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Introduction

STRATEGY #1

Ask politely, but firmly

STRATEGY #2

Develop workstation aids

STRATEGY #3

Transition to e-statements

STRATEGY #4

Alter your statements

STRATEGY #5

Record due dates

STRATEGY #6

Ask for balances

STRATEGY #7

Maintain privacy

STRATEGY #8

Listen, listen, listen

STRATEGY #9

Institute payment plans

STRATEGY #10

Categorize payment plans

STRATEGY #11

Toss the 30-day cycle

STRATEGY #12

Outsource

Conclusion

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By Elizabeth W. Woodcock
MBA, FACMPE, CPC

Patient Collections:
12 Strategies for Success

We’ll explore strategies that will help you learn how to:
  • Ask for payment politely, but firmly
  • Institute payment plans via credit card on file
  • Implement additional strategies to help you start seeing tangible changes to your bottom line!

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.

ACA Insurance Marketplace Plans: Average Medical Deductible, in Plans with Combined Medical and Prescription Drug Deductibles.*

$5,328
Bronze
$2,556
Silver
$845
Gold
$69
Platinum
EXPLORE THE 
12
 STEPS
STRATEGY

01

Ask politely, but firmly

Strategy #1

Ask politely, but firmly

Practice asking for money; it’s a skill that is learned, not one that comes naturally.

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.

Tip:

Use an unwavering tone when asking for payment.

Thanks!

STRATEGY

02

Develop workstation aids

Strategy #2

Develop workstation aids

Install tools that can expedite the payment process.

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.

Tip:

Spend a day at the front office observing the workflow; implement changes that reduce barriers to collections and make the process easy and flexible—for both patients and staff.

Thanks!

STRATEGY

03

Transition to e-Statements

Strategy #3

Transition to e-Statements

Physicians spend upward of $8,000 each year sending out statements.

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!

Tip:

Start collecting a valid email address from patients as part of your check-in process. This ensures that your e-statements are always sent to the right address.

Thanks!

STRATEGY

04

Alter your statements

Strategy #4

Alter your statements

Of all the businesses from which patients receive statements, healthcare providers are the only ones who can’t take back their service.

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.

Tip:

Be simple in your messaging on statements; show exactly what is due and when.

Thanks!

STRATEGY

05

Record due dates

Strategy #5

Record due dates

It may seem overly simplistic, but we’ve had a habit of asking patients to pay in, say, 15 days.

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!

Tip:

Don’t offer a due date without following through. Transfer the patient to the next running cycle within two business days of the stated due date.

Thanks!

STRATEGY

06

Ask for balances

Strategy #6

Ask for balances

Never miss an opportunity to request payment of a balance, whether it’s 90 days old or one hour. 

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.

Tip:

Always ask patients to pay their balance when they are in your office; don’t overlook this important collection opportunity!

Thanks!

STRATEGY

07

Maintain privacy

Strategy #7

Maintain privacy

Patients don’t want the amount they owe to be publicized all over the reception area, particularly when it comes to outstanding balances.

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.

Tip:

Use the appointment scheduling call as another opportunity to ask about balances owed, and collect payment information over the phone.

Thanks!

STRATEGY

08

Listen, listen, listen

Strategy #8

Listen, listen, listen

Once you ask a patient for money, listen carefully.

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.

Tip:

Listen to patients after you ask for payment, resisting the urge to speak first or interrupt.

Thanks!

STRATEGY

09

Institute payment plans via credit card on file

Strategy #9

Institute payment plans via credit card on file

Payment plans are important because they allow patients to pay off their balance in regular installments, while also ensuring steady cash flow for your practice.

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.

Tip:

Develop a card-on-file program, allowing you to securely maintain patients’ credit cards for easy payment. They will appreciate the ease of payment!

Thanks!

STRATEGY

10

Categorize payment plans

Strategy #10

Categorize payment plans

Historically, payment plans are established and then buried within the rest of patient responsibility.

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.

Tip:

A payment plan should not be categorized as a payment plan unless the first installment has been collected.

Thanks!

STRATEGY

11

Toss the 30-day cycle

Strategy #11

Toss the 30-day cycle

Practices send statements every 30 days, and payment plans are established on a 30-day cycle.

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.

Tip:

Twice-monthly collections for payment plans cut the installments in half, increasing the likelihood of collection.

Thanks!

STRATEGY

12

Outsource

Strategy #12

Outsource

Competing resources in the business office typically means that collections gets the short stick, and that’s actually how it should be.

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.

Tip:

Engage with a collections partner that allows you to seamlessly transmit and receive account data from your practice management system.

Thanks!

Conclusion

Conclusion

Keep these 12 strategies in mind as you look for ways to boost your practice's ability to collect the revenue it is due. 

Patient balances have been notoriously hard to collect, and that fact certainly doesn't bode well for the future as insurers shift more financial responsibility for healthcare services to patients.
Collections is a complex business function but so are a lot of the things we deal with each day in a medical practice. While practices have relied on collecting copayments from patients as they present, it’s time to take it up a notch – several notches, actually. With a clear cut plan, greater staff awareness and a more global approach to finding collections opportunities, you’ll enjoy an increase in cash flow. Properly managed and executed, the benefits of your efforts to revitalize collections will be time well spent.

ABOUT NAVICURE

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.

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ABOUT Elizabeth W. Woodcock

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.

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