Treating broken bones without racking up bad debt

By Joe Cantlupe | October 29, 2019

Patient with a bandaged arm in a sling

Orthopedic surgery is quite literally a pain for the patient who’s having it, but there’s a major downside for surgeons as well: bad debt. Among all medical specialties, orthopedic surgeons are the most likely to be unable to collect payment from either patients or insurers, especially as deductibles skyrocket.

In a 2019 report from Medical Group Management Association, data revealed that at least 30 percent of orthopedic surgery practices were in arrears for more than 120 days. The median bad debt is about $48,000 for orthopedic surgeons, compared to $35,000 for other single surgery practices.

Surprise Bills = Unpaid Bills

The worst kind of medical bills are the ones a patient isn’t anticipating, and these big-ticket orthopedic surgeries and associated treatments often go hand-in-hand with surprise injuries. It’s a perfect storm for bad debt.

“Although I think more people are paying [their bills], the biggest struggle is with traumatic cases where patients weren’t anticipating a bill beforehand,” says Jamie Fulmer, practice manager of Orthopedic Foot & Ankle Institute in Henderson, NV. “A routine case is easier for payment than a broken hip or ankle. And sometimes patients don’t feel an obligation to pay their bills. We fix them and they’re gone — [they’re] not someone we’re seeing for the long-term.”

First Stop: Automation

Orthopedic practices are quickly adapting to address unpaid bills, from retraining their staff to be more on top of the situation to overhauling and automating the process entirely. It’s easy to forget (or ignore) a notice in the mail to send in a check, but giving the patient as many options as possible makes it more likely they’ll pay up. That means offering flexible payment plans, patient portals for 24/7 access to their accounts, and online bill payments, as well as the option to pay by credit card.

It can be uncomfortable for staffers to remind the patient about overdue payments over the phone or in person. Keeping the patient informed automatically via email or text message can make it easier to get paid and keep everyone happy. Plus, if we can pay our phone bills online, why not our medical bills?

Improving Technology Slowly but Surely

A survey this year conducted for American Academy of Orthopaedic Surgeons participants in a coding and reimbursement workshop found that 55 percent of orthopedic practices said they were “getting there” in improving bill collection technology, said Karen Zupko, president of Karen Zupko & Associates, a Chicago-based medical practice management firm. The KZA survey results showed that 71 percent of practices were tapping into electronic fund transfers, and 70 percent were using patient portals. Another 64 percent of the practices reported adding an option for online payments.

Another way offices can improve their chances of payment is to have staffers explain to patients how to make the most of their insurance plans. “Sometimes people don’t understand their health insurance and patient responsibility,” says Zupko.  “Most people enroll in high-deductible plans and don’t realize they may be on the hook for the first $500 or $1,000 of their care, or much more before insurance kicks in.”

Start Thinking About Payment Before Patients Walk in the Door

At many physician offices, a routine part of business begins with estimating patients’ out-of-pocket payments and collecting the money upfront. Beginning the payment process much earlier makes everything go more smoothly, with fewer nasty surprises for patients.

“Successful collections begin before the first visit,” advises Zupko. “Directing patients to register through your portal ahead of the visit means that you can verify their insurance is good and what [their] benefits are,” says Zupko.

In addition to discussing payment beforehand, some specialists are also requiring deposits to schedule surgery. Some practices offer discounts if a percentage of the expected total is paid upfront, according to Ravi Kumrah, director of healthcare practice for AArete, a global healthcare consulting firm. And many well-run practices are offering various credit options for patients experiencing hardship.

Getting the Front Office up to Speed

Of course, one of the most effective solutions is for staffers to ask for payment when the patient is actually at the office for treatment. “Physician offices have migrated from mom-and-pop shops to more sophisticated enterprises. The front office is a picture or window on the practice. Frequently, it’s the patient’s first experience,” says John Cherf, M.D. of the Chicago Institute of Orthopaedics and fellow of the American Academy of Orthopaedic Surgeons.

Peachtree Orthopedics in Atlanta, GA, emphasizes front-office collection by training staff to address the matter in person. It can be a delicate topic, but it’s even quicker and easier than electronic reminders.

“Our self-pay practice has become more emphasis on the front-office collection. It’s known statistically that it’s better to have patients pay when they are in the office rather than by letter, text, or email,” says Saranya Chiaravalloti, director of revenue services for Peachtree.

An assigned group within the staff “learns the art of collecting,” understands the billing statements and builds a rapport with each patient, says Chiaravalloti. “We have a dedicated model – a dedicated account person and billing person at each site. They greet people and make that connection and relationship.”

Counting on Technology

Many orthopedic practices focused on improving bill collection practices are counting on technology to help them meet their goals. There are a variety of measures physician practices are touting, says Kumrah. Patient cost-estimators can be used based on insurance providers that physicians contract with; they’re helpful because they can seamlessly identify bills for individual patients.

Process automation robots can take care of the mindless tasks like verifying insurance eligibility and sending out reminders for upfront payments based on schedule. “Healthcare generally is slower to adopt tools/automation as compared to other industries, so it helps to see what’s worked elsewhere from that process and perspective,” Kumrah says.

Technology Works Better With People — and Vice Versa

“When you have a better-organized system, you are going to have less bad debt,” says Cristy Good, Senior Industry Advisor for Medical Group Management Associate. “You make sure all things are in place: staff training on how to do front-end collections, how to educate patients on their responsibilities, be transparent in your pricing.”

Thwarting bad debt relies on staying on the cutting edge of health technology, but practices can’t discount the skills of people-to-people conversations. With a little automation and ingenuity, orthopedic surgery doesn’t have to be as painful for anyone involved.

Joe Cantlupe is a frequent contributor to athenahealth's Knowledge Hub.

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