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Reducing Emergency Department Days Sales Outstanding (DSO) in 2021

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In 2020, claim volume changes, as well as an increase in uninsured patients, have caused ripple effects through the emergency medicine community.

Emergency medicine providers are seeing more patients that are self-pay or moving from a private insurance plan to public plans such as Medicaid. This is largely due to job loss caused by the COVID-19 global pandemic. In addition, the trend toward high-deductible insurance plans continues.

Self-pay patients take longer to pay and have a higher risk of write-off. This adds to the already pervasive financial strain on emergency medicine providers. It is also exacerbated by the decrease in patient volume seen in the first half of 2020, due to apprehension by some patients to go to a hospital. Even in the second half of 2020, while emergency patient volumes are beginning to return to pre-pandemic levels, they are not at 100 percent. 

There is little expectation that the first half of 2021 will be significantly better, financially, for emergency medicine providers. Many people are still making conscious decisions to stay home more, and pandemic-related job losses are not expected to recover quickly. This prolonged period of high days sales outstanding (DSO) further reduces the cash flow and low pre-pandemic profitability rates for most emergency medicine providers.

Emergency Medicine DOS Challenges 

One of the most effective solutions for reducing DOS is a fully automated billing and claims management system. Even with a fully automated system, however, there are some hurdles that are especially applicable in emergency medicine. These include:

  • Missing or incorrect patient data. When a patient arrives at the emergency department, they may not have their insurance information or even their identification with them.
  • Potential inability to communicate. Some patients arrive at the emergency department unconscious or otherwise unable to communicate their personal or insurance data. 
  • Lack of knowledge regarding insurance eligibility. Some patients may declare as self-pay, when in fact they may have or be eligible for healthcare insurance programs.
  • State of urgency. With the hustle of emergency departments, staff may omit asking for complete patient and coverage information.

These challenges clearly show the many reasons that patient demographic and insurance information may be missing or incorrect on a claim. Another hurdle in the accuracy of claims is improperly coded procedures. Maximizing clean claims up front is a must when it comes to reducing DOS.

What Can Emergency Medicine Providers Do to Reduce DOS in 2021?

The actions that emergency departments can take to overcome these hurdles and maximize the speed of reimbursement include:

  • Utilizing real-time patient demographics verification capabilities
  • Deploying real-time insurance discovery tools
  • Using technology to monitor deductibles in real time and verify copays
  • Estimating propensity to pay by evaluating any existing medical debt for the patient

Bringing together these capabilities help identify coverage or eligibility, as well as aiding in the estimation of patient responsibility. Using real-time data helps ensure data quality and improved reimbursement rates. By estimating patient responsibility accurately at the point of care, expected balances can be collected up front. Patients who may be eligible for Medicaid can be given the recommendation and information to apply. The system can then periodically check for Medicaid coverage, which can be applied retroactively, as long as timely filing deadlines have not expired. Finally, if a self-pay patient has a low propensity to pay, sending those claims to a collection agency right away is often the best approach.

Prioritizing Investments to Reduce DOS in 2021

ZOLL® Data Systems has found that implementing automated insurance discovery, demographic verification, and deductible monitoring can improve average reimbursement for an emergency department by 29%. If, however, an emergency department finds it impractical to add all of these capabilities together, the first investment must be in insurance discovery. Emergency medicine departments get a clear return on investment (ROI) from finding more healthcare insurance coverage for which a patient is eligible. Whether private or public, the likelihood of reimbursement from a payer far outweighs that of the average self-pay patient. 

With insurance discovery, the earlier the eligibility data is captured, the better for minimizing DOS. It is still worth it, however, to capture that data once the patient leaves the office or has been discharged from the emergency department. Claims can be updated and resubmitted within the timely filing period. The bottom line is that using technology to better understand a patient’s financial health and access to care leads to better clinical outcomes, patient experiences, and financial results. 

This article is a collaborative effort with ZOLL Data Systems.

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