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the revitalization of a business office: how one system increased its self-pay collections Gardner, Doug;Tempest, Randy Healthcare Financial Management; Mar 20071'61, 3; ProQuest pg. 80

FEAIURE STORY

Doug Gardncr Randy Tempest

the revitalization of a business office how one system increased its self-pay collections Three years ago, the HealthAlliance of Greater Cincinnati learned

a valuable lesson: Collections mean more than simply reminding patients of balances due.

AIACTANCE

Aftcr undcrgolng a dramatic lranrlonnalion In rclf-pay

collccllonr, lhc Hcahh Alliancc of Grcetcr Clnclnnrtl

collcctcd$34mllllon ln 2O06, up from $19 mllllon In

2fiX.Ihc organlzatlon war ablc to rchicvc this Incrcan wlthoul any docroarc in paticnt ratlrfaction.

An unexpected medical e mergency or chronic illnees ceu be overwhelming.

The medical eihration iteelf ie etreeeful, but dcdingwith insurancc compa-

niee or askingfor finsncial aseietance with medicd bills can place paticnte

and their families itl en evcn morc strenuous situatioo.

Therefore, eclf-pay collection dcpartmenta need to offcr eolutioDe to

patiente and tbeir familiee to reeolve the bill; this may include offering

charity care or eetting up realistic payment arranS€meut8. In other worde,

account rcpresentativee need to do more thaa simply remind patients of the

balance duc.

Thc Origlnal Environment: Manuel Collcctlonr end Muhlplc Accountr In zoo3, the eelf-pay collections department at HealthAlliance of Greater

Cinciunati wae doing juet that eimply remindiag patieuts of their balaacea due. lLe department followed up only on balancee greaterthan $r,ooo and outsourccd Bmall-balancc accounte to a aingle veodor. Each datc of ecnrice

received an individud accouat nunber, which meant a patieut could havc

multiple accouats owned by different account repreaentativee. Thc team

uecd an accounte rcccivable management oy8ten that updated electroaic

work liete daily. Howcvcr, this 8y8tcm could not -aintain Pa)rmcnt arangc-

ment8, 80 functionalitywas outeourccd at a coet of $5oo,ooo Pcryeiu.

The dcpafiment operated from 8 a.m. to 5 p.m.. Monday through Friday,

and each account repreaentative bad hig or her own phonc and voice mail-

box. The fundamental worHlowwaa inefficient: Account rcPreocntatives

would review their work liete and makc manud calle, which reeulted il very few contacte per day. On cdls that did not rceult in a contact, the accouat

rcpre8entative would leave a meesage. Vhen thc patient retumed the cdl' it would be to that Eame account repreaeotative'e direct line. Becauge thc

account rcpresentativc often was on anothcr call, the inbound cdl would be

80 MARcH2ooT herhhorr llnrnclrl mrmgrrnrnt

sent to voice mail. Thus, the team answered vir- tually no inbound calls.

Because of the large volume of accounts and the

fact that associates were working in a manual

environment, follow-up on individud accounts

occurred only once every two weeks. Low- dollar,

outsourced accounts were also not gettingthe

attention that the Health Alliance desired.

To add to this inefficiency, account representa-

tives reminded patients ofthe account bdance but

did not ask for payment, offer payment methods,

or suggest payment arrangements because they

didn t want to offend or alienate patients. The

team would accept eredit cards-but only at the

patient's request. There was no focus on immedi-

acy of payment. And dthough the Hedth Alliance

attempted to enroll patients eligible for charity

care, its account representativee had to manudly

print letters and forms and mail them to patiente.

The CFO and director of patient financial services

decided that some changes needed to be made,

including hiring a manager from the financial

services industry with collections experience to

retool the department.

Initial Changcs: Guidelines, Training, and lncentlves When the newhire joined the HealthAlliance.

the etaffwae informcd upfront that significant

changee would be made with the goal of increas-

ing collections. Having come from a collections

background, the new hire possessed knowledge

of effective office practices that are standard in collections but not aE widespread in health care.

Many ofthe changes brought the department cur-

rent with generally accepted collection office

practices and were made immediately.

Office hours. Office hours were extended to 9 p.m.

and to include Sahrdays in order to reach patients

during houre they most likely would be at home.

Each etaff member was scheduled to work two

Saturdays and two evenings a month. This

accomplished two objectives: getting better cov-

erage on the porffolio, and eliminating reps who

were not willing to commit to the necessary

changes.

Guidelines and procedures. Although account rep-

resentatives previously could accept credit cards

by phone ifthe patient requested it, the process was not as secure as it needed to be. The office

created settlement guidelines and implemented a

system to securely accept credit card and check

payments by phone. The new system dso allowed

for the creation of recurring pa)rment schedules,

which provided more flexibility in extending arrangements to accommodate patient needs

without increasing the risk of that arrangement

breaking down the longer it continued.

Training. The team was trained to ask for payment,

offer payment options, and set up payment

arrangements. The ultimate god of the depart -

ment shifted from making a customer service fol- low-up call to collecting money.

Although effort and attitude continued to count,

the new manager also began to track results-and

results meant pa;rments were being made. The

manager wa6 eventually able to report accurately

on group and individual results and provide feed-

back to help team members maximize the ir time.

Additional assistance. Health Alliance added a

second outsourcing vendor to collect on the

ABOUT THE HEAITH ALLIANCE OF GREAIER CINCINNAII

In Januery 1995, Chrirt Horpital rnd th Unlvorrlty of Clrrlnnatl Boardr of Trurtccr approvod thc formrtlon of r folnt opcratlry comprrry, n!m.d thr Hcahh Alllancc of Grcrlcr Clmlnnatl, to rorvr thr grerbr Clnclnnatl rnd northcrn Kentucky eror. Thc agrocmcnl crllcd for comhnlng opcrrilng budgcb and for rharrd ruvcnuc rnd crpcmcr by tho holpltrlr.

Thc Intcaratcd dclivcry ryrtcrr, toteling 1,200 llccnrd bcdr, now comprlrr rcvcn horfitrb,lncludlng tcrchlng and rcutrcm horpltrlr: Chrld Horpltal, Univcnity Ho:pltal, St. Lulrc Horpltalr(2), Jodrh Horpltal Fort Hrmllton Horpttd, and Drakc Contca (An ctOhth hordtrl, Wcrt Chcrtcr Mcdlcal Ccntcr, b rchcdulcd for complctlon In Drccmbcr 2008) lhuc frllltlo oflcr a rrrpc of mcdlcrlrnd rurglcrl rcrvlccr lncludlng a lovcl ltraumr contcq hrllcoptorlnnr- porg cardbc carc;tranrplant (blood end bom mrrrorv, uvrcllarlho nrgloni only hcart trrnrplantatlon programlwomcnl hcalth Includlngthr rrorlltrl lctlllll pcrinetal ccntcr; nourology; oncolog; orthopcdlcr; end rohrbllitrtion rnd bchrvlonlmrdlclnc.

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hlm MARCH2007 81

FEATURE SIORY

small-bdance accounts to create competition

with the existingvendor. It also hired new staff

members who had previous collections experi-

ence and were accustomed to standard collection

practices, such as working evening and weekend

hours, using a dialer, and asking for payment.

Legal process. A relationship was established with

a local collections attorney to pursue accounts in which patients had the resources but were appar-

ently unwilling to cooperate. Accounts were

referred after approval by the manager. In most

instances, accounts were settled without going to

court. This process has added an additional

$3oo,ooo ayear in collections.

I ncent ives. The department introduced incentives,

such as providing lunch for staffwhen the

department hit monthly goals. Individual accom-

plishments as well as winners of monthly collec-

tion contests were often recognized with gift

cards and other prizes.

Subsequent Changes: Technology

Health Alliance then began researching receivables

and contact management systems bytalking

GTOSSARY OI CAtt CENTER IERMS

Automalcd dialcr Equlpmcnt thet eutomat3cally dhlr rpcclllc tclcphonc numbcru on .ccountr, rllowing account rcprcrcnlrtlvcr lo trlk with morc paticnlr, Thc tclcphony cquipmcnt dlalc all numbcn and cllmlnrlo monrwcn, bury rignalr, anrwcdng mrchlncr, and lriplc-lonc callr, plrrir4 only llvc voico to accounl rcprcrontativcr.

Callblending:Thc ability of an automatcd dialcr lo balancc thc dlallng o[ out-

bound callr wlththo rnrwcrlng and tranrlcrring of Inbound callr. Syrtcm rdminic- tratorr rot thc paramctcn lo dslorminc how thcy wani lhc ratlo of outbound-

to-lnbound crllr blcndcd.

lntcgratcd contact managcment sysfem: Thc cntirc ryrtcn that drivcr worHlow and accounl aclMty. lt wortr dlrcaly f rom thc collcction ryricm'r dalabarc lo pbcc callr and truck accounl acllvlly In rcal llmc. An lntcaralcd rplcm rhould havc rll plcccl (drtebarc, dlrlcr, intoractlvc voicc rcrponrc ryricrq automalcd paymcnt

rptc4 volcc rccordlng ryrtcnl and any othcr modulcr) work logcthcrlo makc rll rccount changcr lr lcsounl rcprcrcnlativcr pcrform ihcir tukr.

Unatlended messrging: A tolcphony hature that rllows a company lo crcatc a

dirllng camprlgn lo rpccillc accountr. Thc ryrtcm playr a mcrngc to rnrwcrcd crllr uklng thc pcnon anrwcdng thc phonc to takc a rpcclllc rcllon. ll thc call ir not anrvrcrcd,lhc eulomrlcd mcsago can bc lcft ar c voicc mail.

to collection agencies. After considering a variety

of systems, the organization selected a receiv-

ables management system with an automated

workJlow that management could build to fit the organization s vision of how the department

would work, The system includes an integrated

contact management system, which allows the

team to stop making manual cdls and achieve the

productivity an automated dialer offers.

The dialer allows the organization to increase fol- Iow-up calls from every two weeks to every three

days, until a patient returns the call. If an answering machine or voice mail is detected, a

prerecorded message is left asking the patient to

return the call. This frees account repreBentatives

to actually speakwith patients.

The dialer now runs from 8 a.m. to 9 p.m. Using

call blending, account representatives are able to

answer both inbound and outbound calls, with

the dialer placing priority on inbound calls. Management actively can track inbound volume

and abandonment rate and adjust the dialer's

pace as necessary to ensure maximum effective-

ness. The team now answers an average of?,?oo

inlound calls per month-up from virtually none.

In an effort to st€p up its charity care offerings, the organization began using a third-party vendor

to send automated letters and charity applica-

tions. The charity care application form also is

available in the receivables management system,

allowing the account representative to fill out much ofthe application while on the phone before

mailing it for the patient to complete and sign.

Results

The financial results from the changes have been

dramatic. The receivables management eystem

paid for itself within three months and eventudly began to generate more cash, which was used for clinical areas.

In time, the team gained enough efficiency to be

able to handle all the accounts in-house (includ-

ing low-balance accounts), eliminatingthe annual fees of $r.5 million paid to third-party

82 MARCH 2007 hmltherrc flnenchl mrnrgrnrnt

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FEAIURE STORY

collection agencies. This was achieved without

increaaing the etaff of r8 FIEs. The low-balance

accounts are called ueing unattended messaging,

allowing collectore to focue their efforte where

they caa have the greatest impact.

Ongoing lmprovcmcntr-and Satidaction Health Alliance continues to malc improvements

and add technologr. The team hae inetdled cdl- recording techlologr; also, an interactive voice

response product and additional functiondity to ecreen patients for Medicaid eligibility are in

Process.

Perhape moet important, the self-pay etafffind tle changee to be very positive; many say it i8 8ig- nificantly more satiefyingto be talking to people

than to machinee all day. They continue to be

enthusiastic about their abilityto have a poeitive inpact onthe organization, I

About thc authorr

Doug Grrdnrr ir dircctor, petlcnt llnanclal rcrvlccr,

Hcrlth Alllancc, Clncinnatl, and r mcmbcr ol HFMA'r Southwarlcrn Ohlo

Cheptar ([email protected]).

Rrndl lrrnprrf lr r nrtSoml accounlr rrpucntetlvc, Ontrrlo Syrlcmr, Muncl.,Ind,end e mcmborol HFMA'r lndlanr Prcrrlcr MomodalChaptcr

(randy.tcmpcrt(Oonlarloryrlcms.com).

84 MARCH2007 hcalthcarcflnenclal m.n.g.mcnt

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