Reduce Exposure to Financial Risk With a Financial Counseling Program

Gabe Torres
Published: Wednesday, Jun 08, 2016

Gabe Torres

Over the past few years, the healthcare industry has seen a substantial increase in patient out-of-pocket responsibility. Consider that coinsurance out-of-pocket expenses averaged $3,003 in 2012, up from $2,076 in 2011. This change has brought lower premiums but increased patient responsibility.

With this shift of risk from payer to patient also has come a change in the nature of collections at the oncology practice level. In the past, a practice would collect a nominal copay and possibly a deductible, and the remainder would come from the payer and possibly also from offsetting contractual adjustments. In today’s marketplace, patients are now responsible for such high sums that there is a substantially higher risk of failure to pay. Data from the 2012 ICORE Medical Pharmacy and Oncology Trend report estimated that increasing copays and out-of-pocket maximums could have an average annual negative impact of $184,117 per physician.

How do we avoid losses in these changing times? A well-tailored financial counseling program can help a practice minimize exposure to financial risks due to increasing patient responsibility. A well-planned financial counseling program rewards practices in significant ways by decreasing financial risks and reducing anxiety and stress for patients and their families during an already difficult time. While programs may look slightly different from practice to practice, there are basic tenets successful programs have in common.

Determine the practice’s collection philosophy. When it comes to patient collection methods, every practice is different. Even physicians within the same practice can have different philosophies on how collections should be managed. One of the first steps when creating a financial counseling program is to understand these nuances and set basic ground rules. Practices should define hardship requirements and determine what discounts and down payment options will be offered. It is important that these programs do not infringe on any contracts with pharmaceutical companies and payers. The best outcomes happen when sound guidelines are unilaterally applied throughout the practice.

One commonality of successful programs is a dedicated financial counselor (FC) or coordinator who centralizes the various functions of patient collections and reimbursement. FCs have a tough job: they must strike a delicate balance between talking to patients about their treatment costs during a pivotal point of their lives and ensuring the financial viability of the practice. FCs must have a deep understanding of reimbursement issues and know how to coordinate assistance for patients in need. For these reasons, it’s critical to have the right person assigned to this important job. FCs take the lead in calculating patient out-of-pocket costs and obtaining pre-authorizations. Further, he or she will talk with patients about their out-of-pocket responsibilities and other coverage aspects, including their ability to afford prescribed medications, and explain any payment plan options that may be available.

A key to reducing financial risk to the practice is to quickly identify patients who need assistance and may qualify for assistance programs. This identification should be made before treatment has started. Because these programs are in high demand, eligibility requirements are continually changing, and this can make applying for these programs overwhelming for patients and their families. An FC can help patients and their families get through the process with the least possible amount of confusion and stress.

The role of an FC goes beyond the initial financial discussions with patients. Counselors should also proactively monitor patients so that issues that arise can be dealt with promptly. These include changes in orders and regimens, billing or payment matters, expiring authorizations, and re-application needs. Most practice management systems can provide reports that assist with monitoring.

Create a culture for effective collections. Another trait of practices that are successful in supporting patients through the financial burden of a cancer diagnosis is a commitment to understanding that the conversation may extend to other areas of the practice. Practice leadership should help create a culture in which everyone in the practice understands the important role financial counselors play in managing the practice’s financial relationship with the patient.

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