Collection Policy Part 6: Capturing Patient-Pay Balances

Many patients feel healthcare is too expensive. Combine that with the number of high deductible plans on the rise, collecting payments from patients can be challenging. A survey by West, found that nearly three in five Americans delay paying their medical bills. And as each of you know, the longer a bill goes unpaid your chances of collecting the balance deceases. As a result, a certain percentage of patients who you work with will not pay their bill. Many of you deal with this scenario all too frequently! You know the importance of capturing your patient-pay balances.

Small changes in your intake process can produce big results.

Many providers have figured out a way to have the intake team pre-qualify patients for insurance benefits. But top organizations take the next step by explaining deductibles and copays to the patients. If your intake team is not discussing how the remaining balance is going to be paid, you are not alone. The West survey also discovered that only 23 percent of providers make it a habit to always discuss each patient’s ability to pay prior to delivering the product or service.

Your financial policy should outline the payment options you are going to offer the patient. If you have a financial handout for your patients to review, take the time to break the information into small sections. Have the patient initial their understanding of each section. Addressing a patient’s ability and willingness to pay for services upfront can go far toward improving your bottom line. You can track the policy changes by monitoring the percent of cash their intake staff collects at the time of service. Most high-performing providers expect a 100% payment plan in place before delivering equipment or supplies.

Recurring Charges

You’ve collected your money at the time of service, so your collection problems should be solved. Right? Unfortunately, that may not be the end of the road. Recurring rentals or resupply products can create detours on the road to collections. Allegiance Group recommends that you establish a credit card on file program (CCOF) so you can start capturing your patient-pay balances. By saving bank information or a credit card number, you can process recurring patient charges as they occur. Patients will usually authorize charges up to a certain dollar amount. Two hundred dollars is a typical limit. You can include the authorization in the patient’s file, or you can use a payment portal to securely store the information for future use.

Even with a CCOF there could be speed bumps–the card expires, the account is closed or the charge is declined. Now you must contact the patient to get new payment instructions. In the meantime, these uncollected patient balances can wreak havoc in both your bank account and your software system which is double trouble. Create a follow-up plan. Outline how and when you will contact the patient in your collection policy. See our article called Five essential questions for your Collection Policy for suggestions on other must-haves for your collections policy.

Payment plans

If a patient can’t pay their balance if full, your credit policy should outline when you will extend credit. The policy should answer the following questions:

• Will we offer payment arrangements?
• Will you use a credit scoring model or an approval process?
• What is the maximum amount you will extend to a patient?
• What is the minimum percentage you will accept at the time of setup? How much is the minimum payment each month?
• How will you treat a new charge? Will you add it to the end of the plan or will you recalculate a new minimum payment?
• Will you offer a credit card option?

If your company decides not to extend the patient credit, you may refuse service. In this case, do you may want to offer suggestions as to where the patient can turn for help? Is there a foundation or nonprofit organization that can help them or an agency that can point them in the right direction?

Once you’ve decided on which payment options you’ll offer, don’t be afraid to share them with your patients. Make certain the options are highlighted on your website, statements and brochures.

Additional Collection Tips:

Here are a few tips that will accelerate capturing your patient-pay balances:

• Get on the phone ASAP. You know your patients best. If an invoice goes past due, you should make a reminder phone call within a week. Have a basic script ready (Insert call center script) for the person making the calls. After checking to see if there are any questions about the charges, the CSR should be prepared to input payment details right over the phone.
• Offer a payment portal. A portal provides your patient the ability to make a payment when it is convenient for them. When you make it easy for your patients to pay, it will increase your accounts receivable!
• Send reminder notices. Make reminder calls. If an account goes past due, reminder notices and phone calls will keep the patient aware of the balance they owe. Your collection efforts may include stronger language as the account ages. As a last resort, let them know you may report the balance to a credit bureau or turn them over to collections if you don’t hear from them by a set date.
• Have clear rules about discounts and settlements. Choose a staff member (or two) who are responsible to approve settlements is the easiest way to come to an agreement directly with your patients. These individuals should be team leaders or perhaps part of your billing team. Your collection policy should outline when balances can be discount or when a settlement can be made. Collecting something is better than nothing. Resist the urge to empower your intake team with discounting approval. Your intake team should be focused on collecting the insurance information and determining how the patient will pay their balance, not discounting your services before they are rendered.

What if the patient does not respond?

It’s inevitable that this situation will come up. You only have to look at the percent of patient AR you are writing off every year. Is it five percent, ten, fifteen? Your collection policy will dictate how you want your team to handle patients who do not pay. If you have exhausted every possibility in attempting to collect overdue funds, here are a few tactics you can consider:

• Select a day and send the account to a Collections Partner. And stick to It. Our experience is that many providers spend too much time evaluating individual patient accounts when deciding whether to write the balance off and/or involve a third party. Depending on your products and service, it could be day 90, day 120 or somewhere in between. At some point, you must write the account off. Then you can choose to have a collections partner work the account.
• Can you pick up the equipment? Is that something you are willing to do? If the patient won’t let you pick it up, you can use the replevin process to have your asset returned.
• Is the balance large enough to consider litigation? Your collection policy should outline the litigation guidelines. Litigation costs money, so what is the minimum balance for going to court? What process will you use to determine if the patient have enough assets to pay any resulting judgment?

Remember, your patients often understand that co-insurance responsibilities will generally exist. By offering convenient payment methods, your patients are more likely to pay. But, if they don’t, having a clear and unwavering process to handle patients who can’t pay after the delivery is critical to improving your collections.
If you need help trying to balance providing excellent care and protecting your bottom line, COLLECTPlus can help. You can secure payment information up front and engage in an accelerated billing and collection process. Take advantage of the experience COLLECTPlus has in capturing Patient-Pay balances faster and reducing your collection costs.