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How Credit Score Data Can Improve Your Statement Processing Program

Posted by Brian Watson on Tue, Jul 24, 2012 @ 04:02 PM

statement processing programs should use patient credit score dataWith the tough, post-recession economy of the past few years still in a holding pattern, patients’ concerns about the cost of healthcare and their ability to meet financial responsibilities seem to be gradually intensifying. 

According to the Thompson Reuters Consumer Healthcare Sentiment Index (a monthly report describing patients’ changing healthcare financial outlook), Americans’ confidence in their ability to access, use, and pay for healthcare service healthcare reached a historic low in April of last year.

That sentiment is echoed by a 2011 Intuit Health survey, which claimed that 70% of patients are somewhat or very concerned about their ability to meet their healthcare financial obligations.

And while that’s distressing news for patients, it’s also a major challenge for healthcare providers, too.  That’s because the current number of patients without insurance is near an all time high (49.9 million in 2010, down just slightly from a record 50.7 million the previous year). 

Speed Self-Pay Payment with Patients' Credit Profile Information

In a financial environment this tricky, it pays (literally) to be relentlessly proactive in pursing self-pay patient payments.  That includes everything from financial estimation tools and point-of-service collection, to flat-rate care plans tied to a credit or debit card, to fast, efficient EBPP solutions

One other inexpensive-yet-impactful strategy: integrating credit scoring data into your patient statement processing approach for clients that might represent a financial risk. 

A patient struggling to make their self-pay contribution is more likely to pay late.  Or be sent to collections.  Or become bad debt.  Engaging patients early in the process with an action-inducing payment arrangement (based upon their credit history and to pay) helps jump start the payment process: accelerating receivables collection and reducing the amount of revenue that turns into bad debt.  

How It Works

The process works like this: patient demographic information is sent to a third-party credit monitoring bureau that provides an empirical assessment of their likelihood to pay according to credit profile and healthcare-specific characteristics.  Based upon that guarantor data (and using statement coding and an algorithm supplied by the healthcare provider), patients that have ability-to-pay issues are offered one of several payment plan options with the same mailing as their financial statement. 

For example, a credit score of less than 500 would qualify patients to receive a financial aid letter along with their patient statement.  While a credit score between 500 and 649 on a balance due of less than $2,000 prompts a proposed payment plan with specific terms to fit the patient’s financial profile to be added to the next statement printing and mailing run.  Additional tiers (and payment terms) can be established that further parse patients based upon the size of their outstanding balance and credit score intelligence.

Why It Works

That’s the how of patient statement credit score integration.  But why should you add the strategy to your patient statement processing repertoire?

1). It Accelerates Receivables and Enhances Cash Flow.  Being proactive in approaching patients with an at-risk financial profile at the beginning of the billing process helps ensure that they have the patient financial resources and counseling they need to make a timely payment.  That, in turn, helps improve a number of financial metrics: reducing Days in A/R, enhancing and stabilizing cash flow, and preventing self-pay patients from slipping into a costly collections program. 

2). It Increases Patient Satisfaction.  No one enjoys being sent to collections.  Providing a flexible, progressive patient statement solution for consumers that might have trouble making a payment demonstrates empathy and compassion about a tricky (and potentially embarrassing) subject.  And it also helps ensure that your patient billing practices are truly as patient friendly as your treatment process.  That won’t necessarily show up on your balance sheet right away, but it can only have a positive effect on overall patient satisfaction statistics.

3). It Improves Revenue Cycle Performance without Adding Cost.  Credit score integration is a solid, low-cost alternative to overly assertive (and expensive) early-out programs.  In fact, many providers are already using credit scoring and related financial profile intelligence to help with day-to-day patient accounting operations.  One other benefit?  Because patients receive your traditional financial statements along with their plan, brand equity isn’t sacrificed (like it is with most early-out and collection letter programs).

If you’re interested in learning about even more smart, efficient, and really productive ways to improve your patient statement processing practices, download our free statement printing and mailing best practices whitepaper.

EBPP?  Patient Treatment Memberships?  Early Out Programs?  What progressive patient payment strategies has your organization had success with?

Tags: Statement Processing, Statement Printing and Mailing, Self-Pay Patients

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