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Healthcare Receivables


Mary Lee Decoster is no stranger to the challenges faced by professionals working within the hospital financial management field. Mary Lee is a 50-year industry veteran. In this interview, Mary Lee shares lessons she has learned throughout her impressive career.

 

CaptureNet (CN):  Thank you for agreeing to sit down with us for this interview!  Please give our community an overview of your career experience.

Mary Lee Decoster (MLD): I’ve worked in healthcare receivables management for my entire career – over 50 years now. I got my start as a medical assistant/office manager for a pediatric surgeon in Seattle.  I learned everything about receivables management in his practice: scheduling, charge capture, coding, documentation, record management, third-party billing, follow-up, and collections.  In 1990 I began working on the vendor side within the industry. I started working for a company that provided eligibility services, third-party follow-up and bad debt collections.  Since then I’ve had the opportunity of serving as a senior leader for a handful of Revenue Cycle Management Companies.

 

CN:  What were the biggest challenges you faced as a hospital finance executive?

MLD: First, I’d say staffing. Every organization I have worked with has experienced financial challenges resulting in the need to reduce staff.  It doesn’t matter what you call it: “Downsizing”, “reduction in force,” “rightsizing,” “hiring freeze…” the challenge is the same: having to identify who will remain. These are people, and regardless of who is let go, the outcome is heartbreaking. Typically, Human Resources would issue the criteria for the decision based on past performance scores, tenure, and/or functions replaced by automation. The great HR Departments offer help place those displaced persons in open positions within the organization (assuming they meet the requisite qualifications).  Over every other challenge, this one is the most difficult.

Another challenge is changing hospital software systems.  Creating the project plan, putting the resources in place, scheduling the testing, and scheduling the training, all the while trying to achieve the impossible task of experiencing a zero decline in cash flow during the transition. Technology continues to become more sophisticated.  The relationship between IT and Revenue Cycle has evolved.

Requirements for ongoing quality and efficiency improvements is a third challenge. “The same old routines” will not meet your needs forever. Workflows must be adjusted as staffing changes and the need for new technology and improved outcomes arise. There is no “rest” in the revenue cycle.

In addition to those challenges, today’s executives face some additional challenges. Chronic reductions in payment from the government and third-party payers continue to squeeze cash flow, reserves and constrain capital spending. There has been a shift in delivery models from the inpatient to the out-patient environments coupled with a reduction in reimbursement for those same services. Lastly, merger and acquisition activity is shrinking the market and consequently shrinking the opportunities. There will be a need for fewer finance executives in the future.

 

CN: What do you know now that you wish you knew then?

MLD: Over the years the most important and lasting lesson was related to “building relationships”.  Networking with peers both inside and outside of the organization has become ingrained in my everyday actions.  This is critical if you are to stay abreast of changes and maintaining a focus on managing projects to success.  Having allies across enables you to help one another, saves time, and supports better outcomes.  Networking outside of the organization provided me with an unlimited source of knowledge when I needed help to find answers and solutions.  Revenue Cycle leaders are very collaborative, we’re all struggling with the same regulatory requirements, the same payers, and the same reluctant patients.

Another important lesson was realizing the role revenue cycle staff plays in educating the consumer about how their health insurance works.  The average consumer has a vague knowledge of deductibles and co-pays, where most do not understand why they have an out of pocket responsibility AFTER the deductible has been met.  I wish I had recognized the importance of being the Educator to the health system customer earlier in my career.

 

CN: I’d like to switch gears. Self-pay recovery has, historically, not been an area of priority for Revenue Cycle leaders. How has the role of self-pay collections changed over the last decade?

MLD:  There have been many in the healthcare industry that has resulted in shifting more of the cost of healthcare services from the payer to the patient.  Commercial and government payers continue to shrink reimbursement.  Consumers are covered by insurance plans with high dollar deductibles which must be met before the insurance benefits begin to cover costs.  Published research reveals more than half of the U.S. population does not have savings to cover unexpected medical services up to $3,000.  Healthcare providers cannot absorb both reduced third-party payments with unpaid patient balances.  IRS law 501r requires non-profit hospitals to be diligent in defining and offering charity care to maintain their tax-exempt status.

Today, instead of being at the back end of the revenue cycle, the patient out-of-pocket responsibility must be identified and collected prior to or at the time of service. 

Self-pay accounts receivable have grown into one of the top four or five payers within a healthcare provider’s accounts receivable portfolio.  High dollar deductibles, combined with shrinking reimbursement from government and commercial payers, has resulted in more dollars owed from the patient’s pocket.  Collection activities have had to be refined in response to the surge associated with patient responsibility.  The collection process needs to be multi-faceted to ensure there is an option for every patient, tailored to the individual ability to pay.  The best solution includes a conversation with the patient to confirm the patient’s ability to pay, in full, over time, or with assistance.  Providers are now asking for payment (some call this a deposit) made in advance of service, offering well-defined payment plans, patient loan programs, and assistance when financial need is determined.  Healthcare providers have developed their unique set of policies and practices. The best recovery partner will be able to configure solutions in alignment with the provider’s revenue cycle strategies.

Historically, providers were often involved in defining the treatment cycle for self-pay receivables.  As technology progresses, Self-pay recovery is less of a core expertise for hospital’s revenue cycle teams, which has necessarily resulted in a transition toward embracing the best practice solutions being offered by the experts in self-pay recovery.

 

CN: How important is self-pay recovery to a hospital’s revenue cycle today?

MLD:  The self-pay portfolio is now one of the largest payers within accounts receivable.  More of the healthcare payment has become the responsibility of the patient.  The collection of patient balances must be prioritized; if not, the provider’s cash flow will erode, and the fiscal integrity of the health system will be compromised.  Additionally, the approach to recovery must be encompassed within a culture focused on high-quality customer service.  The best customer service approach begins with education for the patient, to ensure there is a complete understanding of what the balance represents, and why it is the patient’s responsibility to pay.

 

CN:  Do you feel self-pay recovery is an area that is often neglected?

MLD: Many hospitals and health systems have identified self-pay collections as a priority; where there are many others who have yet to identify the potential impact of the growth in self-pay receivables.  The challenge for the majority of hospitals is their internal lack of tools, technology, skills and expertise necessary to be effective in collecting patient balances.

 

CN:  What’s an important factor in improving self-pay recovery?

MLD:  There is no one factor which can be defined as “the” most important needed to improve self-pay recovery.  Multiple factors are involved, many of the critical factors are not available within the hospital revenue cycle department and must be acquired through a third-party relationship. CaptureNet represents a state of the industry active self-pay solution, beyond which I have never seen in any other healthcare vendor providing this service…and I’ve seen them all.

In my 50 years of revenue cycle leadership, I have never met a self-pay recovery vendor as robust and successful in their approach as CaptureNet; fresh, high-tech, human and compassionate.  Their positive results for clients are proven over and over.  The health system which elects to partner with this firm will enjoy the rewards within a very short period. There are four distinct technology-driven areas that work together to achieve CaptureNet’s level of performance: analytics, workflow automation, customer service, and patient education.

CaptureNet begins the partnership by gathering two years of data from the health system; then analyzing the data to create a recovery model unique and personal to the individual hospital and it’s patient population.  Rather than a one-size fits all credit bureau propensity-to pay-score, CaptureNet uses superior analytics to evaluate the payment history associated with the client hospital and adds individual guarantor data, resulting in the creation of a propensity-to-pay score which is specific and unique to each of the hospital’s patients.  Intelligence derived from the data recognizes that how patients living in a suburb of Chicago pay their hospital is different than how they pay their bill living in downtown Phoenix, or in a rural community in California.  It is important to note that CaptureNet’s analytics are so advanced, they are able to accurately project at referral the lift in cash flow associated with self-pay collections.    No other collection vendor offers the use of their Business Intelligence Analytics tool to their clients.

 

CaptureNet Process

CaptureNet Process 3

 

CaptureNet’s BI platform enables hospital leadership to review collection performance from any perspective; a point in time trended over time, as well as the ability to drill down to a specific patient account.  The client user has a library of stock reports available or can create ad hoc reports specific to a question, or a need.  I have never seen another early-out vendor offer their collection database to the client;  notes, digital recording of every call, statement history, the entire database of all activity becomes the client’s to use.

 

CN: If you could offer one piece of advice to those executives, what would it be?

MLD: The Revenue Cycle is your cash machine, it needs resources, both in manpower and in technology.  Don’t ignore it. Bring the leaders to the table, ask them what they need and support them.  The days of the “business office” working at the back end are over.  Revenue Cycle begins with scheduling and financial clearance. This should start up front, prior to the provision of service.

 

CN: You’ve mentioned partners, specifically technology. With regard to revenue cycle, do you think these vendors “get it” or are they pushing products rather than solutions?

MLD: Both.  There are some expert RCM vendors, but there is more middle of the road RCM vendors who are doing what it takes to get by.  While some RCM vendors support the full-range of revenue cycle functions, front to back, including the option for a health system to outsource their entire revenue cycle, others are specialized to particular critical processes, such as active self-pay, bringing their technology to the operation.

When choosing a vendor, know your needs. An RCM giant may be more challenged to create a unique, customized solution for your patients.  A smaller firm can be more nimble, much less resistant to custom solutions, more open and ready to do what it takes to meet the unique needs of a particular system or community.

 

CN: We are honored to be part of your professional network. In closing, how do you feel CaptureNet is different from other solutions you’ve worked with throughout your career?

MLD: CaptureNet’s software is very sophisticated. CaptureNet provides that end-to-end active self-pay solution necessary to optimize recovery at an accelerated pace. I’m impressed with the depth of analytics provided. CaptureNet continually evolves its services by enhancing and adding features. As the CaptureNet team identifies a need or an opportunity to improve self-pay collections, the software evolves to improve their solution for clients.

I’m also very impressed by CaptureNet’s understanding of the value of education.  Consumers will pay their bills once they understand the mechanics of insurance processing and payment.  CaptureNet provides this education in multiple formats:  on the phone, on the statement, on their website, to their clients, their client staff…the education doesn’t end until the consumer has an understanding of the bill.

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