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4 Steps to Protect Revenue During Annual Deductible Resets

by OnPlan Health

Making It More Affordable and Easier for Patients to Pay Is the Key to Success

 Mid adult female receptionist receiving card from patient in dentist clinic

It’s almost that time of year—the time when insurance deductibles are set back to zero. Unexpected illnesses or hospitalizations during this period can be especially difficult on consumers, many of whom may still be struggling to pay off Christmas-related bills. The last thing you want is for patients to skip needed treatment because of finances. When patients delay or miss needed care, it can negatively impact care plans, compliance, outcomes and, ultimately, hospital revenue. At the same time, you can’t afford to put your cash flow in jeopardy due to non-payments.

When patients can’t pay, many hospitals end up in the billing/collections quagmire. Sending multiple statements and final notices are ineffective and can negatively impact the patient-provider relationship. Handing unpaid accounts over to collections will return only a fraction of what’s owed once agency fees are paid, and numerous collections calls may further erode the patient relationship.

Following are four techniques successful hospitals employ to make it easier for their patients—and their organization—to survive during this challenging time of year. 

  • Talk with patients about their responsibility before the time of service. While collecting payment up front is one of the best ways to lower collection costs and reduce write-offs, it may be impossible for patients to come up with even a portion of the amount owed once deductibles reset. But that doesn’t mean you shouldn’t have the conversation. Providing patients with as much information as possible as early as possible and giving them realistic, tailored options for payment allows them to make better decisions about their healthcare.
  • Leverage predictive segmentation analytics. Understanding a patient’s likelihood to pay their medical bills, and leveraging that information to develop a personalized plan, drives up collections and reduces loss. But the information needs to be based on more than just credit checks since patients often take a different approach to paying their medical bills than their other bills. Hospitals with medical-specific segmentation analytics can be more effective in finding alternative methods to help patients pay. This, in turn, helps prevent turning accounts over to collections or charity too soon, which leaves money on the table unnecessarily.
  • Provide patients with an estimate of their obligations. Many patients don’t fully understand what’s covered in their benefits plan or how deductibles work. Providing this insight along with estimates of their financial obligation helps patients make more informed decisions about how to pay. It also opens the opportunity for hospitals to take a more responsive approach to discussions around prompt-pay discounts or flexible payment plan options. Without the ability to offer estimates pre-service, or at service, both patients and providers are in the dark, which can result in increased write-offs and delays in payer reimbursements.
  • Offer responsive, hospital-based payment options. Payment plans and lines of credit are rarely offered proactively and, for many hospitals, are only offered upon a patient’s request. Whether the hospital’s accounting system can’t handle these transactions or a hospital just doesn’t want to take on the financial obligations of a lender, ignoring these opportunities makes it harder for patients to pay, impedes cash flow, and negatively impacts the patient relationship. The best offerings are those based on a patient’s unique financial situation and are flexible enough to be adjusted as a patient’s finances change.

Taking a Proactive Approach

Deductible resets happen every year and every year hospitals struggle to collect from patients during this time. Hospitals owe it to their patients—and their bottom line—to take a different approach. Providing patients with more transparent billing and proactive payment options helps them make more informed decisions about their healthcare. It also improves the patient experience and can positively impact loyalty. When patients know a hospital is going to do all they can to make it easier for them to pay, they may be more likely to return for future services.

Responsive payment options are an important tool to help both patients and hospitals navigate the dreaded deductible resets.