Financial Counseling

Report
FINANCIAL COUNSELING
BEST PRACTICES
AAHAM SPRING MEETING
May 17, 2013
FINANCIAL COUNSELING
BEST PRACTICES

Learning Objectives
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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?
Does this sound like your organization?
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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
verification is called a “financial counselor”?
Your “counselor” sometimes strays outside of your
written guidelines when approving financial
assistance?
You have a backlog of patients awaiting Medicaid
approval so financial assistance decisions are
delayed?
Your counseling process has little integration or 3
automation? Form completion is manual?
PERFORMANCE METRICS
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KEY PERFORMANCE
INDICATORS
Category
Collection of elective services deposits prior to
service
Collection of IP patient-pay balances prior to
discharge
Collection of OP patient-pay balances prior to
service
Collection of ED patient-pay balance prior to
discharge
Screening of uninsured and underinsured
patients for financial assistance
Payment arrangements for non-charity eligible
patients
Prompt-payment discount percentage(s)
Standar
d
100%
> 65%
> 75%
> 50%
> 95%
> 95%
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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WHAT IS FINANCIAL
COUNSELING?
“The way we see the problem
is the problem”
 Stephen R. Covey
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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
personnel
 Insurance verification
specialists
 Dedicated counselors

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WHO IS RESPONSIBLE?
Patient Access
Counseling
 Counseling
to billing:
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Patient Accounts
Counseling
prior
Scheduling
Pre-registration
Walk-in
registration
Emergency
Department
Scheduled
procedures
Decentralized
departments
 Counseling
after
billing:
 Late payments
 Denied claims
 Questions or
dispute resolution
 Bad debt issues
 Bankruptcies,
Liens, etc.
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WHEN DOES COUNSELING
START?
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
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:
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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.
Cost-toCollect
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PAYMENT RESPONSIBILITY
When does payment
responsibility begin?
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!

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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
Financial Counseling Policies
Financial Screening:
Activities an
organization engages
in to establish patient
payment responsibility
Screening
Financial Practices
Financial Clearance
Verification of Payer
Coverage
Up-Front Collections
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PATIENT FINANCIAL EDUCATION
Financial Counseling Policies
Financial Counseling:
Activities an
organization engages
in to help patients
meet their financial
obligations
Counseling
Financial Assistance
Payment Plans
Waivers of CoPayments and
Deductibles
Self-Pay and Bad
Debt Processing
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PATIENT FINANCIAL EDUCATION
Financial Counseling Policies
Screening
Counseling
Financial Practices
Financial Assistance
Financial Clearance
Payment Plans
Verification of Payer
Coverage
Waivers of CoPayments and
Deductibles
Up-Front Collections
Self-Pay and Bad
Debt Processing
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ACCOUNT RESOLUTION

Account Resolution

Involves
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.
2.
3.
4.
5.
Greet the patient
Review your financial
policies
Review insurance
benefits if any
Review expected charges
and calculations
Review payment options
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ACCOUNT RESOLUTION

Payment Options
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Full payment no later
than the date of service
Short-term payment
plans
Bank loan programs
Government programs
Financial assistance
program
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ACCOUNT RESOLUTION

Payment
Options

Full payment no
later than the date
of service
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Including:
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Cash
Check
Credit Card
Electronic Funds
Transfer
Date-limited
Prompt Pay
Discount
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ACCOUNT RESOLUTION
 Payment
Options

Short-term
payment plan
 Features:
Monthly payments
 Interest-free
 Plans are based on
propensity-to-pay
 Timeframes don’t
crossover into baddebt criteria
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ACCOUNT RESOLUTION
 Payment
Options

Bank 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
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Options
Medicaid Eligibility
 Design
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Options:
Onsite state or
county workers
Outsourcing Firms
Internal referrals to
state or county
assistance
Streamlined process
includes
“presumptive
approvals”
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ACCOUNT RESOLUTION

Payment Options

Hospital Financed
Assistance
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Features
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Sliding scale
discounts
% of Federal Poverty
Guidelines
Use of term “charity”
eliminated
Streamlined 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 standalone 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 EVOLUTION
Applications have evolved along
a fairly predicable path
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)
While progress has occurred at
every level, transformation of
work processes has been elusive
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FINANCIAL ASSISTANCE
AUTOMATION

Benefits
 Proactively identify eligibility to
entitlement programs
 Reduce 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
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
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 epay systems
 Pre-define payment plans
 Presumptive eligibility and approvals
 Automate financial assistance rules and
workflows
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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 SelfScheduling:
Clinical pre-cert
edits applied
Patient SelfScheduling:
Financial
Screening edits
launch
PreRegistratio
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 sitespecific discounts
Pop-up patientfriendly 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 autoscheduled for
exceptions
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A 4TH GENERATION VISION
ECashiering
Payment
estimates flow
directly to ecashiering
application
Online prepayment
processing for
credit cards, echecks
SelfPayment
Options
Patient is
presented with
pre-established
payment plan
options
Patient may
route directly to
a financial
counselor (FC)
Exception
Managemen
t
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
The Formula for Transforming the Financial
Counseling Vision
Integration Between all
Applications
+
Technology
Accelerators
4th Generation
Vision
+
Transformational
Performance
=
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QUESTIONS?
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CONTACT INFORMATION
John Thompson, PMP, CHAM, CRCR
Principal, Access Management and
Technology Innovation Services
[email protected]
(301) 802-3078
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