Payment Collection Strategies to Keep Your Otolaryngology Practice Profitable

To ensure that your otolaryngology practice is getting the best return on its patient payment collections, you should:

A. Use an in-house billing staff.

B. Use an outside billing service.

C. Use an outside service to train your in-house billing staff.

The answer? D—None of the above. If your practice is doing any significant collections from patients after the point of service, you’re significantly behind the times and costing yourself a lot of money. The most effective collections staff in your office isn’t in the billing department; it’s sitting behind your front desk.

One Step Ahead

Today’s otolaryngology practices will be treating more and more patients with an increasingly high level of out-of-pocket responsibility for the cost of their care due to larger copayments, the growing role of coinsurance, higher deductibles and other factors. (See “Patients Pick Up More of the Tab,” below). The best way to collect these payments, experts say, is to do so up front.

“We find that practices are much more successful with their collections if they focus not so much on the back end, but on the front end,” said Cheyenne Brinson, MBA, CPA, a practice management consultant with Chicago-based Karen Zupko and Associates. “For example, a year and a half ago we set up an ENT practice with a number of front-end collection strategies, and their financials are very strong. They have very few patient accounts receivable. Those few are either self-pay patients they’ve agreed to put on a payment plan, or the handful they did not collect payment or deposits from at the time of service—and it was a big lesson to the staff who made that mistake!”

Brinson advises otolaryngology practices to deploy a multi-pronged collections strategy that actually starts well before the patient walks into the office. The single most important step in that process, she said, is pre-registering the patient, by phone or computer, when he or she makes an appointment.

“You should be obtaining all of the patient’s information, including their insurance details, ahead of time,” said Brinson. “That includes the payer as well as the actual policy number. It seems like a no-brainer, but tons of practices don’t do this. Some say that their front desk staff would be on the phone with patients forever. But that’s not the case, and practices that wait for a patient to complete their information and input it only after patients check in are behind the eight ball. If there are mistakes or problems, then they don’t catch them until the back end, and that’s where we see problems with accounts receivable.”

If you anticipate that there will be some need to bill the patient on the back end—for example, a surgery for which the patient may not have full coverage—Brinson advises obtaining credit card information ahead of time. “Have them sign a statement that you will charge their card for any deductibles and coinsurance due after the claim adjudicates,” she said.

There are several technology solutions that can facilitate this process, including the Availity/RealMed health information network, which provides office administration and cash flow management tools, including point-of-service payment processing.

Creative Solutions

Gavin Setzen, MD, a partner in New York-based Albany ENT and Allergy Services, a seven-physician, four-physician assistant practice, said that a front-end strategy has significant benefits for the practice’s cash flow. “It’s very rare that we have to go to collections. If we have a high outstanding balance and it’s not a known hardship scenario, we might consider that, but that’s a very, very small number of cases.”

In most circumstances, he said, educating patients about what they might expect for a new-patient consult, including additional procedures that might be necessary, helps up-front collections run smoothly. “We give patients the option to talk to one of our billing managers before their visit, at check-in, or at any other time,” said Dr. Setzen. “It’s very clear in our paperwork and in our discussions with patients what their financial obligations will be.”

In today’s economy, more patients are asking for extended payment terms, according to Todd Blum, CEO of Ear, Nose and Throat Associates of South Florida, based in Boca Raton. “We’re sympathetic to the needs of our patients who are struggling, and we work with them as best we can, but we have our own expenses to cover.” In other situations, insurance company payments are retroactively taken back from the practice, leaving patients with unexpected balances, he added. Depending on the amount of money owed, his practice—on a case-by-case basis—will allow patients to spread out payments over several months, but not for longer than a six-month period.

“Another option we have at our disposal is for a patient to apply for a medical credit card from an organization such as CareCredit,” said Blum. “I would rather have my money up front than directly extending credit to the patient.”

Ear, Nose and Throat Associates of South Florida uses fee estimators, such as the online tools provided by payers such as Blue Cross, to estimate what patients are expected to owe. “We know if our contract is X percent of Medicare, we can collect what we believe the fee will be,” said Blum. “If it ends up being less than that, we would rather refund patients’ money than chase them down for an outstanding balance. Studies show that if we don’t collect copayments at the time of service, it will cost us more to collect than the amount we are owed in the first place.”

Additionally, as high-deductible health plans become more prevalent, Blum said, it’s even more important to collect balances in full up front. “Patients come in to our offices with much larger deductibles. Before patients reach their annual deductible (especially in the beginning of each calendar year), it is common for them to have to pay for 100 percent of the cost of the visit.”

Out of Sight…

There’s one other reason why payment at time of service is the best way to go for an otolaryngology practice (or for any other medical practice): That’s the time when the patient feels most favorably disposed toward you.

“They’re aware of the care they’re getting right then,” said Brinson. “Once you’ve sent a statement and they’re home and they’ve recuperated, they may think that the doctor doesn’t really need their $200. And, if they’ve had any sort of negative aspect to their experience—say, they thought the doctor didn’t spend enough time with them or the front desk person wasn’t nice—people can come up with all kinds of reasons why they don’t need to pay the bill.”