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HRCM vs PRCM Points of Patient Billing

Updated: Sep 29, 2023

While the back-end cycles of Revenue Cycle Management (RCM) are similar in both service lines, there is a striking difference in touches for collecting patient portion between hospital/facility vs Professional Fee (ProFee) billing, especially in scheduled vs unscheduled care. To help walk us though these differences, we will look at two examples. To allow for ease of discussions, in both examples, we will assume the patient is insured.

  1. Facility Example: Patient with a scheduled knee surgery

  2. ProFee Example: Patient who arrived in the Emergency Department (ED)

Example 1:

The patient has elective surgery, they have probably found the surgeon they want, the time of year, evaluated the net-work status for claims processing, and determine a rough estimate of their personal cost sharing.

The facility has an idea of all this also. Why? because the service is scheduled, so they can start checking benefits and determine the patient's estimated patient financial liability.

  • One: Pre-Registration (Pre-Reg). The first instance the facility can attempt to collect the patient responsibility is in Pre-registration services. This is the time prior to your service date where demographics and insurance are taken and validated.

  • Two: Time of Service (TOS). When you arrive for your surgery, this is the second time the facility can collect your patient responsibility. Depending on the type of care being rendered for an elective/scheduled surgery, the facility may not allow you to proceed with surgery without first paying your portion.

Between 2 and 3, there is often a large gap of time while the previous "estimated" patient financial liability is now processed with insurance, and a final patient responsibility is determined.

  • Three: Patient Early Out Collections (PT EO Coll.). This is the first set of patient collection efforts that occur on patient responsibility after a patient account has been processed. Depending on the amount of the bill, you may get a few calls, texts, or emails to pay your patient portion as indicated by your insurance company.

After this point, Patient responsibility is sent to a Bad Debt Collection Agency.

  • Four: Bad Debt Pre-Collections (BD Pre-Coll.). Collection agencies have learned that it is easier to collect from patients when there is a pre-collection center before true bad debt collections. These are more soft collections, as the agency tries to work with the patient to set up payment arrangements.

  • Five: Bad Debt Collections (BD Coll.). The main difference at this last stage is the wording on the statements, and if the agency is authorized to hit patient credit.

Example 2:

Patient arrives at the emergency room. They receive their care and are now stabilized and about to be discharged. While the facility representative may have come in at TOS to try an get patient insurance and create an estimate, on the ProFee side, for unscheduled care, an estimate cannot be provided. This is because the cost is based on the actual services rendered; the level of provider care documented. This documentation is not fully completed until the patient has left the emergency room. This means, while on the facility side we get Pre-Reg and TOS to attempt to collect patient responsibility, ProFee starts at:

  • One: Patient Early Out Collections (PT EO Coll.).

  • Two: Bad Debt Pre-Collections (BD Pre-Coll.).

  • Three: Bad Debt Collections (BD Coll.).

5 vs 3 opportunities within the Revenue Cycle. That is a noticeable difference; however, facility fees are generally higher than unscheduled ProFee charges. some other things to consider are why would we send it to a collection agency so soon, or at all. The answer is aging and reserves. All uncollected money has to be reserved for, it is balance sheet basics. At some point you have to get it off the books. Maybe you collect some later, maybe not, but you cannot carry it forever as if you are going to get it all one day.

There is the statement I have heard all through my earlier years in RCM, and now it is part of my communication. It goes something like this...While the patient is at the facility, your ability to collect their portion is 90%. The moment the patient leaves that facility, your ability to collect their portion drops to 10%, and once at a bad debt collection agency, it drops to around 1%.

Now this is a bit extreme if we factor in scheduled and unscheduled with insured and uninsured patient populations, so maybe the percentages are more like 70% between Pre-Reg and TOS, 30% for early out, and 5% as a bad debt blend.

The take away is that the moment the patient leaves the facility, we have less of a chance to collect patient responsibility. This is highlighted for the ProFee space, which also does not have those front-end RCM patient touches.

Random Gut Check: If your bad debt agency is doing >10% of patient collections in the on placed ProFee inventory. Then either they are awesome, or your primary RCM vendor is doing a poor job in Early Out Collections. This is something to monitor since you traditionally pay a higher cost on % of collections in the bad debt space since they are harder to collect on.

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