Q&A with David Shelton, CEO, PatientMatters.
Rural hospitals face unique challenges, as these organizations serve high-risk populations and struggle with limited funding. These hospitals play a crucial role in their communities, but many are facing an urgent financial dilemma that has been exacerbated by the pandemic.
In fact, nearly half of all rural providers were operating in the red even before COVID-19 struck. To keep their doors open and continue serving patients in their communities, rural hospitals need sustainable and affordable solutions to engage patients from the very start of their healthcare journey.
How has the COVID-19 pandemic impacted patients and providers in rural areas?
Although COVID-19 infection rates were initially much lower in rural areas, we’re seeing an uptick in cases. The last Red-Zone Report reflects more than half of the country’s rural counties have reached the Red-Zone level, meaning areas where the rate of new COVID-19 infections is 100 or more new cases per 100,000 residents. From September 27 through October 3, rural counties were responsible for 23.5% of all COVID-19-related deaths with rural cases comprising of 20.5% of all new U.S. infections.
Rural communities are thought to be at higher risk during the pandemic. Rural residents often travel long distances to reach hospitals, healthcare facilities, and physicians which limits access to critical care and testing. Rural occupations often require working closer than the recommended 6-foot distance and are considered critical businesses that don’t allow for remote work.
The infrastructure is also limited including the number of healthcare providers, hospital beds, ICU beds, ventilators, and test supplies, and internet access. Small retail pharmacies encounter supply delays as they are unable to compete with national chains. All of these factors can lead to the perfect storm in rural America, especially as the rural communities were already considered highly vulnerable before the pandemic.
What are some tips for rural hospitals to improve their financial situation amidst the pandemic?
The COVID-19 health crisis has affected every community, but even more so those who serve and reside in rural America. The pandemic’s impact on rural communities continues to expand and evolve, so here are five tips that rural hospitals should focus on that will yield significant improvements in revenue, cash flow, and bad debt.
Tip One. Rural hospitals, more than ever before, need to establish a strong relationship with their patients. This is especially beneficial for rural hospitals as patients and hospital staff are often friends, neighbors, and many times relatives. The key to a strong patient relationship is upfront, transparent patient communication. Before services are delivered, hospital registration staff have the opportunity to develop trust by providing a thorough explanation of patient financial obligations and identifying potential barriers to payment. Financial conversations can be sensitive and patients can feel apprehensive. It’s important that hospitals have the ability through technology and workflows to train staff on how to address each patient’s unique needs.
Tip Two. Patient insurance coverage should be confirmed and explained. Hospital registration staff should have tools to easily identify and verify coverage, as well as obtain prior authorization when needed. As rural residents are more likely to be uninsured compared to other Americans, rural hospitals should consider implementing patient advocacy assistance with government programs, including Medicaid, County Indigent Healthcare, and other local assistance programs. An advocate can help the hospital’s uninsured and underinsured patient populations by identifying federal, state, local, and third-party financial benefit programs that will increase uncompensated care collections.
Tip Three. Accurate price estimation and communication is key to price transparency. A rural hospital’s estimation tools should easily verify and generate procedure-specific patient financial estimates that include insurance deductibles, co-pays, coinsurance, as well as payment plan options. When patients receive an accurate and clear picture of their financial obligations, including payment plans before care, the likelihood of patient payment also increases.
Tip Four. Determine the likelihood of payment for each patient or guarantor. With the prevalence of high deductible plans, it is improbable that insurance will cover all of a patient’s medical bills. So a hospital’s ability to segment patients based on their unique financial circumstances is crucial. When designing a patient payment plan, the registration staff should evaluate the patient’s credit standing, payment history, and residual income. By segmenting patients on the scale from those least likely to pay to those who could pay in full right away, rural hospitals can clearly identify and act on patient payment opportunities.
Tip Five. Create personalized patient payment plans. Equipped with accurate bill estimates, insurance information, and propensity to pay, registration staff can tailor communication strategies to educate and inform rural residents, identify payment plans to fit the patient’s needs, and in turn collect the full amount owed.
Increasing collections in the current environment can seem like an arduous task, but by acting on these five tips you can create a comprehensive approach that will help to buoy up your hospital’s financial standing as well as endearing patients to your facility through personalized financial care.
What can rural hospitals do to help patients meet their financial obligations? Particularly self-pay patients.
As mentioned before, price transparency is key. Self-pay and insured patients want to understand what their insurance will cover and their out-of-pocket (OOP) obligations before care is received. A rural hospital should not wait for the statement to drop before engaging with the patient in financial conversations.
As a whole, rural patients are like any other patient – they want to pay their medical bills but to do so they need a financial arrangement that fits their circumstances. For instance, instead of offering patients a set monthly payment plan regardless of the patient’s balance or ability to pay, rural hospitals should evaluate the financial circumstances of each patient. Credit standing, payment history, and residual income should be assessed when identifying a plan that fits for both insured and self-pay patients.
Rural hospitals need to show patients their willingness to work with them, no matter their financial situation – identifying a solution where both sides can be satisfied. Direct, transparent communication from the very start of a patient’s care journey will drive long-term financial success.
Looking beyond the pandemic, what can rural hospitals do to keep their doors open?
For rural hospitals to withstand the pandemic and what’s ahead, they must restructure existing practices and processes with tech-infused solutions that drive productivity, profitability, and patient financial engagement at the start of the patient care journey.
Similar to the clinical side of patient care, each rural patient’s financial situation should be addressed on a case-by-case basis. This can be accomplished when the right patient access technology is in place. As with a clinical diagnosis, a patient’s financial situation can vary considerably – some can pay their bills at the point of service, others require a prolonged payment plan, and yet some may never meet their financial obligations. Customization is key to effectively addressing rural health’s challenges of shrinking reimbursements and staffing shortages.
Effective technology empowers hospital staff to treat patients as unique individuals through automated workflows that guide the staff-patient conversation to identify appropriate payment plans. Through individual assessment of a patient’s financial circumstance and ability to pay, staff can effectively address payment barriers and lack of patient financial awareness.
Additionally, patient access technology facilitates accurate data capture to prevent errors that result in costly claims denials and low patient satisfaction. When implemented at the pre-access stage of care, technology can provide the groundwork for a frictionless patient financial experience that fine-tunes financial clearance and prevents surprises.
How will the forthcoming price transparency rules impact rural providers? What can they do now to prepare?
Earlier this year, President Trump signed an Executive Order requiring hospitals to provide patients with easily accessible standard charges information for hospital items and services effective January 1, 2021. To comply, hospitals must publish standard charges in two ways: 1) A comprehensive machine-readable file, and 2) A list of “shoppable” services that can be scheduled by a patient in advance. The “shoppable” services must include the 70 CMS-specified and 230 hospital-selected services provided by the hospital.
The concept of price transparency is not new to the healthcare industry and will likely continue to be a hot topic in the future. Although rural hospitals are not exempt from the mandate, price transparency may not impact rural hospitals in the same way as it could for metropolitan or urban hospitals.
The Rural Hospital Coalition has voiced its concern that the CMS’ estimated annual cost of $1K for price transparency is a substantial burden for rural hospitals as they are already juggling operations on smaller margins. Other critics have raised concerns the disclosure of insurer-negotiated rates could harm patients by giving an unfair advantage to insurers. Many are also concerned rural hospitals won’t be able to pull the information required and deliver it to patients in a user-friendly manner.
Although price transparency may feel overwhelming, rural hospitals should view it as an opportunity to address patient access barriers to better serve their rural communities. By automating the registration process, helping patients understand their OOP responsibility, and personalizing patient payment options, patient access barriers lessen and access to care improves. Price transparency is an important step to adopting strategies that address the impact cost of care has on patient access as well as the hospital’s bottom line.