Healthcare Business Insights is a community of more than 1,900 healthcare providers across 50 states. We recently published a benchmarking report is focused on three write-off key performance indicators tracked within HBI’s Revenue Cycle Scorecard.
The Scorecard is a benchmarking product that compiles data reported by HBI members on a monthly, quarterly, and annual basis. The Scorecard enables our community to continually compare performance to other hospitals, health systems, and physician practices. Members gain insight into the national average and top quartile, or to the achievements of a narrower group of their peers.
HBI shares data from our Scorecard on specific KPIs our members have told us are important to them. We combine this data with best practices related to those KPIs in a series of reports to help members get their numbers going in the right direction.
Our recent report on write-offs examines year-over-year performance improvement from 2017-2018 on the following metrics:
- Bad debt write-offs as a percentage of gross revenue
- Charity care write-offs as a percentage of gross revenue
- Denial write-offs as a percentage of gross revenue
The case studies in our write-off report highlight the strategies in use at three organizations with strong year-over-year improvement in at least one write-off category. Leaders at each featured organization have shared a tool in use by their teams, which they hope can serve as a model for their peers.
Providing self-service payment options was a major theme across the organizations, with significant emphasis being placed on interactive voice response, payment plans, and more. Other commonalities include insourcing business office functions to gain greater control of outcomes, enhanced denial management work queues, and more. The initiatives in place at the three featured organizations have been compiled into a report appendix, which provides a template project plan for reducing write-offs.
Price Transparency Efforts Reduce Uncompensated Care
St. Luke’s University Health Network in Pennsylvania consistently excels at preventing uncompensated care, achieving above-average if not top-quartile status in both 2017 and 2018 for all write-offs compared to gross revenue. However, the organization still managed to reduce charity care and bad debt write-offs in 2018.
The following are excerpts from HBI’s case study on St. Luke’s University Health Network. HBI members have access to the full case study, as well as a description of the organization’s online price estimate tool.
Some keys to St. Luke’s University Health Network’s success in write-offs are:
- Establish cash prices: Shoppers use a third-party online application to calculate a flat fee for hospital and professional charges based on local market prices. The price is guaranteed if paid upfront.
- Standardize financial clearance: Luke’s University Health Network created a centralized Pre-Encounter Center for all of the hospitals in 2016. Its staff verify insurance, secure pre-auths, calculate estimates for scheduled diagnostic and surgical services, call patients to attempt to collect at least 50% of the estimated costs upfront and answer questions about the online estimate tool.
- Refocus on upfront collections: In 2016, leaders retrained staff on upfront collections and provided scripting. Refresher training is also given as needed. All staff can collect any past-due balance, regardless of where services were provided, and upfront attempts include all cost-sharing types.
- Send email statement alerts: The online app uses email addresses collected at registration or when an electronic receipt is requested to alert guarantors to new balances. Emails are sent once charges are final but before a paper statement is ready. The email links to the payment portal, and 74% of guarantors receiving an emailed statement pay within seven days.
- Automate denial triage: Since 2016, work queues route most denials by root cause to originating staff to research and correct errors, so business office staff can appeal the denials. However, denials related to pre-auths go to the Pre-Encounter Center for appeal. A specialized team of nurses does the same for medical necessity denials.
As a result of the above, as well as other best practices, St. Luke’s Health Network reduced bad debt write-offs as a percentage of gross revenue by 36% from 2017 to 2018, and reduced charity care write-offs as a percentage of gross revenue by 48% during that same period. Furthermore, 85% of patient balances are resolved via one of the organization’s several self-service options, underscoring the effectiveness of giving patients multiple ways to pay their bills.