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nTelagent in the News
How Would You Like to Pay for That? Using a Retail Mentality in a Healthcare Setting
Medical News, Inc., by Cindy Sanders, 6/09
In these tight economic times when providers are already facing shrinking reimbursements, who can really afford to write off income? Yet, hospitals and practices leave money on the table every single day.
An entire industry has sprung up to help healthcare providers maximize income through gained administrative efficiency, coding and billing assistance, revenue cycle management, smarter financial practices and a host of technology products designed to make sure payers pay. One such company –– Franklin-based nTelagent, Inc. –– has developed a Web-based, proprietary application called the Self-Pay Management System (SPMS) that looks at healthcare transactions in a similar light to other retail businesses.
In order to collect all that is owed by patients and third-party payers, noted nTelagent Chairman and CEO Earl Winter, it is necessary to adopt a "point-of-sale" mentality. After all, he marveled, it's hard to image a customer being allowed to leave Sears with a new refrigerator without first putting down some form of payment or setting up a credit plan. Yet, patients walk out of healthcare facilities on a regular basis without a payment plan in place.
The company, which has been in business six years this month and has clients in 29 states, launched the basic SPMS system a little more than three years ago and has continually added functionality. Two of the latest options are an updated insurance verification tool and the healthcare cash register.
Most current insurance verification tools only confirm coverage without providing benefit information in a useful format. Even when delivered electronically, staff members typically have to print out a 15-page … or more … report to try to determine covered benefits.
"I'm an ex-accountant, and I couldn't even figure out what was owed by the patient," Winter said.
There are two documents used to verify insurance –– the 270 and 271. The first is a request sent to a payer to verify insurance eligibility. The second is the response issued back from the payer with information on benefits, effective dates of the policy, balance remaining on deductible, lifetime maximums and more. It's this response that the SPMS retail application has boiled down to searchable, intelligent information for quick referencing of covered charges.
"nTelagent's powerful system doesn't just provide information for the sake of information," explained Winter. "We actually provide our clients with actionable items, telling registrars and financial counselors exactly how to handle each patient account."
The Web-based, real time tool combines the insurance information with patient demographics and a provider's business policies to clearly spell out a patient's responsibility in terms of co-pays, co-insurance, deductibles and other out-of-pocket costs.
"Pretty much every patient owes money, and it's becoming a bigger and bigger portion," noted Winter. "The provider can start working out arrangements with the patient at the point of service. This applies a retail mentality because really, healthcare has gone retail."
He added, "Patients are happier, as well, because accounts are all managed in an accurate, consistent manner." Winter pointed out that it's frustrating for a patient to have no idea what they'll be charged. "If I know what it's going to cost me up front, that takes a lot of anxiety off of me."
Furthermore, the system identifies charity care patients so that providers can accurately earmark those patients to receive available funding wherever appropriate.
Coupled with the new verification tool is the option to add the healthcare cash register, which turns the front desk into a checkout counter that accepts credit cards, debit cards and checks. The system also allows the use of Automatic Clearing House, which creates a payment plan where a set amount is automatically deducted from the patient's bank account over a specified amount of time.
It gives the healthcare provider the option to apply a discount if the full amount is paid up front or a lesser discount if a payment plan is established on site. Often, Winter said, the monthly amount is less than a patient's cell bill, which makes paying off a medical bill suddenly seem much more manageable.
It is crucial, Winter stressed, to set up payment options during the patient encounter. "After they (patients) walk out the door, statistics show providers collect about 16 cents on the dollar … not a very good return on investment."
Winter added the bottom line is that hospitals and large practices simply can't afford to leave any payments uncollected. "Bad debt numbers are going up substantially," he said, adding that a 2008 study by his company found that nearly 70 percent of all bad debt is the result of insured patients rather than the uninsured.
"It's not just critical access hospitals that are losing money; 300-, 400-, 500-bed hospitals are losing money. Their foundations are losing money, too. They can't even count on the investments they've got to carry them through," he added of today's volatile marketplace.
Winter continued, "The average balance for an urban hospital is about $1,200 per registrant. The average balance for rural hospitals, because they have fewer services, is about $700-$800 (per registrant)." He added that a $2,500 deductible is now considered a "Cadillac" plan with many plans having upfront, out-of-pocket costs in the $4,000-$5,000 range.
This shift to higher patient responsibility for bills started several years ago and is only expected to increase.
"The service providers have got to apply a retail model," Winter stressed. "A big percentage of their revenue comes from the patient … even if they're insured, a portion comes from the patient. That's the reason we say healthcare has gone retail. It's the way people buy everything else."
He added, "Forty-eight million uninsured is a manageable number. We've really gone to 300 million people who are uninsured up to a point."
For those employing the old, unsustainable collection model, Winter had a dire prediction. "Unless a provider has moved to a retail model that includes a point-of-service solution, then they are doomed. It's only a question of time."
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