Patient Financial Clearance: Ensuring a Successful Revenue Model in Emergency Medicine

The following is a guest blog post by Jordan Levitt serves as a Managing Partner and Founder for PayorLogic.
Jordan Levitt
In emergency medicine, most providers know this to be true: medical triage and rendering healthcare services is often the easy part. Financial clearance and obtaining payment is the challenge. This is particularly relevant in light of the Emergency Medical Treatment & Labor Act (EMTALA) that ensures public access to emergency department (ED) services regardless of one’s ability to pay.

Even with the influx of patients who now have insurance through Medicaid expansion, EDs are still up against many challenges in terms of collecting payments from urgent care encounters. Emergency patients are frequently transient and difficult to manage. And beyond the traditional self-pay patient population, a growing number of emergency patients are now insured under high deductible health plans (HDHPs). Patients themselves are increasingly responsible for a larger portion of the bill.

The burden is on emergency medicine practice administrators and their billing companies to complete the financial clearance process as early as possible—ideally immediately following medical triage and during the urgent care encounter.  The biggest hurdle is obtaining correct and accurate information to financially clear patients within the emergency setting.

Common Hurdles to Overcome
First, IT systems used during emergency transport and within the ED are commonly fragmented—even within a singular hospital system. Second, emergency encounters must focus first on medical triage and urgent care. Financial clearance is an afterthought. Patient access staff members in the ED often do not have ample time to complete financial clearance before patients are treated—and even released. Third, many organizations experience high turnover in the ED registration area, making it difficult to ensure compliance and consistency.

This article summarizes how one emergency medicine billing company works with its clients to provide financial clearance for emergency encounters—even for patients that present as self-pay.

How it works at ATD Resources, Inc.
As a full-service billing company that serves five emergency departments with a combined 140,000 visits per year, ATD Resources, Inc. knows the financial pressures of increasing patient payment responsibility and non-payment risk all too well. Amy Propp, CPC, CEDC, director of operations at ATD Resources, LLC, sent approximately $1 million to a collections agency each month before revamping her financial clearance process. Furthermore, nearly 50% of ATD’s 180,000 patient statements were returned due to invalid addresses.

To improve revenue capture, ATD focused on obtaining the right information the first time around as close to near-time as possible. This required partnering with a front-end financial clearance solution that integrated with each hospital’s information systems so emergency medicine patient access staff had access to real-time demographics and payment information. A three-step workflow was designed.

Step One:
Verify patients’ social security numbers, addresses, and other demographic information within the emergency department as quickly as possible: upon registration and immediately following clinical triage.

Step Two:
Generate an immediate report of all patients labeled as self-pay/no insurance and use Payor Logic’s financial clearance application to check whether these patients have any billable insurance or other payment sources. For example, in 2014, ATD identified 16% of patients as self-pay for their clients. However, after verification, 35% of these individuals were actually eligible for Medicaid.

Step Three:
For patients with no verifiable or billable coverage, ATD staff members use Federal Poverty Level status information to qualify patients for a discount or charity care—immediately communicating findings back to the emergency medicine group.

Step Four:
Finally, ATD works with Payor Logic to predict likelihood of payment. By calculating a propensity-to-pay score, ATD (on behalf of their clients) focus on patients with the highest likelihood of paying the bill. ATD can identify patients with a history of non-payment, adjust the debt, and quickly forward these accounts to collections.

Thanks to its new financial clearance process, ATD has captured more than $800,000 in revenue over 12 months for its emergency medicine clients. In addition, its returned mail volume was cut by more than 10%.

The Road Ahead
Given the increase in patient financial responsibility, emergency providers and their billing companies must find creative ways to expedite the clearance and collection process.  This critical step is becoming increasingly essential as a new era of self-pay patients are emerging amidst declining pre-acute care reimbursements within emergency services and emergency medicine.

About Jordan Levitt:
Jordan Levitt serves as a Managing Partner and Founder for PayorLogic, a healthcare technology company for self-pay accounts management, insurance verification and financial clearance within emergency services, emergency medicine, laboratory, medical imaging, durable medical, and hospitals. Jordan can be reached at: