Reduce Exposure to Financial Risk With a Financial Counseling Program

Gabe Torres

Over the past few years, the healthcare industry has seen a substantial increase in patient out-of-pocket responsibility. Consider that coinsurance out-of-pocket expenses averaged $3,003 in 2012, up from $2,076 in 2011. This change has brought lower premiums but increased patient responsibility.

With this shift of risk from payer to patient also has come a change in the nature of collections at the oncology practice level. In the past, a practice would collect a nominal copay and possibly a deductible, and the remainder would come from the payer and possibly also from offsetting contractual adjustments. In today’s marketplace, patients are now responsible for such high sums that there is a substantially higher risk of failure to pay. Data from the 2012 ICORE Medical Pharmacy and Oncology Trend report estimated that increasing copays and out-of-pocket maximums could have an average annual negative impact of $184,117 per physician.

How do we avoid losses in these changing times? A well-tailored financial counseling program can help a practice minimize exposure to financial risks due to increasing patient responsibility. A well-planned financial counseling program rewards practices in significant ways by decreasing financial risks and reducing anxiety and stress for patients and their families during an already difficult time. While programs may look slightly different from practice to practice, there are basic tenets successful programs have in common.

Determine the practice’s collection philosophy. When it comes to patient collection methods, every practice is different. Even physicians within the same practice can have different philosophies on how collections should be managed. One of the first steps when creating a financial counseling program is to understand these nuances and set basic ground rules. Practices should define hardship requirements and determine what discounts and down payment options will be offered. It is important that these programs do not infringe on any contracts with pharmaceutical companies and payers. The best outcomes happen when sound guidelines are unilaterally applied throughout the practice.

One commonality of successful programs is a dedicated financial counselor (FC) or coordinator who centralizes the various functions of patient collections and reimbursement. FCs have a tough job: they must strike a delicate balance between talking to patients about their treatment costs during a pivotal point of their lives and ensuring the financial viability of the practice. FCs must have a deep understanding of reimbursement issues and know how to coordinate assistance for patients in need. For these reasons, it’s critical to have the right person assigned to this important job. FCs take the lead in calculating patient out-of-pocket costs and obtaining pre-authorizations. Further, he or she will talk with patients about their out-of-pocket responsibilities and other coverage aspects, including their ability to afford prescribed medications, and explain any payment plan options that may be available.

A key to reducing financial risk to the practice is to quickly identify patients who need assistance and may qualify for assistance programs. This identification should be made before treatment has started. Because these programs are in high demand, eligibility requirements are continually changing, and this can make applying for these programs overwhelming for patients and their families. An FC can help patients and their families get through the process with the least possible amount of confusion and stress.

The role of an FC goes beyond the initial financial discussions with patients. Counselors should also proactively monitor patients so that issues that arise can be dealt with promptly. These include changes in orders and regimens, billing or payment matters, expiring authorizations, and re-application needs. Most practice management systems can provide reports that assist with monitoring.

Create a culture for effective collections. Another trait of practices that are successful in supporting patients through the financial burden of a cancer diagnosis is a commitment to understanding that the conversation may extend to other areas of the practice. Practice leadership should help create a culture in which everyone in the practice understands the important role financial counselors play in managing the practice’s financial relationship with the patient.

The front office is a common collection point in many practices. As front office staff greet and check in patients, they are often responsible for collecting copays and other patient balances. In our experience working with practices throughout the country, we frequently find front office team members who are unclear about their responsibility to collect patient payments or who are uncomfortable asking patients for money. In some cases, it’s because they have not been properly trained on how to do so, or their responsibilities have not been clearly defined. It is good practice for an FC or the practice manager to emphasize to front office staff how these payments impact the practice’s financial health, how and when to request a payment from a patient, and what to do and say if the patient is unable to pay. Role play and scripting can pay great dividends on this front.

We recently helped a six-physician practice identify several opportunities for enhancing their collection process by helping them implement a new financial counseling program. Prior to the engagement, the practice, which sees about $20 million per year in revenue, was collecting approximately $75,000 from patients per year. Within the first year, after implementing the new process, the practice increased its patient collections to $219,000 per year.

Technology and Financial Care

Understanding the financial impact of a cancer diagnosis on patients even extends to physicians, who play an increasingly important role in the collection process. Today, more than ever before, physicians are being asked to understand how treatment decisions impact out-of-pocket costs to patients. In supporting the culture of your practice, we regularly separate the clinical and financial questions and often remind physicians to refer financial conversations to FCs and patient assistance teams.As with most workflows within an oncology practice today, technology plays an increasingly important role in providing financial care to patients. When practice management, regimen support, and electronic health record systems work seamlessly together, physicians have the information they need to make treatment recommendations that take costs to patients and payers into consideration. These systems can also provide FCs with the information they need to have discussions with patients about how much they’ll have to pay and what options they have for doing so.

Partner with an Expert

Technology also helps FCs and back-office staff monitor patient accounts and identify aging balances in a timely fashion, which can highlight potential issues with a patient’s financial situation. The appropriate systems keep track of financial conversations with patients and collection efforts and help practices meet guidelines for some value-based reimbursement programs. For example, practices participating in the Oncology Care Model, kicking off later this year, will need to have documentation that they’ve had these types of financial discussions with their patients.By putting the right pieces of a financial care program in place, practices can limit their financial exposure and fully support patients during a very difficult time. Even practices that already offer financial care services will be asked to continuously identify opportunities for improvement in today’s rapidly changing healthcare landscape.

Practices can benefit from working with a team of experts that can help develop a multi-faceted strategy that improves revenue cycle management, enhances operations, and supports value-based reimbursement programs. A structured review of a practice can also uncover and address barriers, introduce best practices, and leverage technology and clinical tools to meet an individual practice’s goals.

Gabe Torres is director of Innovative Practice Services for McKesson Specialty Health.

Reference

Magellan Pharmacy Solutions. ICORE Medical pharmacy and oncology trend report. https:// www1.magellanrx.com/media/216381/2012-trend-report.pdf. Published 2012. Accessed April 18, 2016.