Strategies to Prevent Patient Bad Debt in Revenue Cycle Management 

Are you encountering difficulties in recovering medical bills from patients? If your patient is financially stressed and unable to pay the medical bill at the time of service, the payment gets delayed. Delayed payments end the long-term relationship between the patient and the provider.  

So medical health care providers and insurance providers must know how to collect the patient’s balance without hurting the long-term relationship. The following strategies may help the health care institutions to receive payment from the patients without putting much pressure and stress.  

  • Financial transparency
  • Payment Plan  
  • Credit Card payments  
  • Outsourcing to Billers.  
  • Front Office staff training  
  • Upfront Payment options.  
  • Outstanding Bill Payment Reviews  

Prevent bad debt in RCM

1. Identify your Patient’s ability to Pay:

An analytics tool can determine if a patient is unable to pay. If so, you can capture $100 as a deposit and offer a payment plan for subsequent payments. If this strategy is successful, it will benefit both the patients and the provider. You will also increase your revenue without having to charge the patient more money upfront. This way, you can prevent patient debt while still providing excellent care.  

2. Keep Track of Collection Rate in Revenue Cycle Management:

A key revenue cycle management indicator is the clean claims ratio, which represents the percentage of claims paid directly by the payer. This ratio is an important measure of how well your revenue cycle management strategy is working. If your clean claims ratio is less than 80 percent, your organization will experience many rejections and denials. The goal should be a minimum of 90 percent. Below that level, you should take steps to improve your process. 

Another important metric is the charge value. The charge value is calculated as the charges minus any contractual adjustments. This measurement is helpful in identifying revenue lost due to non-contractual adjustments. The amount of reimbursements is directly related to the payer mix, specialty, automation, and other factors, including inappropriate write-offs or not having access to all fee schedules. Nevertheless, gross collection rate is not a useful metric in determining revenue cycle management. 

Use a metric to track the net collection rate. This metric reveals whether a practice is collecting reimbursements or not. Using it will allow you to identify where to improve and limit non-contractual adjustments. Net collection rates are crucial to the Revenue Cycle Management process. To calculate your net collection rate, you can use aged data. In addition to calculating the gross collection rate, you can also use a net collection rate calculator. 

In addition to revenue collections, revenue cycle management also involves the tracking of a number of performance indicators. Tracking these metrics regularly can help you gain a better understanding of the performance of your practice. Poor collection rates can result in decreased profits and reduced profits. Therefore, it is imperative to understand these metrics and how they relate to your practice’s financial goals. However, if you don’t know how to measure these metrics, consider hiring a revenue cycle management service. They can ensure your organization’s profitability and provide excellent care.  

3. Eliminate Paper Billing: 

Paper billing is still an option for some practices, but they may not see the benefits of digitizing their billing processes. You can digitize your financial process to be innovative and effective. The proactive RCM pathway eliminates paper billing. You can also introduce electronic payment options to make paying your bills convenient. The process gets simplified for patients. These are only a few strategies to prevent patient debt in RCM.  

4. Improved Patient Engagement:  

Improved patient engagement is another key component of effective revenue cycle management. Having a dedicated team working to create a strong relationship with patients can increase the chance of reimbursement . Your staff should also explain to patients their financial responsibilities, payment options, and what they can expect from a visit. Often, a patient will view the billing process as complicated, so the more time you spend with them, the more likely patients will be reimbursed for their medical care.  

5. Appoint Financial Counselors: 

Taking action to collect payments is the best way to avoid a crisis. Patients are increasingly responsible for their health care, and high deductible health plans require patients to shoulder a greater portion of their medical bills; however, patients don’t like to pay for the services in advance and may feel like it is high pressure to avoid this provider should request payment in advance before the treatment is provided, and dedicate time to follow up on unpaid accounts. Patient education is key to preventing patient debt.  

6. Improved Communication:

Improved communication between billing staff and patients is also vital. You can avoid confusion and improve the entire experience by clearly communicating patient expectations. Furthermore, you can provide your patients with established payments before their procedures, which is critical to patient satisfaction. If you are serious about patient retention, it is essential to improve patient communication. These are some strategies healthcare institutions follow to prevent patient debts.  

7. Payment Options: 

Another important step in maximizing collections from patient billing is to offer your patient several payment options, such as credit card or debit card, and visual checks from their checking or savings account. According to a recent survey, 89 percent of US adults use smartphones, and 60% of them cannot imagine their lives without their phones. Providing an easy-to-use online payment option for your patients can increase the collections and reduce the patient’s bad debts. As a health care practice, collecting what’s owed to you is essential. A third of your practice is dependent on A/R, and it is comprised of patient due amounts. If only one-third of these dollars are collected upfront. Improving upfront collections can increase total payments and decrease time spent in the A/R. Once a patient leaves without resolving an expected amount, your chances of receiving full payment decline by 50%.  

Wrapping up:  

There are many strategies to prevent patient debt. The first step is to ensure that patients do not have unpaid balances. If you don’t collect this, you will likely lose revenue. Fortunately, there are ways to improve patient experience and maximize reimbursements. In addition, you can use drachma to enhance processes and track building requirements. By adding these to payer requirements, you can prevent claim denials.  

Lastly, proactive patient communications are crucial. By providing clear and concise information about their accounts, patients will be more likely to pay their bills. If a patient is unsure about their coverage, explain the process clearly and offer payment options that are convenient for them. Moreover, verifying insurance coverage is also helpful in speeding up payment. Ultimately, patient satisfaction and retention are the top priorities of any healthcare provider. Contact MHRCM for streamlined revenue flow to your healthcare system. 

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