Not long ago, it was customary to receive treatment in the ED and leave without being asked to pay any portion of the bill. Typically, patients would receive a copy of the bill sent to the insurance company a few weeks later. Then, after the insurer paid its portion, the hospital would send the final bill to the patient requesting the balance.
For hospitals, this put significant financial and operational stresses on the ED for collecting from payers and patients—a process that took weeks or even months. As a result, the long collection cycle negatively impacted cash flow and gave the ED a reputation as a money-loser. For patients, the process was time-consuming and confusing, as many did not understand their financial responsibility for a portion of the bill until weeks after receiving treatment.
Today, this scenario is becoming far less common as more hospitals across the nation implement point of service collection (POS) technologies and strategies in the ED and across their facilities. For example, in North Texas, Cook Children’s Hospital in Fort Worth is among the growing number of facilities providing consumer-friendly kiosks at checkout, allowing parents to make payment against the estimated patient balance before discharge.
An estimated half of the nation’s hospitals now charge upfront fees for ED visits, according to the Healthcare Financial Management Association. That number will likely rise in large part due to the increasing adoption of high-deductible employer health plans that put greater responsibility for paying upfront costs on patients in exchange for lower premiums.
POS collection provides patients with a clearer understanding of their financial obligations and more options for paying their portion of the bill. Both hospitals and ED physicians benefit from a more predictable cash flow, while reducing the amount of bad debt sitting on the books and curbing collection costs.
However, hospitals still have a ways to go to achieve the full benefits of POS collection. In one survey, seven out of 10 healthcare financial professionals reported that their hospitals or health systems collect less than 30 percent of patient balances upfront.
In order to improve POS collection rates, ED physicians must become more engaged in the billing and collection process to ensure the hospital collects upfront payments for the facility as well as for the professional services they provide.
Studies show that the biggest barriers to POS collection remain the challenge of determining what the patient owes and preparing staff to ask for payment. Fortunately, new technologies are making it possible to estimate with far greater accuracy what the patient owes to the hospital and ED physicians for the unscheduled care they receive.
Hospitals must also train and coach their front-line staff to make the POS collection process as efficient, consumer-friendly and accurate as possible. At the same time, billing and collection companies should be evaluated and monitored to ensure their delivery of the desired results complies with applicable regulations and health system policies. In particular, facilities must be careful to avoid the aggressive collection policies that have subjected some providers to state and federal investigations and million-dollar settlements.
Clear POS collection policies should be put in place that will assure compliance with the federal Emergency Medical Treatment and Active Labor Act (EMTALA), which prohibits providers from asking for payment before medically screening patients. For emergent patients, for example, it is prudent to ask for no money until discharge. For urgent patients hospitals can consider asking for co-payments, deductibles and deposits after the medical screening exam and before discharge. Finally, non-urgent patients can be informed after the initial medical screening exam that they will need to make a payment before receiving more treatment in the ED.
Across the country, hospitals who have implemented POS collections will assert that the benefits of POS collection far outweigh the difficulties of implementing the processes. But providers must guard against questionable collection practices that can cross the line from a regulatory and ethical perspective. I am optimistic that by implementing the proper technologies, policies and training to support POS collection, hospitals and health systems in the near future will be more proficient realizing improved and timely collection from a growing population of self-pay patients.
— Sunny Sanyal is CEO of Dallas-based T-System Inc.