FINANCIAL COUNSELING BEST

PRACTICES

May 17, 2013

AAHAM SPRING MEETING

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FINANCIAL COUNSELING BEST PRACTICES

Learning Objectives Describe the difference between “financial clearance”

and “financial counseling” Describe financial screening and counseling KPIs Understand the difference between “front-end” and

“back-end” counseling Understand when the financial counseling process should

begin Identify key financial clearance policies and procedures Describe the financial counseling process Show why application integration and automation is

dramatically impacting the counseling staffing model

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WHAT IS FINANCIAL COUNSELING?

You still use the term “charity program” You don’t determine patient payment responsibility

prior to service delivery for walk-in patients? Only certain employees are assigned to determine

patient payment responsibility? The person who does estimates or insurance

verifi cation is called a “fi nancial counselor”? Your “counselor” sometimes strays outside of your

written guidelines when approving fi nancial assistance?

You have a backlog of patients awaiting Medicaid approval so fi nancial assistance decisions are delayed?

Your counseling process has little integration or automation? Form completion is manual?

Does this sound like your organization?

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PERFORMANCE METRICS

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KEY PERFORMANCE INDICATORSCategory Standar

d

Collection of elective services deposits prior to service 100%

Collection of IP patient-pay balances prior to discharge > 65%

Collection of OP patient-pay balances prior to service > 75%

Collection of ED patient-pay balance prior to discharge > 50%

Screening of uninsured and underinsured patients for financial assistance > 95%

Payment arrangements for non-charity eligible patients > 95%

Prompt-payment discount percentage(s) 5-20%

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WHAT IS FINANCIAL COUNSELING?

How many in this session feel that you don’t have enough financial counselors to meet the key performance targets we just reviewed?

What if you were told that if you have 2 or 3 dedicated counselors, you probably have more than enough?

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WHAT IS FINANCIAL COUNSELING?

At many healthcare organizations, the answer to this question depends on the person or department that's asking….....

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“The way we see the problem is the problem”

Stephen R. Covey

WHAT IS FINANCIAL COUNSELING?

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DEFINITIONS

Self-Pay

Financial Clearance

Financial Counseling

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WHAT IS SELF-PAY?

Self-Pay • (Also referred to as

Patient-Pay)- That portion of the bill that is to be paid in part or in full by the responsible party from their own resources, as it is not payable by a third party (i.e. insurance carrier).

• This means that “self-pay” no longer simply refers to patients with no insurance coverage

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WHAT IS FINANCIAL CLEARANCE?

Financial Prerequisites (Financial Clearance) Assuring that all the

appropriate payers have been identified and requirements have been meet, and their has been communication with the patient about their financial obligations prior to service Source: NAHAM Patient

Access Continuum – CHAA Study Guide

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WHAT IS FINANCIAL COUNSELING?

Financial Counseling A “step in the billing

process during which credit is extended to self-pay patients”Michael Nowicki, The Financial Management of Hospitals and Healthcare Organizations

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WHAT IS FINANCIAL COUNSELING? Financial Counseling: A means of

providing financial education to help the patient understand his/her insurance coverage and financial responsibility for healthcare services

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WHAT IS FINANCIAL COUNSELING?

Financial Education components include: Informing the patient

of the hospital’s financial policies

Assessing the patient’s ability to pay

Reviewing payment alternatives

Achieving account resolution by helping the patient satisfy his or her payment obligations

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WHO IS RESPONSIBLE?

Financial counseling duties may be assigned to:General registration

personnelInsurance verification

specialistsDedicated counselors

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WHO IS RESPONSIBLE?

Counseling prior to billing:SchedulingPre-registrationWalk-in registrationEmergency

DepartmentScheduled

proceduresDecentralized

departments

Counseling after billing:Late paymentsDenied claimsQuestions or

dispute resolutionBad debt issuesBankruptcies,

Liens, etc.

Patient Access Counseling

Patient Accounts Counseling

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WHEN DOES COUNSELING START?

Tip: Since financial counseling situations will usually arise when patient payment responsibilities are identified, it is critical that access management personnel are prepared for their role in the financial counseling process.

Examples include: An uninsured patient wishes to receive services An underinsured patient is made aware of payment

responsibilities A managed care patient wishes to have unauthorized

services A Medicare patient wishes to have services deemed

medically unnecessary by national or local coverage determinations (NCD/LCD)

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WHEN DOES COUNSELING START? Tip: It is less costly for our customers

and our organizations if we collect self-pay or “patient pay” dollars prior to service, at the point of service or at discharge.

If “patient pay” dollars are not collected at the point of service or discharge, the cost-to-collect providers incur can range from 4% to 10% of the balance.

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Cost-to-Collect

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PAYMENT RESPONSIBILITY

A patient’s responsibility for payment begins on the date that services are rendered. Successful organizations set this expectation during the registration process before services are delivered.

How? By educating the patient on your financial policies!

When does payment responsibility begin?

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FINANCIAL PRACTICES POLICIES

Financial Practices policies of healthcare organizations should clearly state that:

Payment is expected on the date of service and

Emergency care will be provided without regard to a patient’s ability to pay

Financial assistance is available if you cannot afford to pay

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PATIENT FINANCIAL EDUCATION

Screening

Financial Practices

Financial Clearance

Verification of Payer Coverage

Up-Front Collections

Financial Screening:Activities an organization engages in to establish patient payment responsibility

Financial Counseling Policies

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PATIENT FINANCIAL EDUCATION

Counseling

Financial Assistance

Payment Plans

Waivers of Co-Payments and Deductibles

Self-Pay and Bad Debt Processing

Financial Counseling Policies

Financial Counseling:Activities an organization engages in to help patients meet their financial obligations

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PATIENT FINANCIAL EDUCATION

Screening

Financial Practices

Financial Clearance

Verification of Payer Coverage

Up-Front Collections

Counseling

Financial Assistance

Payment Plans

Waivers of Co-Payments and Deductibles

Self-Pay and Bad Debt Processing

Financial Counseling Policies

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ACCOUNT RESOLUTION

Account ResolutionInvolves

reviewing payment options in a controlled, sequential manner to move the patient to an acceptable resolution of the financial obligation.

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ACCOUNT RESOLUTION

Counseling Sequence

1. Greet the patient2. Review your financial

policies3. Review insurance

benefits if any4. Review expected

charges and calculations5. Review payment options

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ACCOUNT RESOLUTION

Payment OptionsFull payment no later

than the date of service

Short-term payment plans

Bank loan programsGovernment programsFinancial assistance

program

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ACCOUNT RESOLUTION

Payment OptionsFull payment no

later than the date of service

Including:CashCheckCredit CardElectronic Funds

TransferDate-limited

Prompt Pay Discount

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ACCOUNT RESOLUTION

Payment OptionsShort-term

payment plan

Features:Monthly paymentsInterest-freePlans are based on

propensity-to-payTimeframes don’t

crossover into bad-debt criteria

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ACCOUNT RESOLUTION

Payment OptionsBank Loan or

other Credit Programs

Features:Payment made

directly to hospital up-front

Patient maintains payment schedule with lending entity

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ACCOUNT RESOLUTION

Payment OptionsMedicaid

Eligibility

Design Options:Onsite state or

county workersOutsourcing FirmsInternal referrals to

state or county assistance

Streamlined process includes “presumptive approvals”

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ACCOUNT RESOLUTION

Payment OptionsHospital Financed

Assistance

FeaturesSliding scale

discounts% of Federal Poverty

GuidelinesUse of term “charity”

eliminatedStreamlined process

includes “presumptive approvals”

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FINANCIAL ASSISTANCE AUTOMATION

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A NEW DAY

Healthcare organizations are using a plethora of technologies to reduce costs and improve service delivery. When implemented as stand-alone applications as has often been the case with financial assistance applications, these organizations are experiencing bottom-line improvement. However, when implemented as components of a well-considered revenue cycle vision, the overall results can be greater than the sum of individual parts.

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APPLICATION EVOLUTIONApplications have evolved alonga fairly predicable path

While progress has occurred at every level,

transformation of work processes has been elusive

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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FINANCIAL ASSISTANCE AUTOMATION

BenefitsProactively identify eligibility

to entitlement programsReduce 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 36

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THE VISION DILEMMA

“We don't see things as they are, we see them as we are.”

Stephen R. Covey

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A 4TH GENERATION VISION

Scheduling

Physician Self-Scheduling:

Clinical pre-cert edits applied

Patient Self-Scheduling:

Financial Screening edits

launch

Pre-Registratio

n

Automated home & email

address confirmation

Automated home & cell

phone verification

Eligibility

Scheduled service is verified: Payment

responsibility is determined

Automated estimate is instantly prepared

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A 4TH GENERATION VISION

Payment Calculatio

n

Instant-estimate includes

contract rates and site-specific

discounts

Pop-up patient-friendly

collection scripts available to registrar or

online to patient

Propensity-to-Pay

Propensity to pay determined using SSN, DOB

and contact information

All categories pre-approved

but “Can afford to pay but

doesn’t category”

Financial Counselin

g

Technology & scripting allow registrars to handle most

scenarios

Financial counseling

sessions auto-scheduled for

exceptions

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A 4TH GENERATION VISION

E-Cashiering

Payment estimates flow directly to e-cashiering application

Online pre-payment

processing for credit cards, e-

checks

Self-Payment Options

Patient is presented with pre-established payment plan

options

Patient may route directly to

a financial counselor (FC)

Exception Manageme

nt

Patients triggering site-defined edits, e.g., bad debt history, auto-route to FC

FC determinations auto-approve or auto-route for

manager approval

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THE NEW MATH

Transformational Performance

+ =+

Technology Accelerators

4th Generation

Vision

The Formula for Transforming the Financial Counseling Vision

Integration Between all Applications

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QUESTIONS?

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CONTACT INFORMATION

John Thompson, PMP, CHAM, CRCR

Principal, Access Management and

Technology Innovation Services

jthompson@coalitionrc.com(301) 802-3078