Have you been frustrated by the speed of reimbursements?
I recently took a survey of physicians. In that survey, one of the questions I asked was, what is your biggest financial concern?
Time and time again, physician after physician answered one word…. reimbursements.
We all know how reimbursements are under pressure. The government is becoming more and more stingy. Requirements through EMR systems like ICD-10 are stressing us out.
Then, on top of that, keep track of cash flow has been like a cat chasing its tail, a hamster running on a wheel.
It feels so frustrating!
So, I’ve been on a mission to help empower physicians with knowledge, resources, and tools to combat this problem. . I’ve often heard it said that physicians have a Porsche drawer. A drawer worth 70k or 80k or even 100k of bills yet to be paid by the insurance companies or the patients.
Our next guest, Tom Furr, is the founder and CEO of a company trying to speed all of this up.
He’s been quoted at least a dozen publications I could find online- everything from Physicians Practice to Becker’s Hospital CFO to H-I-S Talk.
In this podcast, you will discover:
– Why Tom founded PatientPay and how a late bill inspired him to establish this company
– My story of how my wife and I are slowing down reimbursements and what you can do about it
– How you can generate cash flow more quickly and speed up your reimbursements
I recently took a survey of physicians and in that survey one of the questions that I asked is… What is your biggest financial concern?
Time and time again, physician after physician answered one word: reimbursements.
We all know how reimbursements are under pressure. The government is becoming more and more stingy. Requirements through EMR systems like ICD 10 are stressing us out.
Then on top of that, keeping track of cash flow is being like a cat chasing its tail. Just like a hamster running and running on its wheel. It can feel so frustrating.
I have been on a mission to help empower physicians with knowledge, with the resources and with tools to combat this problem. I have often heard that physicians have a Porsche drawer. A drawer worth $70,000 or $80,000 or even $100,000 of bills yet to be paid by insurance companies or the patients.
Our next guest he is the founder and CEO of a company trying to speed all this stuff up. I think he would say that he would only want to have an empty drawer and a full bank account. Before founding his company, he was the CSO of Mobile Smith for seven years, and to be honest I don’t know what that means but am sure he will tell us what the CSO is.
In 2008, he founded his current company Patient Pay and the focus has been on driving down expenses by eliminating all these labor intensive and error prone expenses.
He even landed and was granted three patents for the innovative processes that permit instant integration with all kinds of management and billing systems. As a matter of fact, he has been quoted in at least a dozen publications that I could find online. Please help me welcome Tom Fur, the CEO of Patient Pay. Welcome Tom.
Tom: Dave thank you for having me. You are too kind bringing those words. I don’t think I have as much as what you`ve said but…
Dave: I am so glad to have you here. Tell us about you and your journey. What were you doing before Patient Pay and what the heck is a CSO?
Tom: So, CSO is Chief Sales Officer and we were working on developing applications to enhance the small business process to make it better for them to do business and we work with companies to help the independent business owners do more commerce online. We work with banks like Bank One and for JP Morgan Chase. So, we’ve been building applications, software or service applications that really helps small businesses with regards to online commerce.
Dave: So, you were in basically a banking field of a sort.
Tom: You got it.
Dave: Interesting. You don’t strike me as someone of a coder. So, when you come up with Patient Pay what inspired you to find this? I can see the transition in how the kinds of activities you were doing before and some skills translating here… but what inspired you to change gears?
Tom: At the last company, we were in the payment business and when a client of our partners tried to purchase something… we help them do that. Credit card processing and debit card processing and all that was done on the back end. I had a friend trying to explain to me healthcare payments and I quite frankly never paid a healthcare bill in my life. My wife always paid it… if there were any at the time.
Dave: Or the insurance company did, right?
Tom: exactly. So prior to the ACA or the Affordable Care Act that was passed, most bills were paid from the insurance company and there was very few bills paid from the patient.
What has transpired over the last 5 or so years since the ACA has been enacted is that more and more people are buying high deductible plans out there. In fact, it just really started.
It`s over a quarter of people out there that have had deductible plans and expected to go well over to 50% potentially to the 70 to 80% range in the next three to five years.
So, what`s happened from a doctor`s perspective is that they are used to collecting dollars from the insurance company and that’s where most of their payments came and if there were any out-of-pocket dollars…. they try and collect it primarily through paper statements.
And if they collected it, great. If they didn’t collect it, it was no big deal because is only 1-2% of the receivables.
And that shift with the ACA has happened really rapidly. According to the CEO of Aetna, at least a third of payments are going to be coming from the patient and as you know if these payments aren’t automated and collected efficiently, it gets to be expensive and slow and we`ve developed some technology to help automate that whole process which today is primarily paper statements.
So, according to the Medical Managers Association it takes 3.3 paper statements before patient will even pay their bill. So physicians have to send out all of these paper which is expensive.
Dave: Is it very expensive?
Tom: That’s correct. That’s very expensive. It`s slow. So you’ve got to wait 90-120 days and you being in the financial world you know that from a cash perspective you that’s not just sustainable and then…
Dave: Just to tell a personal story real quick… Being self-employed as I am, we have a small office here and so everyone has their own insurance plan.
I can tell you from our own personal experience we had a lower deductible plan, but now the premium has literally doubled. So as a consumer, we had to make a decision and look at our family being relatively younger; a 10 year old, a 3 year old and thirty-somethings that we were better on our own health and so we chose to do higher deductible plans.
You know what happens for us… we get the bills in the mail and I tell my wife to delay on these things because there is no penalty for holding out for 90 days. I can personally attest to this that this is something that we do in our household as a consumer because is not like a credit card bill where you get hit with a 15 or 20% interest rate.
Tom: Most patients have been trained like you to wait because the bills are normally wrong and they are confusing and so they just wait until the collection letter comes and then they pay it.
Example that I had last year I have kids- 13 and 11 and my daughter she is the youngest, plays soccer. And she in the late 2014 ended up breaking her ankle playing soccer. We had to go to the emergency room and then in February of 2015 just about a year ago she ended up falling and breaking her wrist and of course I have to go to the emergency room.
Well, in June of last year, we got bills from UNC hospital. Great service when we went there, great doctors, great facilities, but when the bills come from a patient experience is absolutely confusing.
And as I mentioned earlier- I really don’t pay the bills. My wife pays all the bills and finally after getting 3 or 4 of those they started calling and saying you owe us this money and she says I don’t understand this bill: You, ”Mr. Expert”, can you go pay it?
So, I get the bill and of course, I analyze it and there are 4 numbers on it. There is your responsibility, there is a total amount due, there is a due now and there is a pass through. And the pass through didn’t pop up for the date of her wrist and so I went on to Blue Cross to show those our insurance plan and looked up the EOBs, that’s the explanation of benefits.
For example, this is how much we saved you. This is not a bill. There is so much to go and an amount of $195.06 which was one of the four numbers that were on this bill.
Of course, I said ok we must owe that so I am going to go pay it. I wrote my credit card on the bill and put a stamp on it, and then mail it in.
A month later, we get a bill and it shows that I did not pay the $195. Of course, my wife goes nuts stating I asked you to take care of this.
So, I call UNC hospital and figure out why they didn’t get the bill… the payment that I sent them. After an hour on the phone with the help desk (and they`ve got a great help desk), I realize that their systems take those dollars and because we`ve had something done in 2014 they process my payment, but they posted it to this auto balance.
When we got a new paper statement, we get it showing what I really wanted to pay for… wasn’t paid for. This is an expert in the business, living it day in day out, and I had to spend 2 hours on the phone with this lady to figure out why it wasn’t being posted properly,
These are the types of experiences that are happening day in and day out with people that have no idea how healthcare works and that’s the reason doctors are taking so long to get paid because it is confusing. It`s slow to arrive.
It`s a new day that quite frankly is going to be a major shift in the healthcare industry because more and more dollars are coming from the patient. You are going to have to have a good patient experience, have a good build that makes sense and you are going to have to collect those dollars because as you know is no longer 1 or 2%. It`s now a big deal.
It’s now cash flow issues because when 30% of your group or hospital or practice slows down, they become major major financial challenges and that’s where we come into play.
Dave: Let me just take a step back for a second. With the advent of the ACA and the advent of EMRs and ICD 10…. how is that integrating with what you are trying to do? Has it been a hindrance or help? What does that look like from your perspective?
Tom: Those can be called practice advancement systems or hospital information system as the EMR part of it plays in the clinical side of it. So those systems were designed many, many years ago and the government structured ways so that when you collect insurance payment that was a standardized process and you send these electronic claims out.
A real life example would be this: Let`s say you go see a doctor today and the doctor will post the note that I saw this patient and I needed to see Dave and do this because he has a sore throat. Then, that system will automatically send electronic claim off to your payer and the Blue Cross/Blue shield and whoever it is and when that payer gets it- they will sort of adjudicate the claim and about a week or two they will adjudicate it, they will send that back to the doctor’s office electronically.
When it comes back, it posts automatically into the system and then it will say here is how much we allowed for that procedure that you did based on the insurance plan of this patient. Here is how much we are going to pay towards it and here is what’s left over and you need to go and collect.
Today, all of those systems automatically dump that info onto paper statements and then paper statements start to flow out and hospitals send it. I was with one earlier this week; the patient gets five, six, or even seven paper statements before they make calls and send off to the collections agencies.
It`s a very archaic approach because most of the payments weren’t from the patient. The interesting thing is according to US postal service, today, 60% of people pay their bills online which is why the US postal service is having such a tough time at it.
Yet in healthcare, most of the bills have been and continue to be sent by a paper and so what we have done at PatientPay is we have tricked those big hospital systems like Epic.
We trick those systems to treat PatientPay like one of those peer payment which is then automated. It reconciles back into the event— so all of those issues I had with my daughter would have never happened.
By tricking the system, they treat us… our payments, the patient payments like the payer payments. Everything is automated so now you don’t have to send paper statements out. We send stuff out electronically and when you get it across people most of the time in our instance they pay within 14 days of getting that bill.
This is due to several reasons. One; it is electronic like they do everything else. Two; our bills match out to that EOBs I was mentioning. This is not a bill from united healthcare, blue cross blue shield, you know this is how much we saved you, here is how much we paid towards it, here is how much we owe. When you get your bill, it matches up with EOB.
CitiBank did a focus group a number of years ago and 71% of the people said that if my EOB in my insurance plan tells me I owe this and my doctors bill tells me I owe that, I will pay it every time.
Ironically, we are seeing 75% of our people once they log into our bill- pay it within 14 days and we think it`s that ease of use, doing things the way you are doing it anyway, and the comfort level of: my insurance company says I owe it, my doctors saying I owe it, I should go and pay this.
That’s the key difference of issuing what we are doing versus everyone else and that’s why we are getting this patterns issue because of that methodology. Treat patient payments just like insurance payments and the benefit to the doctor is when we collect those payments, and then we fund the doctors` accounts, we then reconcile that payment back into the system just like insurance payments so it`s all automated.
Just imagine- the forms so you don’t have to manually scan these checks to get into proper manually updated systems. So, it took a much better process.
Dave: Well, I love automation. I am all of that and a lot of my systems are built out of automation. With that being said, Tom was just talking about the automated processes of PatientPay which I love. Automation making things automatic with all these computer technologies we have nowadays.
Now Tom, one other thing I have to imagine that’s a difficulty of someone building this software and integrating it with these multiple EMR providers. There has to be some glitches along the way. What does that look like as you’ve developed this product over the last 7 years? What kind of glitches have happened with Patient Pay?
Tom: Healthcare is a very challenging industry because you have a lot of different people involved with regards to payments. You’ve got providers, the doctors.
You`ve got the insurance company involved that says you know this is what we will allow and this is what we will pay. Then, you’ve got the patient involved and he says ok I need to pay something.
The challenges that we`ve had in particular is making sure that…
One; we capture all of that information and it’s in unison so it’s syncing up. That can be very challenging because the doctor can say one thing, the insurance company can say something else. Then, the patient needs to determine what’s right and what’s not when paying that bill. So, we really stumbled into a methodology of treating patient payments just like insurance payments from a functional perspective.
We realized that the only way to do that was not just the work flow of the practice or hospital or a large physician group is to treat these patient payments. We treat patient payments just like we do insurance payments and that took a long time, much longer than what I had anticipated, but those are the complexities of healthcare that is if you can simplify for the provider obviously. The doctor first, the patient second. It turns out to have good results and we are very pleased with the results that we`ve had up to this point with patients again. 75% of our patients pay when they get to our bill. They paid it. That’s unheard of in healthcare.
One of our practices that we are working with is a big national group in all the major metropolitan areas, they gave us a number of their back bills because they were having trouble collecting them. Again, that was just the confusion of it. We actually collected 75% of those bills in a couple of major metropolitan areas that we did this for them in.
Again, we think because they looked at our bill- they went online and looked into the insurance plan and then said yes you owe this. Of course, they paid it. We really feel that like the ability to simplify a bill in the healthcare world that people want to pay the bills. They just want to make sure they are paying for what they owe and by simplifying it for the patient it adds a lot of values for physicians and then able to automate their patient payments just like they do with the insurance payments.
Dave: With this whole process, obviously you guys are a for a profit company, you are not a non-profit company. I think of payment processing companies like PayPal or other credit card processing companies- there is usually a 3% charge or 5% or 2% depending upon the clientele. For you guys, are you charging a monthly fee? Are you involved in the payment processing? How are you guys making money?
Tom: We are just like a PayPal or Square or any of those payment processors. We charge the percentage of the fees, work performance space. If we don’t collect, we don’t get paid.
We collect and we keep a percentage of the transaction and the great thing about our system is that for all the people we work with we can show a cost savings of anywhere from 3 to 4 to 5 top payment we collect by the automations.
By eliminating those paper statements, we`ve now eliminated the hard costs. By eliminating that back end automation you’ve now eliminated the cost of manually having to hard-code stuff. To your point, automation is mission critical when it comes to healthcare because the only way to handle growing volumes of these payments is to make it automated and the only way to make money from the practices is to automate it and keep your cost down. The uniqueness is we only focus on healthcare. And we design the system specifically for healthcare.
Dave: In terms of that percentage, how does that differ from practice to practice? I imagine like most payment processes which for example I used a software called InfusionSoft to automate and they have their own merchant account. I have used PayPal in the past, and the more volume you do the more discount they give you. How does that work on your site?
Tom: Obviously, just like a Square or a PayPal, we have very competitive rates and like I said we consider cost savings to any of the folks that we work with that are much better than what they are doing with regards to our paper statements and traditional healthcare processes so that our pricing is in line with where they are, but more important we can show cost savings that are substantial to the practice.
Dave: No, I understand. What does that look like though? What is that scale? Does the scale change? For example, might a smaller practice pay more than a larger practice?
Tom: It does, but all of our practices we have confidentiality agreements on them and so I am not allowed to say specifically what our pricing is. Obviously, larger hospitals systems that are billing in billions of dollars billable patient payments… you are not going to give a little better rate than a hospital groups that you know is not as biggest now.
Dave: Sure, I think that’s fair. I just want to be clear about how it works. What do you think is the future for in terms of where this service could go? What`s the way that you guys want to improve, how do you want to get better doing what you do?
Tom: You know, one of the things that we are going to be rolling out soon is the ability for a patient to know before they come to the doctor’s office… what’s going to be expected of them from a financial perspective. And then when they arrive at the doctor’s office you know what is owed now.
Again it`s an estimate, but at least it gives them the mindset of I am going in here and this is what am expected to pay and then of course, if there is anything left over after they have left we will then go on electronically.
It`s kind of an end-to-end solution that makes it a much better patient experience and it helps the doctors get paid more. The worst thing about this whole experience with the UNC hospital was that we knew we were going to owe something, but we had no idea.
You know we didn’t know where it`s going to be; $500 or $1,000 or $5,000. In that healthcare today, you kind of get the sticker shock. It`s kind of like going out, buying a car, driving it home, driving it around for a month or two, and then you get to the bill for it and you didn’t expect to have to pay $50 000. You only wanted a $25,000 dollars.
We feel strongly that from a patient engagement perspective to take the experience as you would in any other thing you do today, from here is what you are going to have to expect to pay to now you need to pay something when you are the office and then you know you are going to have to pay the remaining amount once the claims adjudicated by your insurance plan. That’s the future and that`s where we are going to be very soon.
Dave: Something that I have had to get on the last year again is braces. And you know that the way that they work that system which I think the medical community could learn more from is essentially they put me on a monthly payment system. So, they took my credit card right upfront so there is the initial payment where they are going to charge for do a little consultation and then they charge on a monthly basis.
You know exactly when you are going to be paying. Do you see anything like that integrating into medicine with where things are headed today?
Tom: Yes, we have that on our platform today. We give you the ability to have a payment plan because a lot of people can`t afford you know these very expensive bills, but we actually just partnered up with Henry Schein- so we are starting to learn about the dentist space as well. Hopefully, the next time you go in there- you will see the PatientPay payment platform being used because Henry Schein is a big dental platform the largest dental platform out there today.
Dave: interesting. And getting back to physicians what do you guys see the future holding, what does it look like for docs?
Tom: Physicians are going to have to start running their group, their practice as a business. And you know businesses have to get paid and if they don’t get paid then that means you can’t pay your rent, you can’t pay your staff, you can’t pay yourself. And so it’s going to be a new day in the physician world where people have to talk about money, people have to talk about payments. And it’s not that you wouldn’t do that in any other thing you do today but it`s just something new to the healthcare world and we feel like they are also going to need tools like ours that automate the process and eliminate the traditional paper statements that they are used to doing and that’s why we are so excited about the future because the opportunities are just limitless because of the size of the industry.
It`s estimated from a CEO there is going to be a trillion dollar worth of payments coming through from patients by 2020. There is only 5 trillion dollars in total cost spent across US. That’s when you use your card for dinner, you use your card for groceries, and you use your card for this. So, it’s a massive market opportunity.
Dave: Well besides your own company… what are the resources you would recommend to physicians to max out reimbursement whether they are electronic tools or coaching programs or courses or books? What other good resources would you recommend?
Tom: In the reimbursement world, obviously insurance payment are still the vast majority of your payments. So it is imperative that you file claims daily. You get those claims so they are as clean as possible because look the insurance companies want to automatically process payments and pay the docs. They don’t want to have to manually touch it because it costs them a whole bunch of money so when you get clean claims out there and you get to give them frequently you are going to get paid much quicker from the insurance company and obviously from a patient perspective the sooner you get paid from the insurance company the sooner you can get out to your patient to collect. So, it’s really doing what you’ve been doing but doing it more frequently and obviously making sure that there is no errors in these claims that you allow and that’s just mission critical.
Dave: Do you have any good tools that you think are good on this topic of maxing out reimbursement that you will recommend to people just to check out online?
Tom: You know, that’s a good question. There is a whole bunch of resources out there in fact a lot of the hospital companies are even outsourcing their billings to you know outside companies, that’s all they do. But you know there are so many of them I hate these giving you one or two because I probably don’t have them all covered. But there are definitely resources out there that speak to the ability that coded properly and get them processed quickly.
Dave: ok. Great. Well thank you so much for joining us Tom, I really appreciate your time I know you are extremely busy with all these going on. Do you have any closing thoughts that you would want to leave our audience with?
Tom: I just want to say I appreciate talking to you and thank you for inviting me on. I enjoy reading all you stuff and one of your books I read it was very very insightful. But I hope that we will get an opportunity to speak again in future and good luck.
Dave: Thank you and where can people find your company`s website?