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(HealthNewsDigest.com) – The environment for patient out-of-pocket amounts continues to trend negatively for providers, as high-deductible health plans continue to raise out-of-pocket expenses for patients. As shown in the Kaiser/HRET Survey of Employer-Sponsored Health Benefits 2006-2017 – Figure 16 below – the amounts of these receivables have risen 130% since 2008. It’s a trend creating economic hardship for patients who are now responsible for more of their healthcare bills than ever before. According to a Transunion Healthcare study, in the last year alone the average out-of-pocket amount patients must pay rose by 11% to $1,813.
Congressional leaders have complicated the issue by continuing to strip the ACA of cost-sharing subsidies, while restrictions on Medicaid are poised to add an estimated 14 million people to the ranks of the uninsured.
With continued growth in deductibles for insured patients, and much larger bills overall for those who will become uninsured, it’s easy to see a looming situation on the horizon where patients must find a way to resolve balances with a provider. That becomes especially challenging for providers when one considers the average patient struggles to find even $1,000 to pay for an emergency expense, according to Bankrate’s Financial Security Index Survey (January 2018) which showed only 39% of those polled could pay for a $1,000 emergency bill with their savings.
To add, recent changes in IRS 990’s reporting of bad debt and revenue, or Topic 606, will impact healthcare’s macro self-pay environment even further. These new rules will not allow providers to report bad debt on the amount billed minus the paid amount by the patient. Instead, providers will be required to report what the patient population has paid on average historically minus any payments they made. For example, if a patient was billed a $1,000 and historically the patient population only paid $100 and the patient only paid $50 of that amount then only $50 is reported as bad debt. Under the old rules $950 would have been reported in this scenario.
This change makes self-pay collection especially important because that average amount collected for the patient population must be as high as possible. Combined with a negative trend in self-pay balances, the challenge to focus on your collection process becomes even more important. Some steps to consider as you review your collection process:
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a solid segmentation strategy
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automation of non-resolution actions
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identifying any missing insurance to make sure self-pay accounts are truly self-pay
Be sure you take every step to find solutions that help you automate your process and maximize your resources, while bringing data together on a single platform. With the right tools and processes, you can be successful so you can maintain the highest average payment amount among your self-pay patient population.