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Tuesday, July 30, 2013

How Obamacare will impact your hospital's revenue

Fin Health 1
Changes to healthcare restrict hopitals from credit reporting
By Ashley Sutphin Watkins

While most of the country is struggling to come to terms with exactly what the Affordable Care Act will mean, two groups that seem to be the most concerned with making sense of how they'll be impacted are hospitals and Federally Qualified Healthcare Centers (FQHC).

Alternative views on Obamacare's impact

Under Obamacare, some analysts anticipate overall revenue will increase, because theoretically more patients will have insurance and therefore seek medical care. The alternative to this belief is that hospital and FQHC revenue will actually see a decline, due to a reduction in rates the government pays for Medicare, and the potential that most of the uninsured will pay the nominal penalty fees, rather than obtaining insurance.

Big changes for billing and collection

Healthcare law regulates how hospitals issue, collect and report bills
Hopitals must fairly evaluate patients' financial capacity
In addition, new changes are being enacted particularly targeted at hospitals regarding billing and collection practices. One change prohibits hospitals from engaging in extraordinary collection practices. This means hospitals can't report patients to credit reporting agencies, nor can they sell the debt of patients that have opted to utilize financial assistance plans. 

Hospitals are also required to make reasonable attempts to determine whether or not a patient qualifies for financial assistance before engaging in potentially extraordinary collection practices. This means notifying patients about the availability of financial assistance plans and providing assistance during the application process.

Along with these changes, it's anticipated that patient accounts receivable could rise nearly 30%, while the insurance account receivable totals will likely undergo a substantial reduction under Obamacare. Hospitals that don't find realistic solutions to the rise in patient A/R will have to face the reality that it's not possible to simply maintain adequate revenue through co-pays and insurance reimbursements alone. Whereas in the past patient balances were written-off, under Obamacare hospitals are going to be forced to reevaluate the way billing and collections are handled.

Leading up to the implementation of Obamacare, most hospitals are losing, on average 15% of their revenue because of issues with self-pay billing, and it's expected that this percentage will rise with the start of Obamacare.

The value of third-party billing services

Hospitals are able to increase revenue via efficient third-party billingFor many hospitals looking to increase their revenue in the face of significant changes, it is becoming more evident that third-party billing solutions will be required. Most hospitals are already understaffed, and facing the possibility of lay-offs, meaning they typically don't have the manpower to complete not only standardized collection policies, but also help patients understand the complicated insurance and billing scenario.

Obamacare requires that patients are fully informed about their payment and billing options, and a third party self-pay service like Financial Health can keep your hospital compliant, while simultaneously increasing revenue and cash flow.

By using a third party medical billing service like Financial Health, hospitals can ensure that they're closing the gap in revenue that occurs as the result in the rising percentage of patient A/R, and the decline in insurance A/R. This happens through the implementation of relationship building with patients, which hospitals ordinarily don't have the time or resources to develop.

Third party billing services like Financial Health carefully explain the details of the billing process to patients to help them create an individualized solution that is more likely to mean the hospital will see a much larger percentage of the patient's financial responsibility.

As Obamacare continues to mean more changes for healthcare providers, tools and services like those provided by Financial Health can keep organizations thriving, growing and providing the best possible services to their patients.

About the author: Ashley Sutphin Watkins is a professional writer and journalist, who specializes in marketing and public relations.

* Image licenses: 1. Royalty and attribution free 2. sqback; RGBStock.com royalty free 3. Morguefile; royalty and attribution free