Improving Self-Pay Collections with a Zero-Interest Line of Credit

By launching a zero-interest line of credit program for patients, a Pennsylvania health system gets access to the money right away and is able to consolidate the administration of outstanding accounts. Patients "are grateful," says one executive.
By launching a zero-interest line of credit program for patients, a Pennsylvania health system gets access to the money right away and is able to consolidate the administration of outstanding accounts. Patients "are grateful," says one executive.<br />Like most provider organizations, Crozer-Keystone Health System in Springfield, PA, is being ...

Like most provider organizations, Crozer-Keystone Health System in Springfield, PA, is being challenged financially by high-deductible health plans, which are pushing a larger self-pay obligation onto patients.

"High-deductible health plans are absolutely having a big impact," says Robert Perry, vice president, corporate revenue cycle for the five-hospital, $700 million system.

"When we were originally looking at the products that people could purchase, we thought we'd see a lot of high-deductible plans through the exchanges, but it is the employer-sponsored plans that have made it the most difficult. The employee responsibility is actually higher because employers feel that because their employees are working, they can afford to pay more."

Offering a payment solution

In an effort to increase collections and to make it easier for patients to pay their medical bills, Crozer-Keystone has recently rolled out a zero-interest line of credit through a third-party vendor, which gives patients 25 months to pay off their debt.

While the health system is still ultimately at risk, the line of credit increases the likelihood of a patient being able to pay, and it gives Crozer-Keystone access to the money in a much timelier fashion, Perry says.

"If the patient defaults, it is on us to take the account back and pay it... We are the ones at risk the whole time, but the good part is we have the money right away. This also opens up an opportunity for the working poor who don't qualify for help and always pay their bills, but that struggle to do so. They can make a payment instead of paying the bill all at once."

Additionally, Crozer-Keystone benefits from being able to consolidate the administration of outstanding accounts for which it had previously established an internal payment plan, Perry says.

"We had a number of parties who were on payment plans with us. We've been able to send that group over, and all of these accounts we would have sat on for years are now all controlled in one entity. From an operations perspective, that is a big plus for us."

Providing upfront patient education

Lauren Delpino, director of Crozer-Keystone's patient service center, says the line of credit program will be discussed with patients as part of the registration process before a procedure is performed.

"We have a centralized patient services area, and the goal is to schedule and preregister patients prior to service. During that time, we do discuss with patients their responsibility and talk to them about payment options such as [the line of credit]. We let them know all the things they need to know prior to service so that the day of care can be clinically focused," Delpino says.

"Patients are grateful. They may be a little sticker shocked, but they are able to know up front, and they can make accommodations to pay."

Crozer-Keystone has so far only offered the line of credit to its surgical patients, but other patients have heard about it and are asking for details, Delpino says.

"We are doing a soft opening so we can see the volume and work through the process, but we're finding that people are hearing about it through word of mouth. That tells us that people in the community really want to pay their bills. These are hard-working people with families who do want to pay. We are doing so much work up front and being honest with them about their responsibility, and as a result, they are honest with us about their ability to pay."

The line of credit also assists patients by giving them the flexibility to combine multiple accounts and keep a running tab for ongoing services, Delpino says.

"You get a card when you enroll, and you can add other services to that account as long as you continue in good faith to make payments as agreed upon. You can continue to consolidate accounts and put other services on the account to make payments."

Improving access and patient satisfaction

Although Crozer-Keystone has not set any specific targets around collections, the line of credit program is a step in the right direction for helping make sure patients can continue to access and pay for care, Perry says.

"I don't think we set a goal as much as we met the hospital mission of wanting everybody to come here and get care and to help them pay for it. It may sound a little altruistic, but the reality is without helping these people, we probably would not get paid or it would take us three to five years to collect on those dollars. We also want to make sure people don't decide not to get the care they need."

Offering an easy, interest-free plan for patients to pay their bill also helps create better patient satisfaction, Perry adds.

"By utilizing the program, we are taking care of explaining to patients their debt and giving them an opportunity to pay in a new way. When they get their first bill after service, they won't decide they don't think the care they had was worth it. If you get a big bill and you haven't been prepared for it, it hits you and you start to think that the doctor didn't listen to you enough or the nurse didn't take care of you in the way you would have expected. I think this program takes the edge off of that and patients remember their care the way it really was presented, which was good and compassionate care."

Source: www.healthleadersmedia.com