With high deductibles and co-insurance, making sure your practice collects patient balances on time is more important now than ever.
Here are seven steps, or areas, to help you understand and identify opportunities that are available to increase your practice’s patient collection rate and bring in more money.
Understanding Why Patients Don't Pay
Most patients pay their bills on time but for those that delay payment or avoid paying altogether, what are some of the reasons they don't pay? If we learn the "WHY's", we can begin to find solutions to make it easier for the patient.
Reasons for Non-payment
The patient is not sure why they have a balance due.
The patient statement is confusing.
They can't afford to pay.
The patient forgot about the bill and therefore did not pay.
Some patients simply don't want to pay their bill.
Now that we know the possible reasons, this allows us to formulate a plan to help the patients pay their due balances.
Let's take a look at seven stages of the patient collection cycle and see what we can do to make things easier for both the practice and the patients.
Front Desk The patient collection cycle starts the moment the patient schedules an appointment. The front desk can verbally verify the patient's current insurance and home address with the caller. With the updated information from patient, you Electronic Health Records (EHR) and Practice Management Systems should efficiently conduct an eligibility check electronically before the appointment. If there is an eligibility issue, contact the patient prior to the appointment to get it resolved. When the appointment date arrives, and the patient checks in for their visit, make sure to obtain a current copy of their insurance card. Also, have the patient update and verify all their demographic information. Some billing systems can print a form with the patient's demographic and insurance information that the patient can easily review, update and sign. With some systems, the patient may be able to verify the information electronically. Having accurate, up-to-date patient information is critical to getting paid. Not doing this first time simple step properly can lead to a substantial loss of revenue down the line.
Point of Service Collections The best time to collect patient balances is at the time of service when the patient is standing in front of you. Make sure the front desk or check-in staff notifies the patient of any outstanding balances and previous attempts to collect. Asking for patient payment will increase revenue from patient collections and also reduces billing department costs, since they will not have to spend time pursuing the patient for payment and mailing statements. Since patients' health insurance policies have large deductibles and co-insurance nowadays, collecting those amounts upfront is not only a good idea, it's imperative. Calculating the amount of money the patient will owe for the visit is much easier now that the staff can go online and see what the patient will be responsible for and even how much of the annual deductible has been satisfied so far. Insurance company fee schedules are also available online. Now armed with the patients deductible, co-insurance amounts and copays, you can estimate how much the patient's responsibility is for the visit. That amount should be collected at the time of service, which will result in more money promptly and fewer collection costs. Since some procedures can be costly, practices should offer financing options to help the patient with their financial obligations.
Financial Agreement All practices should have a sound financial agreement that outlines all their financial policies. Keep in mind that the practice is essentially extending credit to the patient which makes the financial agreement an essential document. Make sure to talk to an attorney to help you write a financial agreement that is clearly written, easy to understand, and legally binding in your state. Here are a few items that should be included: - When patient payment is due. - What happens if patient payment is not made on time. - If patient payment is not made, a collection fee which is typically 1/3 of the balance due, will be assessed. - If an attorney gets involved, patient would be responsible for court costs and filing fees, - Interest rates on balance due. - Notice that the practice reports delinquent accounts to credit bureaus. - Payment plan policy - Credit card on file policy - No-show fees policy - Form fees
Patient Statements Patient statements can be confusing. Show patients how to read the statement. If a patient can understand their bill, they are more likely to pay quickly. If you send statements out every day, you will be billing patients for any balances due, such as co-insurance and deductibles. Billing the patient within 24 hours of posting the Explanation of Benefits from the patient's insurance company will result in faster payment. Has the patient moved and not informed you of their new address? Using the U.S. Postal Services Address Service Requested program is a great way to obtain the patient's new address. Also, make it easy for the patient to pay online via patient portals or credit card merchant portals.
Collection Letters After sending out the patient statements, the next step is the collection letter. Studies have shown that a soft collection letter works better than a hard letter. Remember the goal is to collect the balance due. We have all been there, money is very tight for a period or unexpected medical bills crop up. The collection letter should convey the message that you understand and that the practice is there to help the patient understand their bill and offer convenient ways to pay. However, do make it sound urgent that the patient needs to contact the office by a specific response date. Using an actual date is better than saying “contact us within 10 days” which is not clear.
Collection Calls Make sure to start the follow up calls the day after the response date on your collection letter. If possible, vary the times of the calls. You may have more success calling patients in the evening than during the day. Of course, nothing says you must wait until an account is delinquent to start making your calls. Starting as soon as the 30 days mark will help you get your money quicker.
Payment Plans Help patients pay by offering them “reasonable” payment plans. Paying $10 a month on a $600 balance is not reasonable but a $50 monthly payment for 12 months may be acceptable. Start by offering the patient to divide the overdue balance into two equal payments over two months. This will show that you want to resolve the balance quickly but will also give you some negotiating room to accept a 3 or 4 month payment plan if appropriate. I suggest not going over 12 months. Make sure you get the patient to sign a formal payment plan agreement that includes the dates all patient payments are due and what happens if the payment is not received as promised. This helps to convey in their mind that you are serious about collecting and expecting payment on time. Set up reminders in your software so if the patient is late with their payment by even one day, you can give them a call. If possible, try to set up a credit card on file to have the payments process automatically on the due date. Unfortunately, despite all your efforts of doing everything possible to help the patient and obtain payment, some patients will just never pay. If the patient has come to the end of collection cycle without payment, your only alternative may be to write off the balance and send the account to a collection agency or attorney.
Better Patient Collections, Better Cash Flow
Following these seven steps will help you get paid faster and more consistently with less effort. Take time today and review your patient collections cycle to find opportunities that I am certain will increase your patient collection within 90 days.
To find out how ONDADOT can boost your patient collection practices, book an appointment with one of our Billing Experts.