5 Best Practices for Collecting Patient Payments
In order for your medical practice to keep the lights on and maintain the professional staffing level that you and your patients rely on, you must pay close attention to the flow of revenue.
It’s crucial that you obtain every dollar for every visit in a timely fashion. Collecting payments is easier when you have some expert assistance backing you up.
This is a subject that Ben Buchanan, Director of Health Relationship Management at TSYS has explored in depth, most recently in a live (now on-demand) webinar that he hosted about best practices for collecting patient payments. Buchanan is an expert in the subject, and he teaches practices how they can increase their patient revenues. The webinar is designed to help medical organizations like yours to improve their financial standing by following best practices for collecting patient payments.
Learn how to make it easier for patients to pay. View our on-demand webinar hosted by Ben Buchanan, Director of Health Relationship Management at TSYS.
It’s useful to compare the old reimbursement model with the new model:
The Old Reimbursement Model
In the past, healthcare providers typically received reimbursements from private insurers or government programs such as Medicare in a straight fee-for-service model. Patients were largely left out of the process.
A major benefit of this old way of doing things is that providers could count on steady receivables that allowed their business staff to estimate receivables and plan budgets.
Without such numbers, it is much more difficult to expand, such as to hire more specialists or physician assistants. But changes in the healthcare industry are leading to a new model for obtaining reimbursements.
The New Reimbursement Model
Major changes to the reimbursement model call for more patient payment responsibility. Consider that a U.S. government task force that includes several private health insurers has pledged to transition 75% of reimbursements to their providers from fee-for-service to value-based reimbursement by 2020.
The government has a vested interest in curbing healthcare costs. A major thrust is to now emphasize quality of care over quantity. Under a value-based scheme, medical professionals are rewarded for providing better care, with no incentives to order unnecessary tests, for example. The government calculates value-based reimbursements in part by analyzing patients’ opinions regarding the care they receive from the provider. Lower reimbursements to the provider will result in higher payment responsibility for patients.
Costs are mounting for many patients. The percentage of patients enrolled in high-deductible health plans through their employer increased 500% between 2004 and 2014.
A high-deductible health plan has a deductible of more than $1,000 for single coverage and $2,000 for family coverage. The more we can do to deliver higher quality care, the less money will be wasted.
What Impact Does This New Reimbursement Model Have on Your Practice?
The impact of uncollected patient payments is staggering. Physicians currently collect only $15.77 out of every $100 owed once patient accounts are sent to collections. That is no way to run a successful business. Obviously, you would prefer to have payments go more smoothly and not have to spend extra time and resources on collecting slow-paying patients.
Approximately $100 million in patient-owed balances went uncollected in 2012, according to one survey. And collecting patients’ owed balances is one of the top 10 pain points for 96 percent of medical practitioners surveyed. Revenue collection does not have to be so much of a chore when your staff begins making some easy changes.
It’s clear that every healthcare practice needs to reevaluate its strategies for collecting patient payments—and needs to address the issue sooner rather than later.
A Culture Shift: The Key to Success
The core focus of your practice is maintaining your patients’ well being, but a practice is still a business. The profitability of your practice over the next 5 to 10 years may very well depend on how seriously you take this issue.
Medical providers and staffers alike need to be educated about how the collection of unpaid balances contributes to their own financial well being. Making the connection between faster payments and the security of their own jobs should be sufficient motivation to be more vigilant.
Five Best Practices: How to Improve Your Patient Payment Collections
You’ll want to start following some, if not all of these five best practices to start improving revenue in your medical organization.
1. Educate Your Staff About How to Discuss Payments With Patients
Staff should approach patients with courtesy and professionalism. The idea here is to have a conversation and not a confrontation. Patients are often already worried about their medical condition, and having fears about making payment can only add to their stress.
Be kinder and let patients know that your practice understands their financial burdens, and then steer the conversation to discuss your various payment plan options.
2. Improve Communications With Patients
Nearly half of patients in one survey did not understand their medical costs and were more likely to judge the providers negatively because of it. But if you improve communication, you have a better chance of improving patient opinions.
For example, fewer than half of providers use email or text to communicate with their patients, even as patients say they want or expect this availability.
You can address this quite easily by activating the patient portal with your electronic health record or EHR software. A portal makes communication much easier. Patients can send your staff questions by online messaging, safely and securely, without having to waste precious time on hold on the phone. And since the staff can reply with convenience, the lines of communication will be more open.
Patients’ opinions of their providers will become more important in a value-based reimbursement model, so doing everything you can to make them feel respected and at ease will go a long way. Happy patients are more engaged and are more likely to respect your staff in kind with faster payments.
3. Collect Payments While Patient Is Still On Site
You have the patient at your receptionist desk, so why not get the payment collection out of the way right on the spot? Many medical organizations find this to be one of the most important best practices to follow.
You can establish a policy of collecting co-pays when patients check in. You’ll also want to designate a staff member to speak with patients about their balance before they leave the office.
Staff motivation may be an issue. To that end, some practices have found that offering incentives—such as commissions or extra time off—can help motivate staff members to discuss payments while patients are still on the premises. Again, reminding staff that patient payments contribute to their salary can be a huge motivation.
4. Accept Multiple Forms of Payment
Be as expansive as possible when it comes to collecting payment. After all, some 70% of U.S. consumers use at least 3 different methods to pay their bills each month.
Since your patients are used to having multiple ways to pay, your practice should accept them all. If you’ve ever seen a patient’s face grow dismayed after you explain that you cannot accept credit cards and see them rummage around to see if they have enough cash on hand, the value of multiple payment options becomes quite apparent.
5. Take Advantage of Payment Technologies
Many companies routinely send out billing information by email, and you should adopt this best practice too. You can send electronic statements to patients as soon as they leave the office. If no payment arrives by the due date, you have the option to follow up with polite payment reminders to patients via email.
For greater convenience, you’ll also want to set up each patient’s card-on-file for scheduled and flexible automatic credit card and debit card payments. Practices that have a lot of follow-up appointments will find this best practice to be most lucrative. Automatic payments reduce friction, and patients will appreciate that there is less work involved in making their restitution.
Patient Payment Assurance: Collect Sooner, Collect More
Collecting more patient payments with less delay should be your new goal, keeping in mind that your practice is a business and that your patient is the consumer. While you are in the healthcare field to help others, you also have a duty to your staff to collect what is owed, making payroll and keeping the doors open.
In the past, most reimbursements were carried out through a business-to-business relationship between providers and insurers, leaving patients largely out of the loop. But now and in the future, reimbursements are a business-to-consumer relationship that is forged between providers and the patients themselves.
All healthcare practices will need to adopt strategies that reflect this “new normal” reimbursement environment in order to not only stay in business, but to thrive.
Whatever strategies you decide to adopt for payment collection, you are taking positive action to keep your practice in good financial health and ready to provide your patients with the care they deserve.
- Medical practices in the past chiefly obtained reimbursement from private insurers and government programs such as Medicare.
- Now, there is a switch to a new reimbursement model with more patient payment responsibility.
- The U.S. government’s interest in controlling healthcare costs is leading to a new value-based approach emphasizing quality of care over quantity.
- Practices have been leaving too much money on the table, typically collecting just $15.77 out of every $100 owed.
- You can start following medical industry best practices today and improve the flow of revenue in your organization.
There are a lot of moving parts to consider when it comes to getting timelier payments from more of your patients. You may have additional questions or concerns about payment collection that you’d like to address immediately. For more information, click here to watch our full recorded webinar, “Best Practices for Collecting Patient Payments.”
About Stephen O'Connor
As a Director of Digital Marketing at Advanced Data Systems Corporation, Stephen spends his day's planning, writing, & designing resources for the modern healthcare professional. He has a strong affinity for snow crab legs, the ocean, and Rutgers Football.