The PROS and CONS of Credit Card Collections

The PROS and CONS of Credit Card Collections

Jul 14, 2020 | Administrative Safeguards, Uncategorized

Credit card collections are a BIG part of any successful medical practice, and there has been a shift, in the last decade, that more insurance policies are adding co-pays with higher deductibles—which makes getting paid even more challenging.1 One industry report said that “73% of physicians shared that it typically takes at least one month to collect a payment, and 12% of their patients wait more than three months to pay.”2 With the current trend, more medical practices and their billing departments (or outsourced billing firms) are going the route of processing payment via credit cards, which has its PROS and CONS.

In light of this new information, the following are a few pros and cons for credit card processing that we anticipate in the near future and some insights for choosing the best billing software that supports the credit card processing needs of medical practices:

  • PRO: To protect against the dangers of stolen data, fraud, or other compromises in security, practices should seek out medical billing software that has credit card processing built-in, which can help safeguard against these dangers.
  • CON: Security is a big risk, and a leak in data leading to stolen funds can end up in a physician paying out-of-pocket for the breach. It is also important to note that breach of credit card data is also considered a violation under the federal Health Insurance Portability and Accountability Act (HIPAA). 
  • PRO: Implementing credit card processing will reduce long waiting periods for payments from the majority of your patients, and will also reduce the additional effort your billing staff has to extend to collect on overdue notices.
  •  CON: Practices cannot require patients to share their credit card information to receive medical care, and even if patients do share their credit card information, physicians cannot continue to charge the credit card without a patient’s consent.
  • PRO: Physicians can end the process of being a “line of credit” to unpaid or underpaid claims, and collect on funds immediately.
  • CON: You will need to implement internal processes that include, but are not limited to proper personal information storage and security, establishing guidelines on maximum percentages charged per bill, and personal consent forms.

Overall, there are definitely MORE ‘PROS’ than cons for implementing credit card processing for your medical practice, and all the trends are pointing to this being the PREFERRED METHOD of payment in the near future.  EZClaim is proud to announce that it will release an integrated credit card processing solution, EZClaimPay, that is backed by a national merchant services vendor.  [ EZClaim will be sharing more details about EZClaimPay in the weeks to come, via their social media platforms, their monthly newsletter, direct communications, and more ]. 

 

In addition to the credit card collections PROS and CONS above, we reached out to one of our partners, Live Compliance, to gather some regulatory and security advice. They suggested the following:

  • When accessing, transmitting, storing, or receiving any Protected Health Information (PHI), the Health and Human Services (HHS) Office of Civil Rights (OCR) mandates that you are to maintain HIPAA compliance. 
  • When accepting, processing, or maintaining credit card information and debit card information, you must ensure that your organization is PCI DSS compliant (Payment Card Industry Data Security Standard).
  • In addition to the above Federal regulatory requirements, most states require privacy and security compliance requirements to be implemented, along with strict adherence to the privacy of Personally Identifiable Information (PII) and Breach Notification requirements.

For more information on your compliance requirements, visit Live Compliance for a Free Organization Assessment to identify and uncover your organization’s vulnerabilities.

 

If you are not a current customer of EZClaim, we would very much like to connect with you.  You can either schedule a one-on-one consultation with our sales team, view a recorded demo, or download a FREE 30-day trial right now. For detailed product features or general information about EZClaim, visit our website at ezclaim.com.

 

[ NOTE: If you would like a quote on the upcoming merchant services, please e-mail sales@ezclaim.com your last three merchant statements.  For more on our ongoing updates and industry news, you can follow EZClaim on Facebook and LinkedIn ].

Source Material:
1 – America’s Health Insurance Plans” report that there were 20.2 million co-pays in 2017, which was up tremendously from just over 1 million in 2005.
2 – Source: From InstaMed’s annual “Trends in Healthcare Payments” report.

> For more on this topic, read a previous article, “Why Do I Have A Balance? – Patient Payments”

Getting Claims Right the First Time

Getting Claims Right the First Time

Dec 10, 2019 | Alpha II, Claims, Partner, Revenue

Getting Claims Right the First Time

Getting Claims Right the First Time. Contributed by Timothy Mills, Chief Growth Officer, Alpha II, LLC

The numbers are staggering. Industry averages report that nearly 20% of all claims are denied, rejected, or underpaid. And considering the cost to rework claims — not to mention even higher appeal costs — as many as 60% of returned claims are never resubmitted. 

With figures like these, it’s no wonder medical practices continue to face intense financial pressure. As negotiated reimbursements stagnate and operating expenses like rent and salaries continue to increase, the struggle to maintain steady revenue becomes even more crucial. For many practices, conducting reviews of their revenue cycle workflow would show gaps in their claims process. The good news is – these gaps can be bridged with the help of emerging technology. 

With a saturated market of coding, billing, and compliance solutions, how do you begin to find the right technology for your practice?  When trying to improve revenue integrity, it is important to understand exactly what vendors offer. For example, consider the term “first-pass claims rate,” which is still used by some healthcare IT vendors to represent the number of claims initially accepted by payers. But what is often overlooked is the number of those initially accepted claims that will be denied or underpaid. A better question would be – what percentage of claims are getting paid the first time they are submitted?

The fact is, practices that do not employ the latest clinical coding and editing tools within their revenue cycle are leaving money on the table. This is revenue that is rightfully theirs but is being pursued at high, incremental costs. It’s time to rethink traditional denials management practices, move beyond the “first pass claims rate,” and embrace the future of denial prevention.

It’s your money. Go after it.

Still not convinced that investing in emerging clinical coding and editing software can save your practice money? Let’s see what relying on traditional denials management methods might really be costing you. 

Each rejected, denied or underpaid claim represents earned revenue your practice is missing out on. Based on industry reports, the average cost to rework a claim has been pegged at more than $25, and appeal costs can skyrocket to over $100. It’s estimated that as many as two-thirds of all denied claims are recoverable. But practices often weigh the reimbursement amount of a claim against the cost to rework or appeal that claim. For smaller claims, many decide it just isn’t worth the effort, which is why getting claims right the first time should be the ultimate goal.

So how much are practices losing by simply correcting and resubmitting denied claims using traditional denial management methods? Let’s look at an example using figures from an actual mid-sized specialty practice. This practice submits 1,900 claims a month and the average claim is $150. They have a better-than-average denial/rejection rate of 10 percent. Even with that lowered rate, this practice is losing roughly $28,500 a month to unresolved denied claims. If two-thirds of those denied claims are recoverable, they stand to recoup $19,095 in reimbursements after the claims are corrected and resubmitted. Factor in the cost associated with reworking denied claims using the industry average of $25 per claim, and this practice is spending $4,750 in administrative charges alone to recover their own revenue. This brings their actual recovered revenue down to $14,155 per month or almost $170,000 annually.  Investing in a comprehensive clinical coding and editing solution is still cheaper than what the practice spends per month when reworking denied claims. 

The Alpha II Solution

Are you ready to submit precise claims the first time?  Contact Alpha II, a leader in revenue cycle solutions. Our comprehensive clinical claim editing solution, ClaimStaker, covers the entire continuum of care, verifying claim data from the payer’s perspective and allowing for corrections prior to filing.

Check out our Denial Impact Assessment Calculator to see what your denials really cost your practice or contact us today for a free personalized Claims Assessment. See why ClaimStaker does more than clear claims. It gets claims paid. 

We work hard to update our blog to keep you up-to-date on what’s happening in the field of medical billing software. If you have a topic you would like to see discussed, please contact us.