Self Pay Patients
Three Steps for Healthcare Providers to Reduce Self Pay Bad Debt Immediately:
- Start the dialog with patients early in the process. Providers who communicate with patients during pre-registration and scheduling, about co-pays and deductible set clear expectations regarding payments and efficiently identify those Self Pay patients who are entitled to financial assistance or who may qualify for charity care.
- Utilize services and tools to help with verification and eligibility for benefits. Many tools for effective, efficient revenue cycle management include determination for public assistance. To qualify patients for programs, patient access representatives provide the applications for Medicaid, and help in the application process. "Propensity to Pay" for self pay patients can also take place prior to service.
- Collect some form of co-pay, down payment, and deductible or make payment arrangements prior to service. Studies show that chances of collecting payment drop by as much as 60% after the first visit. Having the flexibility of multiple options of payment, increase your chances of collection, and reduce the percentage of self pay patient balances that end up as bad debt.
Classification of Bad Debt vs. Charity Care
While dealing with the complexities of the compensation system, providers must also check and classify their bad debt and charity care buckets. Accounting for each must not be co-mingled. Regulatory scrutiny over uncompensated care has increased, and the impact on healthcare providers has been significant. The IRS recently updated form 990 Schedule H to report and track uncompensated care expenses. Proper documentation of uncompensated care is required for most not-for-profit hospitals in order to retain their not-for-profit exemptions. Several associations representing the healthcare industry continually work with the IRS to simplify and define what constitutes charity care, but the bottom line is that hospitals will continue to be compelled to properly determine patient eligibility for charity care, how those cases are documented, and how they are reported to the IRS to avoid penalty assessments for non compliance or risk losing not-for-profit status altogether. Your hospitals ability to determine and classify those self pay patients properly allows you to collect co-pays and deductibles at patient access and reduce their likelihood of turning into bad debt. Additionally, proper documentation of charity care keeps hospitals eligible for their tax-exempt status.
Consider these changes, solutions, alternatives
By developing a holistic approach for self pay patients, you can address the primary cause for rising bad debt – increased patient financial responsibility – and improve your hospital’s financial performance. Numerous options are available to assist hospitals address these issues from reputable service providers that are often less costly and more efficient than providing these services with hospital staff. Partnering with a company such as NCO Healthcare Services gives hospitals flexibility to add services that are customized to fit specific needs with holistic strategies that can be developed and implemented in a timely and efficient manner.
About NCO Healthcare Services
NCO Healthcare Services is part of NCO Group, Inc. and focuses on meeting the revenue cycle management needs of more than 2,000 healthcare organizations. Providing services from first point of patient access through health information management and collections, NCO Healthcare Services consults with healthcare organizations to provide solutions customized to meet their needs. These customized solutions increase customer satisfaction, reduce self pay patients bad debt and increase financial return on investment.