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How to resolve credit balances and improve patient experience using Epic automation

If your organization uses Epic for its hospital billing revenue cycle but has not explored ways to automatically resolve self-pay credits, you could be missing opportunities to mitigate your financial and legal risk and gain efficiency for your staff. Epic offers two automation tools, self-pay credits redistribution and automatic self-pay refund requests, that transfer credits to other outstanding patient balances and generate refunds if they have none. These configurable features would benefit most organizations. For example, a large Midwestern health system reduced its self-pay credit volume by 70% and saved 950 hours of manual work per month by employing these tools. 

Credits, defined 

Patient credit balances occur when patients pay more than what they owe after insurance, typically due to providers over-collecting prepayments and copayments or from human error during payment posting.  

 Patient credits can place your organization at risk in several ways, including the following:  

  • Misrepresenting your hospital’s financial state. By underestimating outstanding accounts receivable, credits create the illusion that your organization has more cash than it really does.  
  • Putting your organization in legal jeopardy. Because regulations stipulate not only that hospitals must refund overpayments, but also that they must do so within a certain timeframe, excess credits risk regulatory noncompliance and leave your organization vulnerable to audits.  
  • Causing patient frustration. A credits backlog can delay refunds, leaving customers with a negative impression at the end of their experience with your hospital.  
  • Decreasing staff productivity. Struggling to work down existing credits can be time consuming, and instead of collecting cash, your staff must focus on refunding it. 

Pre-project work 

Before turning on the self-pay credits redistribution and automatic self-pay refund requests features, examine your current patient credit balance accounts. Do you have thousands of small balance credits? Are there specific scenarios that take staff extra time to resolve? Understanding your existing credit volume will help you define which credits you are comfortable automating and which, if any, should remain manual. When you have completed this analysis, share it with your Epic team resources. They will use your input to create logic to select which credits to automatically resolve, to prioritize debit balances for resolution—e.g., oldest balance or highest balance accounts first—and to build work queues to review automated refunds prior to posting (optional). The following sections contain more detail about how your organization can approach this project. 

It’s equally important in analysis of existing self-pay credits to decide what limits you will set. For example, your hospital could decide to set a cap on the dollar amount to automatically refund—some choose $1,000. Your organization could decide not to redistribute credits from active accounts receivable to bad debt if it will be obligated to relinquish a percentage to a collection agency. Document any restrictions you want to set around automation and share that with your Epic team to guide their project.  

Next, create a list of any credit resolution scenarios that typically take staff longer to process—5 minutes per account is a potential threshold—and meet with your Epic team to brainstorm ways to streamline them. Does your hospital have thorny credit scenarios that require significant manual review? Are you dealing with a clean-up for a past system configuration issue that led to a credits backlog? Opportunities for improvement will vary by hospital but are worth exploring, because any complex workflows you and your Epic team simplify now will increase the volume of credits you can automate later in the project. If you have complicated scenarios that cannot be simplified, make sure your Epic team knows so they can exclude these types of accounts from the automation. For example, organizations receiving charitable copay assistance payments may want to prevent refunding foundation or grant overpayments to patients.  

Self-pay credits redistribution  

With the self-pay credits redistribution feature, Epic can search for other outstanding balances for patients with credits. If it finds any, Epic can automatically transfer those credits to the other accounts.  

When implementing this feature, your organization can set guidelines around the types of accounts it’s comfortable automating. Do you only want to refund small balance credits until you’ve seen how the automation works in production? Let your Epic team know, so they can build rules to restrict automation to the dollar threshold you’ve set.  

When patients have multiple outstanding balances, your hospital can drive how Epic prioritizes which ones should receive the credit distribution. Some organizations have policies stating that payments should be transferred to the oldest balances first, while some choose the highest balances. Let your Epic team know how your organization wants to prioritize outstanding balances so they can configure Epic to resolve accounts in the right order.  

If your hospital is combines facility and physician patient billing functions (“single billing office” in Epic terms), you can work with your Epic resource to control whether credits are shared from hospital to professional billing. If you do share across billing systems, you can decide how Epic chooses outstanding accounts for resolution—e.g., hospital balances first, physician balances first, or the oldest or highest-dollar account in either billing system. 

Automatic Self-Pay Refund Requests 

Epic’s automatic self-pay refund requests feature generates refunds when patients don’t have any other outstanding balances. As with self-pay credits redistribution, your hospital can work with its Epic resource to automate only the scenarios you’re comfortable completing without manual review, such as only refunding credits under a specific dollar threshold, or allowing refunds on personal/family accounts while preventing them on corporate accounts. You can define whether automatic refunds require approval before posting, and if so, how to structure approval tiers. Your organization can also decide how refunds are allocated, e.g., back to the original form of payment or all via check.  

Monitoring success 

After your organization goes live with self-pay credits redistribution and automatic self-pay refund requests, be sure to monitor your patient credit balances to gauge the success of your project. Most hospitals using Epic have a hospital billing overview dashboard (Epic calls this HB Overview) containing an AR summary with a credit balance – self pay metric. When you drill down into this metric, you will find trending information to show how your patient credit volume has changed since you turned on automation. To track automated refunds over time, work with your reporting team or use Epic’s self-service reporting tools. Plan to thoroughly review patient credit metrics about a month after turning on these features. If your organization trialed automation with conservative limits, consider whether you’re ready to adjust any of the restrictions you set—e.g., increase your dollar threshold—to expand your automation volume. Work with your Epic team to implement any changes you are ready to make.  

Automating patient credit resolution where possible can streamline processes for your hospital, staff, and patients. When your credits are under control, your organization can be confident that your AR is accurate, and you’ve mitigated your audit risk. When your staff are released from working high-volume, routine credits, they can focus on those complex scenarios that require their expertise and in-depth attention. And when patients receive accurate statements and timely refunds, they can avoid the headache of trying to get their money back and end their experience with a positive impression of your hospital.  

Jessica Ginn
Epic Optimization Specialist
Ensemble Health Partners

These materials are for general informational purposes only. These materials do not, and are not intended to, constitute legal or compliance advice, and you should not act or refrain from acting based on any information provided in these materials. Please consult with your own legal counsel or compliance professional regards specific legal or compliance questions you have.

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