As healthcare payment liability continues to shift to patients, it
has become increasingly important for healthcare organizations to offer
convenient and accessible patient payment options. Prior to COVID-19,
the exponential growth of high deductible health plans along with rising
consumerism drove the need for more flexible payment vehicles. While
those drivers are still valid, the current public health crisis has made
payment programs even more essential. The cost of treating the virus is
significant, and rising unemployment means more people are coming to
the hospital without insurance.
A key component in a patient-centered payment experience is a patient
lending program, which allows patients to spread payments over time
with little to no interest. These types of programs empower patients to
meet their responsibilities while respecting the burden the obligations
represent. A well-administered payment plan can also foster a lasting
relationship with patients because individuals may prioritize seeking
care in a facility that makes it easier to pay. This keeps patients in
network, which is not only financially lucrative for health systems but
also enables value-based care models.
The challenge with payment plans is that healthcare organizations
aren’t usually set up to administer them effectively, especially over
extended periods. If a hospital offers payment plans, they may do so on
an ad hoc basis. This leaves the hospital with an assortment of
arrangements that aren’t necessarily standardized and are often hard to
manage. As patients seek payment arrangements for higher dollar amounts
with longer terms, healthcare organizations are seeing the need to
rethink their approach.
Pursuing a better option
Community Health Network, a large integrated health system located in
Indianapolis, Indiana, saw the value of retooling its patient payment
plans. “Although we’ve offered plans for a while, our approach wasn’t
standardized, we struggled to accommodate longer terms and we had to
offer separate plans for different service areas because of technology
constraints,” said Chad Bills, network vice president, revenue cycle for
Community Health Network. “We wanted a way to consolidate different
payment plans, transfer the liability outside the hospital and improve
the convenience and accessibility for our patients.”
Community Health Network turned to CommerceHealthcare® for
answers. “We’ve had a patient finance program since 2014, and we are
constantly refining it to give greater peace of mind to patients and
providers,” said Mark Huebner, director of healthcare financing for
CommerceHealthcare®. “Through our program, the patient has
access to a line of credit with low or no interest, giving them a way to
make smaller payments over time. This mirrors the ease and
accessibility of a hospital payment plan with everyone being approved
regardless of credit. There is also no paperwork because the provider
already has the patient’s information in the electronic health record.”
CommerceHealthcare® offered Community Health Network
tiered options, so the health system could select the one that would
best serve its patients. “We chose a program that spans multiple service
areas and allows patients to consolidate existing payment plans into
one, adding new expenses onto the same line,” Bills said. “This way no
matter where they receive services in our organization, they can add
their payment responsibilities to the credit line.” The program focuses
on longer term payment plans, spreading across 24, 36 and even
60 months.
Not only does the relationship with CommerceHealthcare® help
patients, it benefits the health system as well. “We pay the hospital
upfront when we assume existing payment plans, patients add to those
plans or a patient opens a new line,” Huebner said. “We then work
directly with the patient to collect on the line. This accelerates cash
flow for the health system and improves liquidity while reducing A/R
days and bad debt expense — which ultimately strengthens operating
margins.”
Hospital staff can also get patients set up on a payment plan
remotely. Credit line applications can be done over the phone or online,
with the patient verbally agreeing to the line of credit. The process
is touchless, which is important during the current public health crisis
when staff are working from home.
The advantages of working with a bank
In many cases, payment plans with CommerceHealthcare® perform
better than a hospital’s in-house payment plan. “Since we are a bank,
and consumers are more comfortable and familiar with dealing with banks
when it comes to their finances, we have found they are more likely to
pay their healthcare bills when they come from us,” Huebner said. “They
also know that we will follow up on any delayed payments, so it is more
likely that payment becomes part of their routine.”
If a patient misses a payment, CommerceHealthcare® sends
reminders and late notices. “We’ll work the account for 90 days,”
Huebner said. “Once we’ve exhausted all efforts to collect from the
patient, we give the debt back to the hospital to handle through their
bad debt collections process. Note that if we can’t collect from the
patient, we give back our fee. This means we assume risk to administer
the program, which fosters a better relationship with our healthcare
clients because we have a financial stake in collecting from patients.”
Having a bank administer the lines of credit is also helpful during a
crisis. Throughout the pandemic, for example, CommerceHealthcare® activated
its debt relief policy to help patients who were struggling. “They
served as a true partner to us in this area, sharing our values and the
values of our patients,” Bills said. “They allowed payment deferrals and
extended the delinquent timeline to support people through the crisis.”
A straightforward and well-supported implementation
As Community Health Network began implementing the patient financing program from CommerceHealthcare®,
the bank helped the health system cultivate buy-in. “They provided
in-person training and curriculum for our client services and cash
posting teams, which are the staff who are most involved in payment plan
enrollment and payment posting,” Bills said. “The bank also created
content for a roadshow to present to key health system executives across
the network, explaining the bank’s unique advantages. Another benefit
was they partnered with us to create call scripts, so that any patient
interactions were in line with our values and goals.”
Since implementing the program, Community Health Network has seen
meaningful results. “We were able to expand our patient payment choices
and consolidate payment plans while increasing cash on hand for the
network,” Bills said. “We’ve also received a lot of positive feedback
from patients as they express gratitude for the longer payment plan
lengths. We are exploring the bank’s pre-service collections program
because we feel the ability to use the same vendor for pre- and
post-service will be helpful in ensuring consistency for our patients.”
A continuously evolving effort
Looking ahead, CommerceHealthcare® is working to enrich
the online aspects of its patient payment program. “We’re working with
providers to implement self-service online access,” Huebner said. “This
allows patients to see their bills online and then choose the line of
credit to finance them without having to talk to someone at the hospital
about setting up a payment plan. Many hospitals are implementing
technology that lets patients see what they owe online and determine how
they want to pay with a menu of payment options. Making our line of
credit another selection on the menu will further enable patient choice
and convenience.”
CommerceHealthcare® is also retooling its technology to
align with price estimates. “Generating a reliable estimate has
traditionally been challenging in healthcare, and sometimes the
estimates are not accurate,” Huebner said. “We have built our technology
so providers can manage price estimates on the back end. Once insurance
adjudicates, if there are changes to what the patient owes, the
provider can adjust the patient’s line of credit. There are no penalties
for making these changes. This gives providers the freedom to make
adjustments and peace of mind knowing they can tweak the lines to match
actual costs without penalty. Over time, we hope to refine the patient
estimate portion of the offering as the ability to accurately estimate
care costs improves.”