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Case Study | Patient Financial Communications

Revamping patient engagement and collections — digitally

Case Study | Patient Financial Communications

Revamping patient engagement and collections — digitally

During the HFMA Digital Annual Conference 2020, select companies presented 10-minute case studies around solutions that are driving improved performance in healthcare revenue cycle. Here, four organizations share their approaches and the results achieved.

How Banner Health Uses Augmented Reality to Drive Patient Financial Engagement

Imagine if simply scanning a QR code on a hospital billing statement could give patients instant access to an avatar that could explain each aspect of the statement in detail, from the portion paid by insurance to the amount and date that a patient payment is owed. At Banner Health, it’s an approach that launched in November 2019 and drives increased patient financial engagement.

Developed in partnership with Avadyne Health, the patient concierge app, with an avatar named “Eve,” was designed to engage patients in their financial responsibility for care in a new way. “We embarked on a monetization journey in 2018, taking a look at opportunities to improve revenue cycle performance, and one of the things we considered was how to anticipate patients’ needs and engage patients in the way they wanted to be engaged,” said Bradley Tinnermon, vice president, revenue cycle and revenue integrity for Banner Health. “Augmented reality took patient engagement to a new level, allowing patients to engage with us in a way that felt like a human interaction without having to call customer service.”

Banner Health is the first health system in the nation to implement augmented reality for patient financial engagement. In the first eight months of use, 1,605 users across 39 states downloaded the app, with 5,044 “statement taps” to review patient billing statements. Among those who use the patient concierge app, 92% pay their bill through the app. Just 9% call customer service after using the app. “This is very different from the traditional percentages we see for payment and customer service calls,” Tinnermon says.

The approach especially appeals to younger generations, with Gen Xers and Millennials comprising 80% of users. Usage is almost evenly split by gender across generations.

This summer, a second health system adopted this approach. “This is a great way to leverage the technology we already have on our smartphones to modernize the patient experience—particularly the patient financial experience,” says Jayson Yardley, CEO, Avadyne Health.

UPMC Simplifies Patient Refund Payment Processing Across the System

Patient refunds are rising, in large part due to increased patient responsibility. In 2018, 13% of patients received a refund; by 2022, this percentage is expected to increase to 15%, with total refund transactions soaring from $51.3 million in 2018 to $56.5 million in 2022, according to a November 2019 Aite Group report.

“This is bad news for many providers, because the system they currently have for processing refunds is inefficient, incomplete and largely paper-based,” says Mike Sweeney, vice president, relationship manager, BNY Mellon Treasury Services. “Research shows 83% of patient refund payments are distributed in a non-electronic manner. The outcome is a negative patient experience in which patients are chasing funds that are owed to them. When they do receive payment, it’s often in paper check form, which causes them to have to take another step in receiving their money through check deposit.”

UPMC, comprising 40 hospitals and 700 physician offices, issues about 120,000 refunds annually across multiple billing systems. Its check template provided inadequate space for refund explanations to patients and payers, requiring UPMC to send explanation of benefits attachments that needed to be printed manually. As a result, turnaround times from payment release to consumer receipt could take as long as 10 days, resulting in an increase in patient and payer inquiries.

UPMC decided to revamp its refund process to a highly digital approach, adding the option of BNY Mellon Tokenized Payments® with Zelle®, which delivers refunds directly to the patient’s checking account without the need for bank account information. The health system also continues to offer paper checks for patients and insurers who opt for this form of payment. UPMC worked with BNY Mellon to outsource refund processing needs, a highly manual task with great administrative expense. This solution eliminates manual and time-consuming tasks by enabling all or part of the entire refund process to be outsourced to ensure business continuity, inject efficiency and incorporate secure payment systems that help deter potential fraud. UPMC also created customized multiple templates for checks that enable staff to add a message of explanation, reducing calls to customer service.

“We ended up with a process that is reasonably efficient and very standardized across many subsidiaries,” says Linda Zang, assistant treasurer, UPMC. “The process has expanded beyond patient refunds to include any situation in which funds need to be returned to a consumer and where an IRS-1099 form is not needed, such as tuition, pharmacy, member and rent refunds.”

As the health system introduces the Zelle payment option, “We believe this will be a popular option, especially with younger consumers,” Zang says.

Reducing Days in A/R — Even Amid the Pandemic — at Adirondack Health

At Adirondack Health, a 160-bed, not-for-profit hospital in Saranac, New York, a revenue cycle optimization project that sought to increase days cash on hand while reducing costs has had strong dividends during the coronavirus pandemic.

The initiative reduced days in accounts receivable (A/R) by 20% in 2019, with low days in A/R maintained during the first months of the pandemic, when the state experienced a surge in coronavirus cases and elective procedures were delayed. Meanwhile, a contract management system quickly identifies underpaid claims and positions Adirondack to capture payment.

In 2019, Adirondack worked with TruBridge to implement a best-of-breed revenue cycle management product that would increase staff productivity, with user-friendly workflows and robust reporting capabilities that would give leaders greater insight into opportunities for improvement. The product integrated seamlessly with the hospital’s EHR. It also features a denials management module with enhanced editing technology, the ability to push the right accounts to the right team member at the right time and additional bridge routines that support higher clean claim rates.

Robust reporting technology enables leaders to drill down into the root cause of denials, a move that helps focus the team’s efforts on denials prevention rather than denials management.

The results have been outstanding. Adirondack has:

  • Reduced denials by 40%
  • Increased paid claims by 22%
  • Recorded a first-pass clean claim rate of 97% — best-of-class in the industry
  • Recovered $174,000 in contract underpayments

“Our work with Adirondack over the past couple of years has led to tremendous efficiency gains in billing, audit tracking and appealing denied claims at a time when the complexity of claim processing has increased,” says Pat Murphy, vice president, TruBridge. “Managed care contracts alone can be very complex, and it can be difficult to determine when underpayments occur. With our automated solution, Adirondack identified one payer that had underpaid for two years and another that had failed to update the baseline rates in its system each year.”

A recent HFMA survey shows most hospitals and health systems believe 2020 revenue will be 19% lower than last year due to COVID-19. “Efforts such as these have helped Adirondack achieve its revenue cycle goals, even in a rapidly changing environment,” Murphy says.

Customizing the Collections Approach by Patient for Higher Engagement

When it comes to patient financial engagement, there is no “one-size-fits-all,” especially when 91% of uninsured out-of-pocket expenses and 56% of insured out-of-pocket expenses go unpaid, according to an ARxChange study.

“We’ve seen a 29.4% increase in patient responsibility around deductibles and out-of-pocket maximums,” says Juli Forde, director of strategic partnerships, ZOLL Data Systems. “Of particular note, almost half of Americans would be significantly challenged to handle a financial disruption of $400 — and many healthcare bills exceed that amount.”

COVID-19 increases the pressure to connect with patients to find the right payment approach that meets their needs. “Unfortunately, our traditional collection efforts simply are not reaping the benefits they once did,” Forde says. “We have more situations where patients are struggling with financial insolvency, especially during COVID-19. As a result, we need innovative strategies to better understand patients’ economic situation and how they approach their finances.”

During the HFMA Digital Annual Conference 2020, Ford and James A. Zadoorian, PhD, managing principal, ARxChange, shared a personalized approach to financial engagement that:

  • Determines whether patients who identify as self-pay might have access to coverage
  • Examines the patient’s credit history, payment history and demographic information to assess the probability of payment
  • Identifies the price point at which patients are likely to pay the highest proportion of their bill

Zadoorian used an analogy of Goldilocks breaking her ankle on the way to the bears’ den. “If Goldilocks has a $1,000 balance and a 10% probability of payment, the revenue expectation for the health system is just $100,” Zadoorian said. “But if a mathematical analysis shows her greatest probability of payment is $250 on a balance of $750, walking the balance back and requesting half of the amount she is most likely to pay — $125 — leads to a $25 increase in out-of-pocket revenue.”

While this may seem like a small amount, it adds up quickly. “If you fix the bill, you fix the problem,” Zadoorian said. Because this mathematically enhanced approach to tailored discounting is applied equally and consistently, compliance is not an issue because all patients are treated in the same way. Patients’ overall experience is much better, and engagement is stronger.

A top-five, not-for-profit academic medical center that applied this approach to patient collections increased collections by 24.7%, or $35.8 million, while also reducing its cost to collect. The health system also collected $6.1 million in insurance payments by identifying missed eligibility coverage on accounts originally identified as true self-pay accounts. 

This published piece is provided solely for informational purposes. HFMA does not endorse the published material or warrant or guarantee its accuracy. The statements and opinions by participants are those of the participants and not those of HFMA. References to commercial manufacturers, vendors, products, or services that may appear do not constitute endorsements by HFMA.

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