Six Strategies for Increasing Medical Billing Efficiency

In today’s value-based care world, efficiency is a guiding principle. Learn how to increase billing efficiency in your medical practice.
Operations Patient Experience RCM

In today’s value-based healthcare environment, efficiency is a guiding principle. In order to succeed, healthcare organizations must continually look for more efficient and innovative ways to deliver quality care, lower costs, improve health outcomes and enhance the patient experience. Efficient medical billing is an important part of achieving those goals, but it doesn’t often happen automatically. As patients take on more financial responsibility for their care, many providers still rely on inefficient medical billing processes that fail to effectively collect from patients, leading to bad debt and bills that go unpaid. Studies show that while more than 80% of patients said they felt as obligated to pay for their healthcare as they do for other services, 35% said the payment process is inconvenient.

The medical billing process doesn’t have to remain so challenging for patients or providers. When implemented effectively, a good billing process can increase practice revenue, streamline business operations and support patient satisfaction.

How to improve medical billing efficiency

Here are six strategies that can help your organization boost its medical billing efficiency, improving the patient experience—and ensuring that you get paid.

  1. Stop billing. Surprisingly, one of the best ways to improve medical billing efficiency is to stop sending bills. Post-visit billing and collections create excessive administrative work and waste staff time that could be better spent on higher-value tasks. It typically takes more than three billing statements—costing between $5 and $15 each—to collect a patient’s balance in full, according to data from the Medical Group Management Association. Billing statements also can “cost” the medical practice by negatively affecting patient retention and the overall patient experience. The payment process is often the final and most influential point of contact between patients and their provider, so it’s important to create a positive, convenient and efficient experience that helps patients feel comfortable, while also ensuring that your organization successfully collects.
  2. Collect upfront. Asking for payment at the time of service saves staff time spent on billing paperwork and helps patients understand their financial responsibility. However, many providers wait to collect, which leads to inefficient billing and poor revenue cycle management. According to an analysis from athenahealth, providers typically collect only 12% of outstanding balances at the time of service, which makes it harder to collect in the future, even when patients return for additional visits. The same survey found that only 6% of outstanding balances over $200 are ever collected. Medical practices can avoid this frustration by creating a clear collections policy and making sure patients are aware of its terms. Consider placing a sign in your waiting room that explains when patients are expected to pay for services and lists accepted forms of payment. You can offer patients the option to pay when they check in on their mobile device prior to their appointment. ENT & Allergy Associates (ENTA), the nation’s largest ear, nose, throat and allergy practice, collects 70% of payments at the time of service by reminding patients about their financial responsibility as soon as they enter a practice location or when they check in online.“It’s so important to tell patients about their financial responsibility before they walk out the door so they’re not getting surprise bills,” said Nicole Vigue, Senior Director of operations at ENTA. “It’s also helpful for us because we don’t have to chase after people and have that money sit in accounts receivable.”
  3. Collect respectfully. A transparent collections policy not only helps improve the medical billing process, it also helps protect your organization’s reputation, brand and patient relationships. Research from JAMA Internal Medicine indicates direct correlations between patient-provider trust, cost pressures and even treatment compliance. Aggressive collections efforts can diminish that trust and damage the patient-provider relationship, which may ultimately have a negative effect on patients’ health outcomes.“We don’t force patients to pay, but we give them the option to minimize their chances of receiving a surprise bill in the mail,” explained Vigue. She says that before ENTA asked for payments at the time of service, many patients complained about unexpected bills or not knowing what they owed until after their appointment.“It’s a very different, and often difficult conversation when you’ve just been given a diagnosis and are then told you’re responsible for paying for treatment,” Vigue said.
  4. Provide cost estimates. Cost estimation tools can improve the medical billing process by automatically calculating estimated charges for patients’ visits before they arrive. Not only does this help educate patients about their financial responsibility, it also makes it easier for staff to ask for payment and give providers a better understanding of costs for the services they recommend. Adding more transparency to your medical billing process influences patient loyalty and retention, too. Nearly 70% of patients who responded to a HIMSS Analytics survey said that receiving a cost estimate would make them more likely to recommend their healthcare provider to others. In addition, 46% said they would be more likely to pay a larger portion of their bill before their appointment or at the time of service if they received a cost estimate ahead of time.
  5. Offer flexible payment options. Flexible time-of-service collection options like card on file, online payments and payment plans offer patients convenient and private ways to pay, while also improving medical billing efficiency and boosting provider revenue. As consumerism continues to expand throughout the healthcare industry, many patients say they prefer self-service options like online payments. In addition, a 2018 healthcare payments trends report found that 71% of patients said they wanted e-statements from their providers, while the HIMSS survey revealed that one-third of patients age 75 and older would rather pay their next medical bill using a credit card on file.
  6. Automate E&B. Nearly 80% of all medical bills contain errors, leaving many patients confused about what’s covered and reducing their likelihood to pay on time, if at all. This also affects practice revenue and medical office efficiency, because an inaccurate bill increases the likelihood of a denied claim. Resubmitting rejected claims wastes staff time and effort and leaves healthcare organizations waiting for payment. Many of these issues can be resolved with automated insurance verification. Automating coverage verification can improve medical billing efficiency by alleviating the administrative burden of processing billing paperwork and preventing manual errors. The streamlined process then allows healthcare organizations to reallocate staff to more patient-centric roles.

Learn how Phreesia helps healthcare organizations improve revenue cycle management.