Prioritizing Accounts Helps Sanford Health Lift Patient Payments by $2.1M
By transforming internal practices, revenue cycle leaders have reduced bad debt by almost 30 percent.
Leaders at Sanford Health, Sioux Falls, S.D., have implemented smarter patient account staff workflows and tools that help patients fulfill their financial responsibilities. Their efforts have helped the country’s largest rural, not-for-profit healthcare system realize a $2.1 million monthly improvement in in-house patient payments. Since 2015, Sanford Health has increased in-house payments by more than $66 million.
Improving Patient Payments at Sanford Health
Revamping Ineffective Workflows
Mike Beyer, senior director of patient accounts, oversees a 120-member team spread across four main business offices and other smaller worksites. The team includes 70 phone representatives, three managers, six supervisors, and a 10-person lead team that handles escalated calls. Approximately 30 representatives oversee correspondence related to financial assistance, patient payments, and other functions at Sanford Health’s 45 hospitals and 289 clinics.
For years, Sanford Health’s patient accounts representatives worked manually on accounts of more than $1,500. Accounts were sent into staff work queues and divvied up alphabetically—a process that did not maximize staff efforts. “If patients didn’t have the ability to pay, we were still calling and treating every patient equally, which was not allowing us to get through every patient on our list,” Beyer says.
In 2015, Beyer and his team implemented a payment optimization tool that allows patient accounts representatives to prioritize the patients most likely to pay. To reduce the number of manual calls, they also added an outbound calling system that automatically dials accounts with balances of $10 to $1,500.
“Previously, when we used a work queue to call patients, staff would be getting ready to call a patient and another call would come in. However, using an integrated dialer streamlined that for us,” Beyer says. The system prioritizes inbound calls but also allows staff to make outbound calls between inbound calls. “The patients who are calling in are the ones who are returning our phone calls and want to talk to us about payment, so prioritizing those calls is important,” Beyer says. However, once an outbound call is in the queue, an incoming call will not disrupt a representative.
By pairing a payment optimization tool with this dialing technology, patient accounts representatives automatically connect to the patients most likely to pay. Specifically, they score and segment individuals into five categories based on their propensity to pay. Patients who are scored with a “1” always pay, while patients who are scored with a “5” rarely if ever pay their bills.
Yet they also review patients’ estimated income levels, because some patients in segment 5 may have enough income to facilitate payment. “This helps us identify which patients to pursue in our outbound call campaigns,” Beyer says. Every six months, leaders at Sanford Health recalibrate the account segmentation as needed.
Reviewing patients’ propensity to pay and their estimated income also helps staff identify which patients to leave alone—specifically those who are in segment 1. “With this approach, we can steer clear of contacting the patients who would get upset if we contacted them because they always pay their bills, versus those that may need a little encouragement to pay their bills,” Beyer says.
When appropriate, staff also can reference income information to request payment from patients who have the ability to pay or offer financial assistance if patients’ financial circumstances have recently changed. The availability of this information helps staff follow the best approach for each scenario.
Maintaining External Payments
In addition to seeing an improvement in internal patient payments, Sanford Health’s third-party agencies have maintained a consistent level of performance, recovering 7.5 percent more payments to the organization even though they now receive 28 percent fewer accounts since the change in workflows and new technology.
“As part of the segmentation, our goal was to tackle the low-hanging fruit and get those accounts paid in-house before being sent to an agency,” Beyer says. “From a bad debt perspective, it was a win for us because no one wants to be sent to bad debt, and it did not affect our partnership with our agencies,” Beyer says.
Sharing Lessons Learned
Beyer provides the following best practices for organizations looking to increase patient payments and reduce bad debt.
Use compelling scripting during patient calls.Patient account representatives at Sanford Health direct the conversation by stressing the importance of balance resolution to patients, particularly those who have higher incomes. However, for patients who are segmented into lower-income categories, staff inform patients about financial assistance available to help them if they are struggling.
Revisit your incentives. Leaders at Sanford Health changed their incentive structure approximately six months after they implemented their scoring and segmentation model. Phone representatives can receive a percentage of their patient payments each week once they hit their target, provided they maintain high-quality standards. Lead teams, managers, and supervisors also can receive incentives if they reach certain patient payment targets or meet other key departmental goals.
To sustain their success, leaders recently rolled out team incentives for incremental improvements month over month. “We like to keep it team-based because it builds camaraderie and motivates everyone to help their co-workers,” Beyer says. They also award certificates and non-cash incentives, like food coupons, to recognize high performance by individuals, teams, or departments.
Make statements patient-friendly. In 2015, Sanford Health redesigned its patient financial statements to highlight amounts due and due dates. They also added a list of payment methods, ranked in order of preference: payment via the patient portal, the hospital’s website portal, phone, or mail. In addition, they added a message box on the front of the statement. Patients receiving their first statements might be notified that they qualified to receive prompt-pay discounts, which encourages patients to call in to determine discount amounts. Patients with balances going beyond the first and second statements may receive notices of payment as well as notifications on the availability of financial assistance.
Provide ongoing training. New hires on the patient accounts team at Sanford Health receive two weeks of classroom training, followed by a two-week preceptorship and two weeks of supervision from preceptors. After the training, new hires receive follow-up sessions 30, 60, and 90 days later for additional coaching. In addition, the department holds weekly and monthly training sessions with the entire team to address issues as needed.
Reducing Uncompensated Care
As part of the new workflows, patient account representatives qualify patients for Sanford Health’s presumptive financial assistance program if they are below certain income levels and have not paid their bills. As a result, Sanford Health has seen improvements in uncompensated care as a percentage of total revenue at each facility and for the organization overall.
Prior to implementing the segmentation model and the technology, bad debt comprised approximately 66 percent of uncompensated care, while charity care comprised 33 percent of uncompensated care. After they implemented the new processes and qualified some patients for presumptive financial assistance, Sanford has leveled the split to 48 percent bad debt, 52 percent charity care. “That’s where we hope to keep it,” he says.
Laura Ramos Hegwer is a freelance writer and editor based in Lake Bluff, Ill., and a member of HFMA’s First Illinois Chapter.
Interviewed for this article:
Mike Beyer is senior director of patient accounts at Sanford Health, Sioux Falls, S.D.
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