Today, we're diving into a topic that affects both healthcare providers and patients alike: patient financial responsibility (PFR).
According to NRC Health, a whopping 68% of patients feel frustrated by healthcare billing processes.
The same study also shows that 80% of patients would switch providers for more convenience. That's a huge number! So what is PFR? These are the out-of- pocket expenses that patients might have.
These include the following:
* Copayments. When a patient with a health insurance plan must pay a fixed dollar amount at the time of a medical service. The insurer is then responsible for the rest of the reimbursement.
* Deductibles. A fixed dollar amount an insured person pays before the payer covers medical services. After paying the deductible, a patient must pay the coinsurance or copayment.
* Coinsurance. The cost an insured person pays for healthcare services after they meet their deductible.
It’s important to familiarize yourself with this metric to help you understand your patients’ ability to pay their bills. It also keeps you clued in on how to create different strategies to improve collections while reducing any debt.
There are two important aspects to keep in mind when it comes to financial responsibility:
* Patient education
* Patient communication
To calculate PFR, add up all of the out-of-pocket costs that the patient is responsible for in a given period. Things such as deductibles, coinsurance, and co-payments. Include any outstanding balances, and calculate the percentage of the total collected. Compare this to industry standards to determine how well your practice is performing. Currently, the PFR benchmark is around 20% of total patient responsibility.
To keep your PFR rate around 20%, here are three tips you can incorporate into your billing practices.
Patient Education
Making sure your patients understand their financial responsibilities and what to expect during the billing process is essential. It is recommended you do this before they receive services, which encourages clarity and transparency.
Include any information about their insurance coverage beforehand. Plus any copays or deductibles they should be aware of. As well as any out-of-pocket expenses they might have.
Verify Insurance Eligibility
Verify your patient’s insurance eligibility before providing healthcare services. Knowing what the patient’s insurance covers can reveal possible upfront cost estimates. This reduces the likelihood of unexpected bills and possible payment delays which slow your revenue cycle management process as a whole.
You can verify a patient’s insurance by:
* Checking the patient’s insurance card.
* Contacting the insurance company.
* Using an online eligibility tool.
Payment Plans
Help ensure that financial clarity between you and your patient by incorporating payment plans. Giving people a way to manage their financial obligations produces all kinds of benefits. This leads to greater trust between you and the client and also reduces the likelihood of delinquencies or delayed payments on balances.
To avoid missed payments, you might also want to take the time to assess the following:
* Patient income.
* Credit history.
* Current financial situation.
Ensure patient satisfaction and meet compliance regulations by verifying payment eligibility early on.
PFR remains a critical metric of measurement. Especially when it comes to collecting on patient payments. Not only is the influence of this concept on your financial health important, but for your patient satisfaction rate as well.
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