations Is Customer Service
 Up-Front Collections Today:
 Ideally moves all appropriate patient collections from the
back-end (Patient Accounts) to the front-end (Patient
Access Services) of the Patient Financial Services
customer service cycle.
 Solidifies our commitment to customer satisfaction,
service excellence and performance improvement.
 Reflects a practical way for us to demonstrate our
organizations values in action.
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Setting Expectations Is Customer Service
 Demonstrate Your Values: Let Patients Know that
Payment Options are Available!
 Most organizations want to provide services to every patient.
 While payment is expected at the time of service, financial assistance
is available in the form of:
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
Payment deposits with payment plan arrangements

Discounted services based upon ability to pay

Payment assistance via government or other
sponsored programs
Setting Expectations
 Pre-service is the best time to communicate to the patient his
or her financial responsibilities. This is the time to let insured
patients know if there is a deductible, co-payment or coinsurance amount required and to discuss your facilities
expectations for payment of services rendered.
 This advance communication with the patient helps alleviate
possible future misunderstandings when payment is later
expected from the patient, and also helps expedite payment to
your facility. It can also help east the patient’s anxiety
regarding financial issues associated with healthcare services
by enabling you to……
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Setting Expectations
 Inform patients up-front of
non-covered services and
charges. Let them know
that they will be obliged to
pay these charges if they
choose to go forward with
the services.
 Request the full amounts
that the patient is obligated
to pay when requesting
payment.
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Setting Expectations
 Uninsured patients may be
responsible for the entire bill.
Whether the patient is insured or
uninsured, we begin setting
expectations by informing the
patient of the self-pay portion of
our charges so they understand
their responsibility for payment.
 Effective organizations establish
financial policies to address these
collection situations.
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Setting Expectations
Financial Policies
Financial Practices policies of
healthcare organizations should clearly
state that:
 Payment is expected on the date of
service
 Emergency care will be provided
without regard to a patient’s ability
to pay and
 Financial assistance is available for
those who cannot afford services
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A New Day
In the current healthcare
environment providers
constantly look for ways to
enhance revenue and reduce
cost.
As the patient out-of-pocket
portion of health care costs has
increased significantly in recent
years, provider bad debt has
also risen sharply.
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A New Day
Today, more healthcare organizations
recognize that an effective up-front
collections program is an important
way to reduce those costs.
While new technologies have emerged
to facilitate this effort, leading
organizations are increasingly learning
that the thoughtful integration of these
technologies can be a key driver of
collection efficiency and customer
satisfaction.
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A New Day
 Healthcare organizations are using a plethora of
collections technologies to reduce costs and improve
service delivery. When implemented as stand-alone
applications, these organizations are realizing impressive
results. However, when implemented as components of a
thoughtful “collection management system”, the overall
results can be greater than the sum of the individual parts.
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Application Evolution
Applications have evolved
along a fairly predicable path
Transformed Level 4
(Integration leveraged between
all applications)
Integrated Level (Integration
improves with ADT Application
Batched Level (Some Batch and
Direct Processing)
Niche Application Level
(Application Silos are formed)
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While progress has occurred at
every level, transformation of
work processes has been elusive
2nd Generation (Web-based Apps)
3rd Generation (Integrated)
Eligibility
Verification
Features: Systems interface with ADT systems
via direct connections. Benefits loaded directly
to ADT benefit screens or COLD fed to
document imaging systems.
Issues: Only 5 – 10 major payers per region
and payers control level of benefit detail. Much
phone verification is still necessary.
Features: Varied level of benefit detail.
Connectivity without IT setup.
Issues: Availability payer dependent. Multiple
sign-ons needed to access multiple websites.
No standard benefit format. No interfaces exist
to hospital ADT systems so duplicate data
entry necessary into ADT systems.
Features: HIPAA X12 demographics available as
well as USPS connections. Integration with ADT
systems available as well as alerts that
discrepancies exist. More payers available.
Issues: Too few organizations demanding 270 or
271 eligiblity transactions.
Address
Verification
Features: Some vendors begin to offer returned
mail analysis.
Issues: Expensive and inefficient. Much
rework needed. Otherwise,done manually via
patient ID, Haines Directory or “Department of
Corrections” returns
Features: Desktop address verification now
available via US Postal Service connections.
Issues: User dependent, no ADT system
integration – users not required to look up
addresses. Users not required to update ADT
systems.
Features: USPS and Lexis-Nexis validation
available. Integration with ADT systems
available as well as alerts that discrepancies exist.
Phone number validation now available.
Issues: Too many organization still using batch
verification after the registration encounter.
Features: Hospitals self-develop patient-pay
calculors based on charge master or DRG.
Issues: No integration with existing contracts
caused over-collection issues and refunds.
Collection limited to self-pay deposits and copays.
Features: Web-based patient pay calculators
now available for some services.
Features: HIPAA X12 benefits available realtime. Integration with contract management
systems to provide accurate calculations. Ability
to direct collect from calculation in real-time.
Issues: Too few organizations integrating
contract or charge master information
Features: Manual administration of policy by
“specialist” counselors using personal
judgment.
Issues: No integration with existing systems.
Status cumbersome to determine both for
patients and hospital stakeholders
Features: Financial counseling programs now
automated. Registrars can refer patients
electronically. Counselors work from referral
worklists.
Issues: No referral rules in place. Referral at
registrar discretion. Prone to audit fairness
issues
Features: Free-standing systems available with
hospital-defined edits.
Features: Ability to update systems based
upon user-defined rules.
Issues: Poor implementation due to PFS-only
focus on quality. No integration to ADT
systems for edits of updates.
Issues: Lack of comprehensive quality policies
lead to poor application ROI.
Data Integrity
Financial
Assistance
First Generation (Niche Apps)
Patient Pay
Calculation
Standard Front-End Application Evolution
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Issues: No integration with hospital ADT
systems.
Features: Assistance applications pre-completed
from ADT information. Referrals are rule-based.
Authorizations are rule-based
Issues: Too few organizations are aware of
current capabilities. Not demanding integration.
Features: Uses X12 eligibility transactions as
component of edit variance processes. Analyses
forms and data via imaging system integration.
Issues: Too few organizations are aware of
current capabilities. Not demanding integration
Top Collections Technologies
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Contact Verification
Eligibility Verification
Payment Estimation
Communication Management
Propensity-to-Pay Scoring
E-Cashiering
Financial Assistance Automation
Rule based Document Imaging
Self-Service Kiosks
Rule-based Process Automation
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Contact Verification
Contact
Verification
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Contact Verification
 Benefits
 Improves billing and
statement delivery, thus
increasing cash flow
 May detect multiple
identities or possible fraud including the identification
of social security numbers
for deceased persons
 Increases staff productivity
 Optional batch features
often offered (as options)
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Contact Verification
 The Old Approach
 Focus on address verification only
 Batch address checking done after the fact
 Features To Look For Now:
 Phone Number Integration
 Verify non-traditional phone numbers e.g., wireless, nonlisted
 ADT / Practice Management System Integration
 System highlights real-time discrepancies between
verification and host system
 System allows user to accept or reject changes after realtime discussion with patient
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Eligibility Verification
Eligibility Verification
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Eligibility Verification
 Benefits
 Verify coverage benefits prior to service delivery
 Submit patient information and receive real-time coverage
response
 Reduce or eliminate timely telephonic verification
 Reduce or eliminate cumbersome website verification
 Increase upfront collections
 Reduce rejections and denials
 Increase efficiency and staff productivity (reduce data entry)
 Improve patient satisfaction
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Eligibility Verification
 The Old Approach
 Proprietary, payer-specific eligibility formats
 Un-integrated website and telephonic verification prevalent
 Features To Look For Now:
 Normalized Benefit Formats
 Ability to design “standard” and “detailed” benefit screens
 ADT / Practice Management System Integration
 Eligibility and benefit information is mapped in X12 and
HL7 formats to ADT application
 Ability to send real-time HIPAA 270 eligibility transactions
and receive 271 responses
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Payment Estimation
Patient
Payment
Estimation
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Payment Estimation
 Benefits
 Reduce bad debt
 Increase collections
 Accelerate payments
 Cut costs for patient collections
 Ensure payment accuracy
 Increase payment certainty
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Payment Estimation
 The Old Approach
 Collection of co-payments and self-pay deposits only
 “Guestimates” rather than estimates
 Features To Look For Now:
 Charge Master/Eligibility System Integration
 Ability to apply benefits to real charges
 Charge Master/Contract Management Integration
 Ability to apply contractual allowances before developing
estimates
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Communication Management
Communication
Management
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Communication Management
 Benefits
 Increase productivity
 Reduce denials
 Increase successful appeals
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Communication Management
 The Old Approach
 No electronic record of payer communications
 Features To Look For Now:
 Call Management
 Automated calls, monitored calls, PC calls
 Fax Management
 Inbound and outbound faxed documents
 Web & Electronic Image Management
 Web-eligibility, e-mail, other electronic documents
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Propensity to Pay Scoring
Propensity to Pay
Scoring
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Propensity to Pay Scoring
 Benefits
 Streamline self-pay
approvals
 Limit unnecessary
outsourcing
 Identify risky elective
encounters
 Proactively identify financial
assistance candidates
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Propensity to Pay Scoring
 The Old Approach
 Subjective approvals by financial counseling staff
 Understated charity care on financial reports
 Features To Look For Now:
 Self-pay Funding Sources
 Available credit on credit cards
 Lines of credit and home equity
 External finance solutions offered by banks and other
lenders.
 Segmentation Analysis
 Customize scoring profiles to community characteristics
 Workflow Management
 Electronically forward accounts to financial counseling
process
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Electronic Cashiering
Electronic
Cashiering
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Electronic Cashiering
 Benefits
 Accelerates and increases collections
 Increases speed of payment capture
 Saves time by automating manual payment posting
 Increases staff efficiency by enabling more employees to accept
payments
 Improves customer service leading to enhanced customer
satisfaction
 Provides dashboard reporting of payment activity (ability to
track, audit and control all customer payments)
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Propensity to Pay Scoring
 The Old Approach
 Payments collected at only at time of service
 Reconciliation manual and cumbersome
 Features To Look For Now:
 Accept payments real-time from any location
 Any user desktop
 Patient payment web-portals
 Accept all forms of electronic payment
 Credit card, debit card, e-check, ACH transactions
 Cash Posting and Management
 Audit, track and control payments
 User/Department collection efficiency reporting
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Financial Assistance Automation
Financial Assistance
Automation
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Financial Assistance Automation
 Benefits
 Proactively identify eligibility to
entitlement programs
 Reduce unnecessary outsourcing
to self-pay vendors
 Improve charity/bad debt
classification
 Improve customer service and
community benefit reporting
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Financial Assistance Automation
 The Old Approach
 Manual application and subjective approval processes
 Reconciliation manual and cumbersome
 Features To Look For Now:
 Pre-populate applications from ADT information
 Medicaid applications
 Financial assistance applications
 *Integration with propensity-to-pay systems and e-pay systems
 Pre-define payment plans
 Presumptive eligibility and approvals
 Automate financial assistance rules and workflows
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Rule-based Document Imaging
Rule-Based
Document Imaging
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Rule-based Document Imaging
 Benefits
 Reduce unnecessary
copying and scanning costs
 Reduce denials related to
missing
referral/authorization forms
 Improve customer service
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Rule-based Document Imaging
 The Old Approach
 Repetitive copying and scanning of same documents
 Features To Look For Now:
 Rule-based Scanning
 Prompt users to scan required documents
 Drive prompts by document type, last date scanned, etc.
 Optical Character Recognition Mapping
 Compare insurance card information to ADT system fields
and correct data entry errors
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Self-Service Kiosks
Patient SelfService Kiosks
Seated Kiosk
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Self-Service Kiosks
 Benefits
 Reduced staffing
 Reduced check-in time
 Improved cash flow and
collections
 Reduced errors
 Improved customer service
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Self-Service Kiosks
 The Old Approach
 Staff check-in areas with increasing FTEs
 Inconsistent collection compliance
 Features To Look For Now:
 Date/time stamping of arrival
 Automated printing, armband generation
 Real-time payment processing
 Real-time eligibility verification
 Debit and Credit Card Processing
 Electronic signature capture
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Rule-based Process Automation
Contact
Verification
Communication
Management
Financial Assistance
Automation
Eligibility Verification
Payment
Estimation
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Rule-Based
Document Imaging
Propensity to Pay
Scoring
Electronic
Cashiering
Self-Service
Kiosks
Rule-Based
Process
Automation
Rule-based Process Automation
 Benefits
 Transformation of workflow
 Technology acceleration
 Vastly increased efficiency
 Expanded financial counseling
 Improved cash flow and
collections
 Improved customer service
 Eliminate whole categories or
errors
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Rule-based Process Automation
 The Old Approach
 Each application functions as a silo
 Information is copied or re-keyed into other systems
 Features To Look For Now:
 Full integration between all applications
 Ability to use multiple integration modes, HL7, scripting
 Ability to display scripts or registrar guidance
 Ability to build “action rules”- rules that execute actions based
on data from other applications – without registrar intervention
or prompts
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The New Math
The Formula for Transformation
Integration Between all
Applications
+
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Technology
Accelerators
Collections
Mgmt.
System Vision
+
Transformational
Performance
=
Conclusion
This presentation has demonstrated that a number of exciting collection
technologies have evolved over the last few years and they are already
lowering costs and improving services.
Contact
Verification
Financial Assistance
Automation
Eligibility Verification
Payment
Estimation
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Rule-Based Document
Imaging
Communication
Management
Propensity to Pay
Scoring
Electronic
Cashiering
Self-Service
Kiosks
Rule-Based
Process
Automation
Conclusion
However, organizations that hope to move beyond the incremental
evolution of the first three generations of applications to the transformation
of the fourth generation will need the vision to see the possibilities that
now exist and technology accelerators to integrate disparate solutions into
the seamless integrated “collections management system” that we have all
been waiting for.
Contact
Verification
Communicatio
n Management
Financial Assistance
Automation
Eligibility
Verification
Payment
Estimation
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Rule-Based
Document Imaging
Propensity to
Pay Scoring
Electronic
Cashiering
Self-Service
Kiosks
Rule-Based
Process
Automation
Summary
 In this session, we learned:
 The real costs of up-front collection avoidance
 How to move the collections process from customer
disaster to customer service
 The key collections technologies and the application
integration required to develop a comprehensive
“collections management system”
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Conclusion
Questions
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Contact Information
John Thompson, PMP, CHAM
Senior Consulting Manager
3 Christy Drive, Suite 100
Chadds Ford, PA 19317
(484) 798-5707 (cell)
(484)-840-1984 (office)
Toll Free: 866-840-0151
www.ima-consulting.com
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