Ambulatory medical practices are increasingly reliant upon payments from patients for their revenue. This creates financial risk.
Consider this example: A patient who participates in a high deductible plan visits your practice at the start of the calendar year. All payment for services rendered will come from the patient’s pocket. If you don't collect payment before the patient leaves your office, the likelihood of ever collecting it decreases significantly, especially if the patient never needs to return for another service.
Collecting payment from patients is a different ballgame than collecting from an insurance company. It’s all about communication—connecting with the patient and enabling them to connect with you at the right touchpoints and through the right channels. In this blog, we’ll explore the relationship between good communication and an effective patient payment program for your medical practice.
The trend toward increased reliance on patient pay holds true regardless of practice size or specialty. By 2019, 51% of the workforce was enrolled in a high deductible health plan. Expect this statistic to increase each year.1
One McKinsey & Company study revealed that providers expect to collect only 50 to 70 percent of a patient’s balance after a visit.2 A substantial amount of medical bills go to collections. Based on a JAMA study, collection agencies in the United States held $140 billion in medical debt in 2020. According to collection agencies, these debts are less likely to be paid than other forms of debt.3
Communication begins before the visit
Your communication with the patient begins before they arrive at your office. Take advantage of touchpoints before the visit to remind patients that that they must show their insurance card at the front desk and make required payments at the time of service. Include this message on your patient portal so it's visible when patients self-schedule a visit. Also, include it in appointment reminders sent by text, phone, or email.
Twenty-four to 48 hours in advance of the appointment, verify the patient's eligibility for insurance coverage, benefits, and demographic information If your practice does not accept the patient's insurance coverage, let the patient know. The patient may choose to go to another provider—one who participates in their health plan.
Transparency is best. You must weigh the risk of losing the patient against the of risk of never receiving payment. If your patient wants to keep their appointment, make it clear that they must pay upfront and how much they will owe at the time of service.
Be ready to talk about money
It's time for the visit. Your financial goal is to collect as much as possible at the point of service. The more you can optimize this phase of the patient pay process, the less reliant you will be on the more challenging tasks of billing and collections after the patient has left your office.
By the time the patient walks in the door, it’s critical to know how much they are responsible to pay. Your front desk staff needs to tell the patient what they owe and collect this amount from them. Use an online cost estimation tool integrated with your practice management (PM) system to determine what the patient will be expected to pay at the time of the visit. This estimate is based on their insurance plan. Prepare front desk staff by making sure they have ready access to this information.
An uncomfortable conversation
From a business perspective, communicating with patients about their financial obligation is a necessary part of each visit. However, conversations with patients about money make most healthcare professionals uncomfortable.
Physicians often have no visibility into their patient’s ability to pay or knowledge of whether a patient ever actually pays for services. Some physicians are shocked to learn they provide ongoing care to patients whose accounts are repeatedly turned over to collections. Still physicians almost always continue to see patients regardless of what is owed. At the end of the day, physicians want to practice medicine, not play debt collector.
At times, the conversation about financial obligations with the patient must go beyond a simple request for a copay at the front desk. Such a discussion should always be a conversation, not a confrontation. It should take place in a private place away from the waiting room. It’s helpful to create a cheat sheet with definitions of terms and key points for your staff as well as a script to follow to aid these conversations.
If the size of your practice warrants it, consider providing a financial counselor as a resource to patients. This person should have experience discussing expectations and negotiating payment. If this isn’t an option for your practice, educate and train your front desk staff to develop the necessary skills.
Make it easy on yourself—and your patients
To encourage patients to pay, make it easy and give them options. Keep credit card information on file. Offer a payment plan with defined parameters and expectations. Knowing that you will get payment over a defined time period, say six months, is often better business than letting the patient walk out the door and hoping they’ll pay in full once the statement is sent out.
Also, consider offering patients a third-party financing program. Doing so allows your practice to address cost concerns without taking on the role of a bank or financing company and assuming the risk and expense of billing and collections. Patients may prefer using this payment option instead of their credit card, especially if special financing is made available.4
After the patient leaves your office, the focus turns on sending out patient statements and, if necessary, turning over collections to an outside agency.
Get those statements out the door
Once there is a patient responsibility balance, a statement should go out as soon as possible. Consider sending out statements on a weekly or even a daily cycle if the size of your practice warrants it. Based on this schedule, you can stagger statements to avoid flooding your call center. Make sure that your statements are easy to read. Follow up with patient balance reminders via text, email, and phone.
From an IT perspective, verify that your practice management (PM) system is set up properly so that all patient balances actually make their way onto a statement. In NextGen® Enterprise PM, this means making sure patient statement indicators are turned on.
Keep it easy after the visit
Enable patients to pay online via a patient portal. Include information on how to make payments on patient statements. Include links to pay online in emails and text messages.
Also at this stage, communication channels are key. The best practice is to implement an interactive voice response process to make payment by phone easy and quick. Consumers today are accustomed to convenience—they’re less likely to pay if they have to wait to speak with a staff member.
Understanding the right touchpoints and appropriate channels for patient pay will not only increases revenue; it also creates a better experience for the patient. For more about implementing an effective patient pay strategy, read this free, new e-book from NextGen Healthcare.
1 Sterling Price, “51% of U.S. Workforce Enrolled in High-Deductible Health Plans, Which May Leave Some Underinsured,” ValuePenguin, January 25, 2021. https://www.valuepenguin.com/enrollment-changes-to-high-definition-health-insurance-plans.
2 Jacqueline LaPointe, “Key Ways to Boost Collection of Patient Financial Responsibility,” RevCycle Intelligence, Xtelligent Healthcare Media, August 12, 2016. https://revcycleintelligence.com/features/key-ways-to-boost-collection-of-patient-financial-responsibility.
3 Sarah Kliff and Margot Sanger-Katz, “Americans’ Medical Debts Are Bigger Than Was Known, Totaling $140 Billion,” The New York Times, June 20, 2021. https://www.nytimes.com/2021/07/20/upshot/medical-debt-americans-medicaid.html.4 Rob Morris, “Third-party financing programs can help patients address cost concerns,” Healio Orthopedics, June 2. 2015. https://www.healio.com/news/orthopedics/20150602/thirdparty-financing-programs-can-help-patients-address-cost-concerns.