Money is the most sensitive subject for patients and the No. 1 reason why they drop out of care. With health insurance benefits getting worse by the day and "Obamacare" deductibles of $5,000 to $10,000, more and more practices need to know how to collect high co-pays, big deductibles and cash (without losing patients) to thrive in the new health care economy.
Patient Finances Are Part of the Healing Process
Patients who owe money do not get well. A study by dentists looked at why some patients' dentures fit, while others did not. They discovered patients whose dentures were paid for were happy with them. If people owed money, their dentures never fit! When a patient goes to a doctor, an unspoken deal is made. The patient thinks, "I will pay a certain amount of money and the doctor will get me well." If the patient pays and doesn't get well, the patient will be upset and the doctor will hear about it.
On the flip side of the coin, if the patient does not pay, in his mind, he is breaking the deal. If the patient gets well without paying, he is being dishonest and does not want to feel this way. For this reason, the patient won't allow himself to be dishonest and won't "get better."
Practices that handle finance well understand its important role in helping patients to get well. Most practices think in terms of either cash or insurance. Start being open to the possibility of both. Saying yes to all types of payment options helps keep your cash flow positive and consistent.
Know Your Cost to Deliver a Visit
When setting your fees, you can lay a strong foundation by calculating the amount of your cost to deliver a visit (CDV). Knowing your CDV enables you to make prudent decisions for your practice. Failing to know your CDV may cause serious financial detriment. Your CDV is the amount it costs you to deliver an office visit. It is not financially feasible to offer patients payment arrangements that fall below this amount.
Determine your total practice overhead for a given time period (month, quarter or year). Include your salary or bonuses. CDV = total overhead expenses ÷ number of patient visits delivered during the same period. For example: $20,000/500 = $40, meaning it costs the practice $40 every time it sees a patient! If you fail to collect $40 for an office visit, it is like putting money in the patient's pocket. Volume will never make up the deficit.
When deciding to join a managed care organization, if the MCO's reimbursement rate is far below your CDV, increased patient volume won't make up the loss. If the MCO's rates are close to your CDV, it may be a good choice to go in-network, as most overhead expenses do not rise at the same rate as patient volume.
In some areas, one or two MCOs dominate the health insurance market. Being out of network can place your practice at a competitive disadvantage. In this case, consider ways to make joining financially viable by reducing overhead. However, you'll never have the decision-determining information without calculating your CDV.
Manage Each Patient's Finances From Visit #1
Patient financial management begins on the very first visit. Know each patient's responsibility with regard to payment from day 1. Whenever possible, obtain the patient's insurance information before his first visit. Always make a photocopy of the patient's insurance card and photo ID. When possible, verify insurance coverage before the patient is treated. Make sure the front-desk CA knows exactly what to collect from each patient on their first visit.
When a patient leaves the office without paying on the first visit, you are setting a precedent that will be difficult to recover from. You may be the finest physician, but fumble the finances and the patient will flee!
Make Care Affordable
Paying by the visit is the least effective way for a patient to pay for services. Each time patients must open their wallet, purse or checkbook to pay, they can make the decision to drop out of care. Paying for visits on a payment plan is a much better alternative when allowed by state law.
Offering patients a payment plan alleviates stress from the front desk because the schedule of collections has been taken care of in advance; no more chasing after patients for their payments. Plus, when patients on payment plans miss their office visits, they phone you to reschedule instead of you having to hunt them down!
When payments are broken into budget-sized amounts, patients are most likely to accept a complete care plan. Focus on each patient's needs (medical necessity) and based upon your insurance verification: amount of deductible, amount of coverage, supplies or ancillary procedures, and wellness care needs.
Have a written policy for how your practice handles patient finances that lays out the ground rules. Have patients sign it on their first visit. If a patient requests special financial privileges, be sure your practice team members can quote the "office policy" as the reason they can or cannot comply with the request.
Avoid Dual Fee Schedules
In an effort to make care affordable, many chiropractors extend discounts and free services to their patients. Health care law requires that you follow the rules and adhere to a written fee schedule. Not doing so could place you in legal jeopardy. At no time may you offer identical services for different prices. You must be sure your fees are reasonable and customary for your community.
For uninsured, underinsured or partially insured patients, like federal plans, you can offer your patients discounts by becoming a provider for a Discount Medical Plan Organization (DMPO) designed with chiropractors in mind. The right DMPO enables you to create a legally compliant fee schedule for your underinsured and uninsured patients that are below your normal and customary fees for insurance. Patients join the plan for an annual fee and you contractually agree to provide services at a reduced rate to members of that plan.
Once you have joined a DMPO and set your discounted fee schedule for under- and uninsured patients, when a patient still can't afford care, you have another option. You can establish a financial hardship policy. In order to do so, you must establish hardship criteria. Many practices use the federal poverty guidelines as one criterion. Be sure that the patient meets your criteria and do not offer blanket hardship allowances to more than those truly in need.
Include a Financial Report of Findings
The financial report of findings may be the missing piece to mastering patient finances in your practice. You must communicate effectively about the financial options available to your patients. Your patients must know what plan of treatment has been recommended for them, and will be concerned about how much care will cost, and whether their insurance will help cover the expense. When patients' finances are estimated in advance, stress is alleviated from the front desk.
Patient finances should be discussed on the second office visit, after you have delivered your chiropractic ROF. The team member communicating the financial aspect of care should not be averse to doing so. Assign a team member to this role who is a good communicator, who is firm, but polite; and who can effectively explain the patient's coverage (or lack of coverage).
If not performed by you, the doctor, the financial ROF can be conducted by a "finance counselor." The finance counselor is the point person who makes sure the financial agreements are understood by the patient. At no time should any practice team member, especially the doctor, try to change any financial agreements previously made. Every team member must refer the patient back to the finance counselor when the topic of that patient's financial agreement is raised.
The Financial ROF: Step by Step
The financial ROF should take place away from the front desk. It is never a good idea to have a patient discuss such a private matter within earshot of other patients who may be in your reception area. Select a quiet, private room where patients can feel comfortable discussing their finances and can be assured of privacy.
During the financial ROF, the finance counselor should guide the patient through a written financial estimate, based upon the doctor's recommendations for care, in a step-by-step manner and provide him with his financial options. The counselor should make sure the patient doesn't have any questions concerning finances before you close the ROF. Obtain the patient's agreement and collect the credit card, auto debit or other form of payment; then close the consultation by congratulating the patient on his decision to receive care.
The Financial Follow-Up
Nothing is as frustrating as patients who drop out of needed care because they were confused or concerned about finances. After completing the financial ROF with a patient, when there is insurance involved, schedule a follow-up meeting with the financial counselor in about a week. You should be sure the patient is in minimal pain during this meeting. When patients are in pain, their ability to remember is impaired. This may have occurred during the initial financial ROF.
During the financial follow-up phase, the financial counselor should re-introduce herself, including her title as "financial counselor." This helps set the tone as a formal meeting. Remember, the patient may not remember the counselor's name from the financial ROF. Make sure the financial counselor lets the patient know she's there to assist him. The financial counselor is the patient's ally in making sure the insurance company fulfills its obligation.
The financial counselor should tell the patient how often she will submit claims to his insurance company, and show him a HCFA insurance billing form so he can become familiar with it. Many patients have never seen one and are unfamiliar with what your practice will do on their behalf to collect. Your financial counselor should explain it is possible that an insurance check could be sent to his home address in error.
When accepting assignment, the counselor should make sure the patient knows to immediately bring any insurance checks to her specifically. That way, the payment can be applied to his account.
The financial counselor also should show the patient several HIPAA-scrubbed examples of Explanation of Benefits (EOB) from the various insurance companies. She should tell him that he may receive EOBs at home, and that he should bring them into the office so you will have a copy for his file. Your financial counselor should assure patients that your team will answer any questions they have about the information on the EOBs; and reiterate that the counselor specifically is there to be of assistance for any financial concerns.
Finally, your financial counselor should let the patient know she, as well as other practice team members, will respond to any requests for information from his insurance company in a timely manner.
Master Patient Finances
Doing a great job with patient finances frees you to encourage patients to complete their journey through acute, corrective and rehab care. As a result, you will help them attain a state of health worthy to maintain in the wellness phase. Prepare patients early on for maintaining their new level of health and protecting their financial investment.
Successful chiropractors feel great about recommending the care their patients truly need and charging for it. Increased treatment acceptance and patient satisfaction, along with reduced accounts receivable and improved cash flow, are the benefits that come from mastering patient finances.
Dr. Mark Sanna, a 1987 graduate of New York Chiropractic College, is a member of the ACA Governor's Advisory Board and a member of the President's Circle of NYCC and Parker College of Chiropractic. He is the president and CEO of Breakthrough Coaching (www.mybreakthrough.com).