Patients today, struggling to afford expensive high deductible health plans, rising co-pays and in-network fees sure do miss the glory days of $10 co-pays and well covered, affordable health insurance.
But no one misses those glory days more than physicians.
As high deductible health plans proliferate, physicians now depend on patient payments for approximately 30 percent of their revenue stream. Income that used to be collected via Payers is now collected by way of deductibles, co-pays and self-pay patients. The problem is, collecting revenue from patients isn’t nearly as easy or affordable as collecting from Payers – and practices are paying the price.
Elizabeth Woodcock, principal of consultancy Fredericksburg, Va. based Woodcock & Associates, gave her advice on collecting patient payments in a Fiercepracticemanagement.com article. Woodcock, who estimates the cost of collecting from patients is as much as double the cost of collecting from Payers, insists that practices need to first understand the “payment-personalities.”
According to her, there are three: (source:Fierce Practice Management)
- “Happys”–These patients, for the most part, pay you what you ask for when you ask for it, with little extra effort on your part, provided you are clear about their financial responsibilities and expectations
- “Nudgers”–These patients are likely to pay their medical bills with some additional prodding and incentive
- “Refusers”—These patients have absolutely no intention of paying you, either because they can’t or they won’t
And to get the most bang for your buck, Woodcock recommends concentrating most of your collections efforts on the “Nudgers”.
But what is the most cost effective way to collect money from patients? Should patient billing be outsourced? Or is it just a matter of transition in the culture of practice administration and employing new in-house strategies to collect in a more cost effective way?
For practices looking to collect payments more efficiently, there are definitely strategies to help avoid using a third party billing company, collection agency or other outsourced methods of collecting:
Set Precedent for Payment From Day One
Many physicians are now including a document with new patient disclosure forms that explain the patient’s payment responsibility up front. These forms kindly inform the patient that it is their responsibility to understand their deductibles and co-pays and all fees are due at time of service. Patients are required to sign and date these forms to acknowledge they have been given this information.
As part of these “payment disclosure forms” offices may offer to help patients with any questions they may have about their health plan and payment responsibility. An informed member of the staff can take a few minutes to explain the plan basics and provide them with resources to reach out to insurance companies for more information. Educated patients feel more comfortable with their responsibilities and, as a result, are more willing to pay.
Give Staff The Tools To Accept Payments
Traditionally, many practices were reluctant to accept credit or debit card payments because of credit card fees. This is an outdated, foolish mentality. By not accepting credit card payments, practices are literally turning down money. Equip staff with robust payment systems that accept all forms of credit, debit and FSA/SA/HRA cards. Find a system with the ability to save credit cards on file securely and automate payment plans. This gives staff ultimate flexibility in working with patients to get them paid up in a comfortable manner.
Let Patients Pay Online
70% of consumers pay their bills online. It’s simple, quick and more cost effective for the consumer as well as the payee. There is no reason why healthcare should be different. Technology will now allow your practice to integrate (often for free) a patient portal which allows your patients to log on and pay. This feature alone will drastically improve the likelihood of collecting money from patients.
Write Short Scripts
As menial as this may seem, it sometimes helps front desk staff to consider short scripts or phrases that may help them at the time of collections. The language used to ask a patient for money can often make or break their willingness to pay. For example, “How will you be paying today,” may be more effective than “You owe $35.”
There is nothing new about these strategies, only that they are new to healthcare. Businesses outside the healthcare industry wouldn’t last a month without following some of these principles. As consumer driven healthcare kicks in, practices will need to learn how to manage the cost of collections like any other business in any other industry.