By Elizabeth W. Woodcock
MBA, FACMPE, CPC
Collecting patient due balances (including self-pay, high deductibles and health savings accounts) is in the current top 10 list of priorities for practice administrators, according to the Medical Group Management Association*. Assigning that level of priority to just one of the many issues that you, as an administrator, must manage may seem out of the ballpark, but your practice’s bottom line is dependent upon it.
Insurance products in the commercial and government sectors are being sold with high deductibles, often exceeding $5,000, which was unheard of just a few short years ago. Business rating firm Moody’s states, "Today's high deductibles are tomorrow's bad debt." *
As a practice management consultant for more than 20 years, I couldn’t agree more. Improving collections performance without adding unnecessary practice expense is a question I hear frequently from the physicians, managers and administrators. The market has changed, and it’s time to reengineer our internal processes to align with today’s reimbursement landscape.
Just hiring more staff in the business office is not sufficient; it’s time to take action that improves your practice’s collection function from top to bottom.
Asking your patients to pay is a true art form. When asking patients for payment, be pleasant but steady in your approach. Never laugh, but offering a warm smile is appropriate. Always look the patient in the eye and maintain eye contact throughout the payment interaction.
While some patients will never want to pay, others are prepared to tender payment at the time of service. Front office staff, often as instructed by management, have a tendency to brush off patients because of the complexity of the transaction. Our payment system is indeed complex, but it’s time to stop making that an excuse. The bottom line: if you don’t ask, you won’t get paid.
Replace old credit card terminals tethered to the wall with streamlined devices that are easily accessible at each workstation. Consider offering flexible payment applications like payment plans, card on file and online payments, deployed with an automated receipting process. To further streamline the process for your staff, integrate the new payment tools into the daily reconciliation process.
Results are limited, with patients largely ignoring the paper notices that show up in their mailbox. With snail mail on the decline in the U.S., many patients don’t even check their mail on a daily basis. A more effective strategy is to transmit statements electronically, linking an online payment system with an automated receipting process. Your time-of-service solution may include an e-statement option, or you may integrate the e-statements in your patient portal. Regardless, tie payments into your practice management system to electronically remit and to simplify the end-of-day batch-out process.
Another huge benefit? E-statements are free—a huge cost savings over paper statements that are transmitted through the postal system; with postage, printing and supplies, it typically costs $.75 to send each paper statement!
Furthermore, patient balances carry over from month to month, without increasing or incurring any penalties. With no sense of urgency, the patient has little incentive to pay. Include a specific due date on the statement, and don’t make it obvious that the payment doesn’t increase with each 30-day “box” that commonly appears on statements. Unfortunately, those boxes just highlight the fact that the patient can wait a few more months before paying.
15 days from when? The patient probably has a very different date in mind than you do. Don’t leave the payment due date up to chance; clearly list a specific due date on the statement – and follow through!
Eliminate the term “past due” from your vernacular and collect on all balances. Consider that patients walk into your business; if you send out a statement later that week, the patient will hesitate to pay. Not surprisingly, patients will think, “I was just there; they didn’t even ask for payment!?” This doesn’t bode well for you, as you’ve missed a critical opportunity to collect payment. For patients who do not pay off their balance before they see the physician, hand them a statement before they leave your office.
Develop a small form to record the amount due, and pass it to the patient when asking for payment. Or, if you’ve moved to a point-of-service solution, hand or direct the patient to the device that will display the amount owed and provide them with flexible payment options.
Don’t interrupt. Use the silence to your advantage. If you take the lead, patients typically get the better end of the deal. In a moment of panic, you may even suggest that their $1,000 balance be paid off in $5-a-month installments, leaving you with little money—and loads of administrative costs! Once you ask for payment, stop talking and wait for the patient to respond.
To set up a payment plan, start by asking the patient, “How much more time do you need?” The patient’s response will most often be a shorter time period than you would have offered. Add any “odd” amount to the first payment. For example, for a balance of $431.78, collect $131.78 for the initial payment, then the remaining $100 for each of the next three months.
Always collect the first payment when the payment plan is established, and request that the patient maintain a credit card on file so that you can easily process future payments. Always send a receipt after each payment.
To monitor these, significant staff resources are expended to cull through accounts to determine which patients are on payment plans and which patients are in compliance. That’s if the plans are monitored at all…
But wait! There’s a better way! Streamline this process by creating a separate category in your practice management system for payment plans, just as you would for a commercial insurer. Include the category when you run management reports about the performance of your receivables, but recognize that payment plans must be assessed separately. Your practice has, in essence, agreed to “age” the receivables for 60, 90, 120, etc., days.
Why? Simply because that’s the way we’ve always done it. But it’s time to change! As technology evolves, and we move from paper statements to e-statements, it is important to send more notices over a shorter period of time. How do you do this? Send statements twice a month, and shorten your payment plan installment periods to twice-monthly, as well.
Particularly for the latter, patients will face lower payments in each installment, and be more apt to comply with the schedule—especially if it’s an automated payment plan that requires no action on their part to initiate each payment.
There’s a higher return on investment from dedicating resources to managing the insurance side of your business. Focus your employees on transmitting claims, working edits, handling denials, submitting appeals and contending with the nuances of the reimbursement landscape in your local market, but don’t just ignore collections.
Contract with a third party to handle collections for you, ideally from beginning to end. Engaging a trusted partner allows you to focus on what you’re best at – while being assured that you capture every dollar you deserve.
Navicure’s cloud-based healthcare claims management and patient payment solutions help healthcare organizations of all sizes increase revenue, accelerate cash flow, and reduce costs associated with managing insurance claims and patient payments. Serving more than 90,000 healthcare providers nationwide, Navicure’s technology solutions automate account receivables processes, including claims management; patient eligibility verification; remittance and denial management including automated secondary claims filing, appeals, and posting; reporting and analysis; and patient payment collections at and near the time of service. Navicure’s solutions are supported by its unique 3-Ring® Client Service which guarantees that a client service representative will answer every client call in three rings or less. Navicure is the exclusive billing and patient payment solution of the MGMA Executive Partner network.
Elizabeth Woodcock is a speaker, trainer and author who is passionately dedicated to helping physician practices achieve and sustain patient satisfaction, practice efficiency, and profitability. An expert at practice operations and revenue cycle management, she is nationally recognized for her outstanding presentations and writings aimed at improving the business of medicine. With rich experience in consulting, training, and industry research, Elizabeth has led educational session for the nation's most prominent health care professional associations, specialty societies, and medical societies. In addition to presenting at conferences, she contributes to internal training for group practices and health systems across the country. Her clients include the American Medical Association, Medical Group Management Association, Ohio State Medical Association, Mayo Clinic, Massachusetts General Physicians Organization, and many, many others.