Question

The risk of patients not paying their account balances resulting in bad debt expense is a reality today. This risk is greater as employers increase out-of-pocket maximums, deductibles, and co-pays as part of their medical insurance plans. Research and discuss some best practices healthcare organizations are using today to improve their patient liability or balance due collection process.

Answer 1

Because we're in an era of higher copays and deductibles, patient payments continue to grow, becoming a larger percentage of your total payments. Effective patient collections are more critical to the financial health of your practice with every passing day. Here are several tried and true steps for getting more of what you are due from your patients.

1. Copay collections

• Your goal should be to collect 100 percent of copays and deductibles every day in every office.

• Let patients know — via your website, your portal, appointment reminder calls, etc., — of your "No Copay, No Visit" policy, and reschedule all but acutely ill patients who arrive without their copay.

• Track collection rates by office and/or staff member. Ask each staffer who collects copays/deductibles to complete an "If Not, Why Not?" report each day for the monies they do not collect.

• Improve the "Ask." You will find that some employees are instinctively better at collecting patient payments. Have other employees observe their techniques. If you have a small staff, consider having your front-office personnel take a field trip to another office to learn.

2. Know what they owe

• Check insurance eligibility on every patient prior to every visit to: 1) Identify what copay and/or deductible are due; and 2) Ensure the patient's insurance is active.

• Again, let your patients know what payment you will expect at the time of their visit. Eliminate potential patient excuses, such as, "I didn't know the cost of today's appointment will apply to my deductible."

• Many eligibility checking products permit you to do real-time eligibility/benefit status verification at the time of service.

3. Patient statements

• Remove the aging buckets (e.g., 0-30 days, 31-60 days, 61-90 days) from the bottom of your patient statements. Aging buckets are an invitation to patients to wait another 30 days to pay you.

• Patient statements should go out at least weekly.

• Your initial statement should simply state, "DUE NOW."

• Your second statement should state, "PAST DUE."

• The next step should be either a phone call or a final-notice letter giving the patient 15 days to pay before his balance is sent to collections.

4. Payment plans

• Set up payment plans for those patients who don't have the money and indicate that they are willing to pay their bill in installments.

• A payment plan should be documented in writing and signed by the patient. I have been burned too often by verbal agreements for payment plans.

• The payment plan should spell out what will happen if the patient misses a payment; this is critical in my opinion.

• Payment plans should not extend beyond six months.

5. Payment options

• Patients are creatures of their own habits. Make sure you have payment options that make it easy for them to pay you.

• Accept cash, checks, debit cards, and credit cards. I have a colleague who writes a check for everything whereas I never carry checks and rarely carry cash. More payment options mean more time-of-service collections.

• Accept payment through your patient portal.

• Accept payment through your website.

• Explore a "credit card on file" program. Some practices — particularly those with high dollar services or recurring treatments — use a third-party vendor to keep their patients' encrypted credit-card information secure and "draw" payments that are due from the patient's credit card.

Insurance companies and employers purchasing health insurance both accept the premise that higher deductibles and copays will lead patients to be more responsible for their health and their healthcare decisions. This movement, however, puts more pressure on medical practices to collect patient payments in a timely manner, as these payments represent an ever-increasing part of our overall revenue. Only a diligent effort on the front end will ensure our collection percentages remain strong.