Collection Strategies Can Help Physician-Patient Relationship, Protect Bottom Line
By: Carol Bishop, associate director of practice economics and payer relations at the Pennsylvania Medical Society
Collecting money from patients is one of those necessary things that few physicians or their staffs are comfortable doing. But practices must have a good process in place to collect deductibles, co-payments, and co-insurances if they want to continue to offer quality health care.
When communicated clearly and respectfully to patients, these processes may also help avoid negative impacts on the physician-patient relationship and damage to the practice and/or physician’s reputation.
Practices should take a step back and examine their current procedures — from how patients check in, to patient billing and collections.
Clearly Communicating Policies and Procedures with Patients
The first steps in creating this process should include finding a reliable system for checking eligibility, accurately estimating the patient’s financial obligation, and reviewing the estimate with the patients prior to their appointment or when they check in. When a patient knows upfront what their financial obligation may be, they are more likely to pay all or some of what they owe at the time of service.
To ensure accuracy, it is absolutely vital that staff collect and enter demographic and insurance information correctly at time of check in. The best practice is to verify coverage and the applicable cost share amounts (i.e., co-payment, deductible, and co-insurance.)
The Practice’s Bottom Line: Collection Strategies
The bottom line: Health care costs money. With payments from patients for services provided poised to make up a larger and far more critical percentage of providers’ total revenue, bad debt can no longer be viewed as simply a cost of doing business. It now has the potential to damage your practice. For many practices, it’s a change in thinking.
Practices need to ensure that the policies and procedures that are in place are doing everything possible to prevent balances from becoming delinquent, such as:
- Collecting payment (e.g., co-payment, co-insurance, deductible) prior to services being provided
- Increasing the pace of collections to include reducing the number of days between when a bill is sent and when payment is due
There is no better time to collect than when the patient is already at the office. This will help to avoid wasting more time and money for billing patients later. Even if a patient is not able to pay in full, the opportunity for patients to pay a portion of their bill or set up a payment arrangement with automatic withdrawals is one that is becoming more prevalent.
Practices should also:
- Implement a solid financial and billing policy detailing their expectations for charging, billing, and collection of accounts receivable.
- Educate patients, especially new patients, on their financial responsibilities and on their billing policies and procedures. This will encourage them to comply. Some examples are office brochures, welcome letters, and websites. The information should include the insurance companies the practice participates with, policies for collecting co-payments, deductibles, co-insurances, as well as payments for non-covered services. Information should also be included on the practice’s process for filing claims, credit cards that are accepted, the process and timing for sending out patient statements, when payment is due, and the policy for turning balances over to a collection agency.
- Review financial policies annually, especially due to the ever-changing rules of private and public health insurance carriers.
- Ensure that their office staff is fully knowledgeable of the policies and procedures, as well of any changes which may be made to the financial policy.
- Train their front office staff to double-check for past due balances on the patient account and consider reminding the patients of such balance.
- Consider payment plans. The patient may be more inclined to make a payment or pay the balance if this option is available to them.
Find more tools, valuable information, and suggested strategies from the Pennsylvania Medical Society (PAMED) at www.pamedsoc.org/collections.
Hard to collect balances
For those hard to collect balances, practices should stick to their protocols listed in their financial policy and procedure manual, such as phone calls, late payment notices, and the process for placing patients on payment plans. The practices’ physicians should also be fully aware of the financial policies and procedures, because many times physicians want to know who may be sent to a collection agency.
Some practices find it very difficult to pursue patients who owe the practice money or who fail to pay their co-payments, deductibles, co-insurances, or past due balances at time of service. However, it is important to keep in mind that the physician has provided important services to the patient and deserves to be paid for such services. When the patient claims he or she cannot pay a balance due, the practice should do their due diligence to work out a payment arrangement that is comfortable for both parties.
For those patients who simply refuse to pay their balance, this should be handled in accordance to the practice’s financial policy. As stated in the beginning of this article, it must be understood that health care costs money. If the patient is truly in difficult circumstances, the practice’s willingness to work with the patient will show patient loyalty and goodwill.
Collection Protocols for the Medical Practice, PAMED
Patient Liquidity at Time of Service Big New Problem for Providers, Insurers, Managed Care
Higher Copayments and Deductibles Delay Medical Care, A Common Problem for Americans, Managed Care
Changing Your Thinking on Patient Collections, Medical Practice Insider
How to Clearly Communicate Patients’ Financial Obligations, Medical Practice Insider
Paying a Visit to the Doctor: Current Financial Protections for Medicare Patients When Receiving Physician Services, Kaiser Family Foundation