Managing the Healthcare Revenue Cycle, Part 3: Point of Service (POS) Collections

The first article in this series introduced several ways that software and strategies support patient scheduling within the Revenue Cycle Management (RCM) for healthcare organisations. The second article focused on patient pre-registration including how to capture patient data and integrate it into an electronic medical record in order to speed up appointments and claims processing.

This article is about the third and final stage of the RCM pre-encounter phase, receiving co-payments.

We’ll go into detail about the challenges around payment collections facing healthcare professionals as well as POS payment solutions that can help manage the patient’s portion of the payment, reducing uncertainty and reducing collection times.

Stage 3 of Healthcare RCM: POS Collections

Issues with Payment Collections

No longer are all healthcare payments received from insurance companies directly. Rather, more and more often patients are reconciling their own payments, which are either increasingly high co-payments, deductibles, charges for non-covered expenses, or paying out-of-pocket and submitting directly to their insurers for reimbursement. These amounts owed can be significant, creating even greater challenges for the revenue management teams.

These changes as well as new technology and alternative payment methods, such as electronic transfers, patient portals and updates/upgrades to other related systems, can all affect your payment posting efficiency.

Payment posting errors, meanwhile, create their own revenue cycle problems—understated accounts receivable, denials, incorrect credits and erroneous patient statements. Reconciling explanation of benefits (EOBs) and remits is further complicated by changes in patient accounting systems and multiple banking systems/lock boxes, requiring massive amounts of work for the financial department.

Additional challenges of processing payments for healthcare providers:

  1. Protecting patient privacy: compliance requires that measures be in place to prevent breaches of Protected Health Information. All payment processing partners, however, may not be compliant.
  2. Delays in patient payment: patients don’t necessarily make payments at the time of service. Increasingly complicated insurance processes can further delay payments from both the patient’s insurer and, in turn, the patient or guarantor
  3. Multiple payment options: to address higher patient responsibilities, some providers or organisations offer payment plans, financing, and early payment discounts—all of which must be integrated with the various payment processing solutions within the billing system.
  4. Health and Flexible Spending Accounts (HSAs/FSAs): government-approved accounts, used exclusively for eligible health expenses, require special attention, particularly when a billing adjustment or refund needs to be issued.
  5. Electronic health record (EHR) and practice management (PM) systems may be separate from the payment processing systems: this separation necessitates updates be made to a patient’s EHR/PM account to reflect each transaction from the payment processing system.

Due to these challenges and many more, POS collections are increasingly important for revenue cycle management to ensure timely patient payments. There are two primary ways to make POS collections work: staffing and software.

Staffing Solution

In addition to verifying your patients’ insurance coverage, staff should implement POS collection policies. Ideally, insurance verification would be done automatically and electronically, with pre-authorisation for high-cost procedures and payment arrangements for procedures that aren’t covered made in advance.

It’s important to set clear expectations with patients. Pre-appointment communications (scheduling, confirmation, reminders, etc.), should inform them that payment is required at the time of service before they arrive to their appointment.

Software Solution

The latest advances in software can help you accept more varied forms of payment, post patient co-pays as soon as possible, and calculate complex deductibles to avoid the most common payment delays at the end of the claims process. Moreover, a POS collection module that is part of a robust RCM solution can connect more information upfront throughout a department or across the enterprise.

Some POS collection solution software features are:

  • Integration with registration, eligibility, billing and document imaging systems to automate all point-of-service collections
  • Elimination of rekeying patient information
  • Automatic capture and payment storage, receipt generation, payment posting, and report creation
  • POS tools such as balancing tools, receipt printing, and drawer close procedures
  • Processing of all payment transactions including co-pays, deductibles, out-of-pocket, coinsurance, and prior balance
  • Review and collection of outstanding balances for department, group, and/or health system
  • Dynamic linking to follow-up activities to the right users to reduce missing charges for co-pays without an invoice

An RCM solution with POS collections can also integrate with numerous hospital information system platforms and banking institutions to create a single source for claims adjudication and payment reconciliation. Payment posting errors can be prevented and all but eliminated with an automated RCM software solution.

By integrating transactional claims data with its corresponding payment remittance data and combining it with your daily deposit data into a single data source, an RCM solution with POS collection functionality can easily and quickly identify exception-based transactions that require additional attention and follow up. These exceptions can then be managed in the RCM solution’s work queue management tool for timely adjudication and account resolution.

Automated payment posting done correctly improves cash flow as it increases collections, allows for prompt resolution of billing problems, bills all payers accurately, and provides patients their statements quickly.