Financial Counseling Helps Your Patients and Your Practice

Does the care your practice provides stop at the eyes? It shouldn’t. Caring for your patients’ financial well-being is just as important. Their solvency is directly tied to your practice’s financial health, and if your patients are struggling, your practice will soon be struggling. Why?

• Patients who are unable to pay their medical bills interrupt your cash flow.
• Paying for third-party collections is expensive.
• Patients who don’t adhere to their treatment or medications due to cost can hurt your quality outcomes if you’re participating in MIPS or part of an ACO.

It’s inevitable. You’ll see patients who don’t have insurance, are underinsured, and those who have HDHPs. Other patients may simply be of limited financial means. That means they’re shouldering a greater—and sometimes unaffordable—cost burden for medical care than ever before. Have you equipped your revenue cycle to handle the pressure?

Probably not. And chances are, your patients aren’t, either, according to Dan Sherman, MA, LPC, founder and president of the NaVectis Group, which specializes in clinical financial navigation, and who spoke at the ACCC meeting in 2017. That puts their treatment, their mental health, and your facility’s financial health in jeopardy, he notes. He calls this issue “financial toxicity,” and the tipping point is lower than you think: In a widely publicized 2015 survey, the Federal Reserve found that fewer than half of Americans would be able to cover a $400 emergency expense without selling something or borrowing money.

Why You Should Care About Medicare

You already know that private payers continue to shift more costs to patients. But you might also be thinking, “Well, most of my patients have Medicare so I don’t need to worry about it.” Stop right there.

Medicare premiums increase pretty consistently, as do the extra costs of supplemental policies and cost-sharing requirements. In addition, many Medicare beneficiaries are of limited means, according to a 2017 Kaiser Family Foundation data analysis:

• 50% of Medicare recipients have an annual income of below $26,200.
• 50% also have savings below $74,450.
• 36% are functionally impaired, with at least one limitation on their ADL.
• 34% are cognitively/mentally impaired.
• 30% have five or more chronic conditions.

What does this mean? In addition to suffering from expensive-to-treat conditions like AMD, DME, or glaucoma, senior citizens are prone to falls that could result in ocular injuries that require a hospital stay. Any one of these occurrences could mean thousands of dollars in out-of-pocket costs over the treatment period. And don’t forget: eyesight is only one issue among many for Medicare beneficiaries to manage—and pay for.

The Cost is High—for Providers and Patients

Patient finances are important, but they aren’t everything. Vision-saving services are expensive for you to provide, too. Once you purchase drugs or perform a procedure, you’re on the hook for reimbursment. Adding to your cost is additional staff time to maintain and monitor inventory, conduct prior authorizations, and handle billing issues.

 All of this means that your margins on things like intravitreal injections are very small, and you must be able to consistently collect every dollar you’re owed, by payers and patients. But while it’s relatively easy to go head-to-head with a payer—many physicians and staff view payers as adversaries—it’s not advisable to act the same way with a patient. After all, you do want them to come back to your practice, right?

How a Patient Financial Counselor Can Help

Practices that sidestep frank financial conversations unintentionally sabotage their patients’ future care, and bad debt write-offs hurt your bottom line. A dedicated, highly trained financial counselor can help safeguard a patient’s financial and physical well-being, says Sherman. It’s also a chance to differentiate yourself from your competition and to show your billing department’s softer side. How? A patient financial counselor …

… knows the clinical details.

Financial counseling might be administrative in nature, but clinical knowledge is a must. Good financial navigation involves “combining the clinical needs of the patient with the patient’s financial circumstances,” says Sherman. For example, this person must know how to respond  when a patient asks something like “why can’t I have Avastin? It’s cheaper.”

A financial counselor will also gather information from a patient’s physician, like the specific treatment and the length of treatment, Sherman notes. For example, if the treatment is ongoing, what will happen if the patient changes jobs? “You can’t wait till they get on COBRA then have problems because they can’t afford it,” Sherman says.

Remember: not everyone retires at age 65. More and more folks are working longer to make ends meet, to supplement their savings, and even just because they enjoy their job.

… helps patients understand insurance coverage.

 Patients want specific information delivered in simple terms. ‘What’s my coverage?’ ‘How much does this cost?’ ‘How much will I owe?’ ‘I can’t afford that. What now?’ are common patient questions that your practice staff must address. But most staff are ill-equipped to do that, according to Sherman.

The standard reply when a patient is confused is “call your insurance company” and that is not right, he laments. In our culture this non-response is common, but it shouldn’t be. If you met an ophthalmologist and said “Hey, my mom was just diagnosed with AMD, what should I do?” the physician would never say “I don’t know, why don’t you call the National Eye Institute.” A good financial counselor knows the details of how insurance works, and is able to read, analyze, and explain (in layman’s terms) a patient’s insurance policy.

… help patients optimize their insurance coverage.

Sometimes financial counselors too hastily direct patients to assistance or charity options without exploring other solutions first. Your should optimize the patient’s insurance coverage before you direct them to external assistance, Sherman emphasizes, because it’s quite possible they could get better coverage with a different plan or combination. “Yes, the patient could qualify for free drugs but why do that if you can optimize their insurance first and get their out of pocket way down?” he says. If they still can’t afford to meet their financial obligations, then go after external options.

If you’re worried that you’ll be liable because you’ve “recommended” insurance programs to patients—don’t be. You’re not forcing them to sign up for a plan or even encouraging it, Sherman says. You’re simply educating the patient and walking them through all of the options. What they ultimately decide is their choice.

Your Rx for High Rx Out-of-Pocket: Make sure patients understand how to plan strategically for the drug coverage that their plan offers, Sherman suggests. For instance, a Medicare patient on multiple medications would fill the most expensive medication first in order to activate catastrophic coverage more quickly, meaning the rest of the medications will have lower or no out-of-pocket.

 … helps patients navigate assistance programs.

You should regard charity as a last resort—something your patients can turn to when they’ve explored and exhausted all the other options. Patient assistance programs are band-aids, Sherman says: they help, but they don’t address financial toxicity at its roots. “If you can optimize their insurance, they may not even need those [programs],” he explains. That way, you can save philanthropic resources for cases where patients desparately need them. A financial counselor will help patients determine their eligibility for various programs, and may even help them complete the applications. Some of those applications can be several pages long, and can be a daunting task for a patient who hasn’t been through that process before.

Financial Counseling Competence

It is not unusual for a patient to be more anxious about the cost of their treatment than their diagnosis. “Our patients are experiencing financial trauma because of this,” says Sherman. Unfortunately, many folks in financial counseling positions are ill-equipped to effectively help patients avoid that trauma. “These folks are put in situations where there are extremely complicated scenarios that have psychological effects, [and] complex health issues. It is not fair to put them in that position without proper training to address those issues more effectively,” Sherman says.

Most financial counselors have little formal training. They are trained within their own system at their workplace, and they adapt on the spot and learn as they go, according to Sherman. Most positions only require a high school diploma. Legally, you could go out on the street and hire the first person you see and that is fine—but it shouldn’t be, he adds. “We don’t allow that for nurses or anyone else who is treating a patient.”

Insurance and patient assistance programs are an alphabet soup. Besides the familiar HMO, PPO, and COBRA, there’s MSP, QMB, SLMB, LIS, MPAD, Medigap A, B,C, D, F….and so on. In addition to understanding the psychology of vision loss, a competent financial counselor needs “expert knowledge of these programs in order to apply them to the appropriate patient at the appropriate time,” says Sherman.

When hiring for this position, consider someone multilingual or have translation assistance available as needed.

Once you’ve added a financial counselor to your group, you need to do what you do for every other position: evaluate their job performance based on measurable, observable metrics. But this is where it gets tricky. “From my perspective there is not one specific metric for financial counselors,” says Sherman. “There are far too many variables that factor into the equation,” he adds.

Start by calculating how much that person could save you in bad debt write-offs. “They are worth their rate in gold,” says MariaRita Genovese, PCP, PCS, a revenue cycle expert who spoke at the AAPC conference in 2016. Next, consider the value of time.There are so many variables with insurance coverage and assistance programs. Every drug company has a free or low-cost program. Someone who organizes all of this can prevent patients from signing up for programs that won’t end up covering the treatments they need. “They will pay their salary over and over again,” she adds.

And don’t forget patient satisfaction and even the job satisfaction of your other staff members, Sherman emphasizes. “Often the work of dealing with financial distress falls on these individuals and they have had no training in how to effectively deal with these complicated problems” he says. A financial counselor who is doing his or her job will relieve a great deal of that burden.

Straight Talk on Screening

Financial distress screenings are “not a bad thing, but they identify the problem too late,” according to Sherman. He prefers that a financial counselor visit with a patient before the patient even knows that he or she is in financial distress. “Start immediately,” he says. “There are patients where we know that financial toxicity is coming their way.” If you wait till the bills start coming, and just hand them a charity application, the patient may already be thinking about stopping treatment “We are not ‘getting it’ if we do it that way,” Sherman emphasizes. Look at screenings as one tool in your toolbox, but try a more proactive approach.