March 03, 2009 08:00 ET

The New Reality: Coping With the Growing Shift to Patient Payment

Higher Unemployment, Greater Numbers of Uninsured Mean Healthcare Providers Must Find Better Ways to Avoid Bad Debt and Ensure Adequate Cash Flow

LOUISVILLE, KY--(Marketwire - March 3, 2009) - The statistics speak for themselves: according to January 2009 figures from the Bureau of Labor Statistics, unemployment in the U.S. has jumped nearly 60% in the last 12 months, from 4.9% to 7.6%. 2008 was the worst year for job losses since 1945; underscoring this, continuing jobless claims rose in January to 4.79 million, the most since recordkeeping began in 1967.

The U.S. Census Bureau reported that 46 million Americans, or 18% of the population under the age of 65, were without health insurance in 2007, the latest year for which data is available. With the dramatic rise in unemployment in 2008, and with no respite foreseen through much of 2009, the number of uninsured has undoubtedly risen -- and will continue to do so.

The sudden increase in numbers of uninsured patients means that those who walk through a healthcare provider's front door must assume greater financial responsibility for their treatment. It's essential that providers help their clientele through this difficult period -- not only so patients can avoid the difficult choice between treatment and burdensome debt, but also to ensure sufficient liquidity and cash flow for the practice.

ZirMed®, a nationally recognized leader in delivering revenue cycle management solutions to healthcare providers, has been helping their customers through this challenge. The company recommends that practices employ a suite of Revenue Cycle Management (RCM) and financial services solutions with features that help them increase upfront patient payments, decrease cases of lost or overdue billing, and improve cash flow.

"Today's economy is simply accelerating a major trend that's been developing over the past three to five years," said Jerry Merritt, president and chief executive officer of ZirMed Inc. "It's critical that providers address the situation now, before changing circumstances create serious financial problems."

Patient Collections

One of the most important strategies practices can institute is to guarantee payment before services are rendered, through more flexible patient payment options and upfront verification of any insurance coverage that might be available. To ensure that any available coverage is found, providers should employ an RCM system that verifies coverage automatically, before services are performed. The best automated systems can save up to 75% in labor costs over verifications that are handled by phone.

Providers should also have systems that allow patient payment via cash, personal check, debit and/or credit cards. Systems that support automated installment payment options enable providers to offer patients even greater flexibility in meeting their growing responsibility for medical costs. Handling a greater volume of patient payments can increase the risk of fraud and theft, so it is vital that systems enhance a provider's internal control over the processing of patient financial transactions.

Finally, patient billing should be clear, simple and accurate. Patient billing solutions that automate the process of forwarding statements when patients move, and that integrate patient statements with online bill pay options, offer providers the best opportunity to maximize patient remittance.

A Complete RCM Solution

Other ways exist to help practices cope with patient payment, however. By improving overall cash flow management, as well as the efficiency of claims submitted for insured patients, providers are better equipped to weather a surge in patient-paid services.

Chief among the important steps to take is better claims management. By employing a well-run electronic claims clearinghouse, erroneous and/or lost claims -- two of the most common reasons for poor cash flow -- can be dramatically reduced or eliminated altogether. ZirMed reports that customers often experience reductions in accounts receivable days of up to 50% through use of its clearinghouse services. Electronic Remittance Advice, or ERA, can also automate the costly, labor intensive task of processing and posting payments from paper Explanation of Benefits (EOBs).

Taking advantage of the growing trend toward Business Intelligence (BI) services, ZirMed will soon be offering analytics services that allow providers to compare their receivables performance to their local, regional or national competition and gain the insight necessary to improve business practices.

These practices, combined with steps that facilitate easier patient payment, can make a powerful difference in a provider's viability during difficult economic times. "Our recent adoption of the ZirMed suite has changed the way we approach patient payment. We expect an increase in front desk collections in excess of 30% with our new payment methods," said Geoff Luber, vice president of finance for Soteria Imaging Services, a diagnostic imaging services provider with 19 locations in 9 states.

Free White Paper

ZirMed offers a free white paper that details strategies for improving cash collections and internal financial controls. To obtain a copy, please send an email request to or visit

About ZirMed:

Founded in 1999, ZirMed is a nationally recognized leader in delivering revenue cycle management solutions to healthcare providers. ZirMed enables healthcare providers to leverage the power of technology to cure administrative burdens and increase cash flow. ZirMed solutions include eligibility verification, credit/debit card processing, check processing, claims management, coding compliancy and reimbursement management, electronic remittance advice, patient statements, patient e-commerce solutions, provider credentialing, and lock box services. ZirMed solutions are designed to complement provider workflow and to provide innovative, creative and flexible solutions for healthcare's most pressing administrative challenges. For more information about ZirMed, visit

Contact Information