Cashless transaction and receivables management

Dr Biswendu Bardhan & Dr Aanshu Sharma

One of the main activity of the marketing department of a hospital is to tie-up with different corporates, TPA, CGHS, ministry of defence, different state and central government organisations for provision of credit treatment facility or cashless service at the hospital, which are re-imbursed by the concerned party at a later date.

But on few occasions, it has become a nightmare for the hospital authorities to collect the outstanding bills from different corporates, TPA, CGHS, etc. It is a known fact that in few hospitals the outstanding bill from cashless transaction has crossed crore of rupees. So it has become important for the hospital authorities to focus more on receivables management. .

A study conducted at Bangalore-based Manipal Hospital and New Delhi-based Escorts Heart Institute revealed that some specific issues create confusion and complexity to the whole process of credit billing and thus contribute towards outstanding bills for the hospital. Some of these can be summarised as follows: -

Key issues during admission and treatment of patients

• Pre-authorisation not taken from the concerned corporate / TPA etc.
• Errors in the pre-authorisation letter (eg mistake in the date of authorisation.
• Improper recording of the patient details (employment ID/name/sex/address etc).
• Emergency certificate not made by the casualty medical officer, when patient was admitted in an emergency.
• Patient admitted in emergency and failing/delaying to get the authorisation for the treatment from the concerned employer.
• Delays in receiving the FAX back from the TPA/corporate.
• TPA not convinced with the reasons for enhancement of the bill by the hospital.
• Misplacement of the faxed message.
• Same case has query more than one times.
• Lack of efficient and effective expertise at TPA/insurer/corporate level.

Problems during discharge of patients

• Delay in finance clearance in the hospital.
• Patient discharged without taking his/her relatives signature in the discharge certificate.
• Medical record incompletely filled by the treating doctors.
• Discharge summary not signed by the treating doctor.
• Remarks not mentioned in the discharge summary.
• Final bill more than the approved amount.
• Delay in enhancement approval.

Problems during billing

• Incorrect billing done (specific discounts/rates not followed as per agreement with the corporates/TPA).
• Patient signature not taken on the final bills.
• Improper recording of the details (name, address, bill no., bill date/IPD no., admission date, discharged date, sex etc.]
• Bills not signed by the concerned authority in the hospitals.

Problems in dispatching the bills

• All the relevant documents not attached while dispatching (reports of laboratory, blood bank, imaging, document of approval from the corporates/TPA etc).
• Cover note not prepared with the bills.
• Bill dispatched to the wrong address.
• Bill dispatched to the different office of the same company (some bills need to be dispatched to the office where the employee is working and not the corporate office).
• Delay in the dispatching the bills.
• Bills getting misplaced in the hospital.
• Further clarification regarding treatment is required by the TPA.
• After bill dispatch confirmation regarding the bill receipt not made with the corporates/TPA etc.
• Employee name/ID not attached with the bills, so sometimes if employee relative avail any treatment than it is difficult for the corporates to trace the employee relatives who has availed the treatment and in the process the payment gets delayed.
• Sometimes the concerned employee in some corporate change jobs/ retires and any written correspondence with him goes in vain (courier returns in few cases), which requires constant upgradation of the database in the hospital.

Problems in accounts/record keeping after receiving the bills

• Sometimes the corporates make payment for many bills all at a time without a cover note, and it becomes difficult for the finance department personnel to trace, which all bills are cleared by the corporate/CGHS/TPA etc.
• Wrong entry made in the computer recording (wrong entry of the IPD no, employee name, bill no, wrong entry of the employee office etc), which create lots of confusion.

Problems from Corporate/TPA side

• Delay in giving the authorisation for the treatment from the corporate / TPA side.
• Wrong entry of the employee/customer details (wrong entry of name, age, sex, date, TPA -ID no and members identification etc).
• Misplacement of the bills by the corporates/TPA. Sometimes corporates accept all the bills in one office and they only dispatch to their different office, but in the process they misplace the bills.
• In few cases, it was found that the employee retires/resigns/change jobs and whereabouts details are not available with the past employers, and if any query arise while settling the bills, it is not solved and the payments get delayed.
• Sometimes corporates/TPA delay the payment of the bills for no valid reason. It was found that many TPAs delay payment because of lack of fund with them.
• Incomplete information and education imparted by the TPA/Insurer to the insured.

Problems from the patient (employee /customer) side

• Many patients come with their expired insurance policy and are unaware of that.
• Patients/relatives not paying the insurance premium, which makes the insurance policy void.
• Patients/relatives giving wrong information (wrong address), or patients address changed.
• Patients/relatives not understanding the complexity of the whole process of the cashless service.
• Patients filling wrong details in the pre-authorisation form making delay in the whole process of cashless transaction.
• Patients refusing to pay additional amount above the approved credit limit by the TPA for certain procedures/treatment etc in hospitals.
• Discrepancy in the information supplied by the patient (insured) to the TPA/insurer and the hospital.

Suggestions

Receivable management is an important aspect for a hospital in the current scenario to minimise bad debts. Few recommendations that will help hospitals in better receivable management:

• The hospital needs to send the bills on time. Delay in the bill despatch process will create delay in receiving the amount from the concerned authority.
• While dispatching the bills to the corporates, there is a need to mention the corporate employee name and the employee ID in the bill, so that there is no confusion, if the relatives of the corporate employee avails the treatment.
• Corporates need to be informed that while they send the cheque, they should mention in a letter the bill number for which they are settling the bills
• After dispatching the bills to different corporates/TPA etc, the record of the delivery should be maintained and there is need to make a courtesy call to the corporate in next few days, to ensure that the corporate/TPA have received the bills.
• While making tie-ups with the corporates, the address of the office to which bills should be send (as many corporates have many offices in the same city) should be made clear. n Constant follow-up with the corporates/TPA needs to be done after bill dispatch.
• While dispatching the bills, a letter can be sent mentioning names of all the documents the hospital is providing along with the bill. It can be pre-typed and while dispatching yes/no can be ticked accordingly.
• Hospital should constantly update the names of the contact person in the corporate office/TPA etc.
• Someone within the hospital should be assigned the responsibility to constantly maintain a relationship with the corporates (customer relationship management).
• An option of electronic transfer can be tried out for clearing of the bills (corporates can be asked to use electronic transfer as a payment option and send details of the payment by email/telephone). If possible an additional 0.5 per cent or a fixed amount can be given discount against the bills.
• During misplacement of bills in dispatching from the hospital or from the corporate office, a protocol should be decided whether the corporates would accept the photocopy of the bill. If not, what should be done in that case.
• It is expected that the use of electronic medical record by the hospital can reduce confusion between the hospital and the TPA, corporates, etc to some extent.
• TPA, if involved in insurance, should have a well-defined set of protocols for handling health insurance.

Dr Bardhan is a consultant with Novella HMS and Dr Aanshu Sharma is a marketing executive at Lilavati Hospital.