Pre-payment...The New Best Practice – Part 3

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Winter 2015


This is the final installment of a 3-part series examining the implementation of Patient Pre-payment Practices, the Paradigm Shift in A/R Management, Collection Challenges and Effective Solutions

With as many as 283 hospitals on the verge of closure, hospital financial officers have to make substantial changes. (USA Today)

According to Bruce Vladeck, senior adviser at Nexera, NYC, “Hospitals…are trying harder to collect deductible and co-payment amounts from patients. In the hospital financial management community, prepayment is now generally defined as a 'best practice'."

Hospital executives say collecting bills before a patient arrives or before they go home has proven to be more successful and far less expensive than sending a bill after the fact.


“Hospitals should move beyond the traditional approach of billing patients after services
and provide patients with pre-service financial clearance and payment options.”
- Deloitte


Success Stories

• Since June of 2013 a small, hospital in rural north central Oklahoma has been using a Patient Estimator toll from Medical Recovery Services. Their up-front cash reimbursements are now averaging about 70% of patient liabilities. ($12,386 per month…a total of $148,632 for 2014).

• In September 2014, a multi-specialty surgery center in St. Louis began using the Patient Estimator. In the first 3 months, up-front cash payments (which started from virtually zero) averaged $57,920 per month. If this trend continues, a conservative estimate calculates their
collections for fiscal year 2015 will be in excess of $600,000.


How they did it - Solutions

1. Install Point of Service Software (patient liability estimator) and focus on training workers at the counter to be assertive in discussing the costs of care.

2. Routinely verify coverage electronically before scheduling tests, radiology screenings, and other services.

3. Inform patients on the spot how much they'll need to pay in advance before scheduling tests, radiology screenings, etc. or what they'll be expected to pay during their visit.

4. Communicate payment responsibility through multiple channels.

5. When confirming appointments, schedulers and receptionists should be urged to remind patients of their payment obligations at the time of their visit.

6. Many hospitals offer a pre-payment discount incentive if the patient agrees to pay the full amount in advance.

7. When patients say they don't have the money, ask for the amount they can remit and offer a financing program at reasonable interest rates. (Some facilities use a sliding scale to set fees based on the level of need and other factors.)

8. Develop self-pay policies for elective procedures that require an upfront partial or even full payment.

9. Clarify policies for uninsured patients…i.e. the charity care policy; implement it consistently, and ensure the accuracy of the community service adjustment.


"These policies are not a new practice. They are followed by most hospitals. They were designed to help speed entry into care…which is a primary focus for our patients." - Lisa Greiner, NYU Langone Medical Center.

“We are not trying to run people off…we want their business. But we also want to be paid for our business.”
- Gary Morris, Laurens County Health Care System, Clinton, S.C.

“Patients also have an obligation to inform themselves. Across the board, people need to prepare themselves; they need to educate themselves.” - Martin Rosen, author of "The Healthcare Survival Guide"









For the past ten years, Medical Recovery Services has worked to help small community and critical access hospitals to succeed and prosper, keeping their communities thriving and vibrant. We offer a complete range of products and services at exceptionally affordable rates. Please let us know how we might help you.



1. http://www.beckershospitalreview.com/finance/10-things-to-know-about-rising-hospital-charges.html
2. http://www.healthleadersmedia.com/content/FIN-310768/5-Big-Hospital-CFO-Concerns-for-2015
3. http://www.beckershospitalreview.com/hospital-physician-relationships/collecting-from-patients-with-high-deductibles-5-things-to-consider.html
4. http://www.usatoday.com/story/news/nation/2014/11/16/hospitals-doctors-toughen-collection-of-bills/19144677
5. http://www.parentdish.com/2010/03/04/oh-baby-more-hospitals-asking-for-payment-before-childbirth/
6. http://www.needhelppayingbills.com/html/pre_pay_hospital_bill_discount.html
7. http://www.modernhealthcare.com/article/20121013/MAGAZINE/310139953
8. http://www.healthleadersmedia.com/print/FIN-310947/Demands-for-Price-Transparency-Pressure-Providers
9. https://www.moodys.com/research/Moodys-US-fiscal-year-2013-NFP-hospital-medians-show-all--PR_307265
10. http://www.modernhealthcare.com/article/20140827/NEWS/308279955
11. http://www.healthleadersmedia.com/content/FIN-311023/The-New-Collections-Challenge
12. http://www.healthleadersmedia.com/page-1/FIN-309003/10-Best-Practices-Can-Improve-Collecting-Medical-Debt
13. http://www.hfma.org/Content.aspx?id=26253&utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=59671265
14. http://www.aha.org/research/policy/finfactsheets.shtml
15. http://www.pillsburylaw.com/siteFiles/Publications/AR_Health_Care_Financing_Trends_ABI_Troop_11_14.pdf



For additional information, or to contact Medical Recovery Services, go to:

http://medical-recovery-services.crushpath.me/DonaldTapella/version3

or call Donald Tapella at (816) 229-4887, ext.111