Getting More from Self-Pay: 7 Tips for Improving Patient Payments
As health care costs continue to rise, patients are being required to pay more and more of those costs out of their own pockets in the form of higher premiums, deductibles, and copayments. Consumer-directed health care plans are also becoming more popular. This means that healthcare providers must derive a growing portion of their revenue from direct payments by patients, an often aggravating process that involves significant work, hassle, and cost.
Athenahealth recently developed a white paper describing practical tips on how to deploy a self-pay strategy that makes it easy and comfortable for patients to pay the balances they owe.
This article highlights some of the key findings you can implement to relieve your staff of excess workload, make the self-pay process more efficient, and help boost revenue and speed of payment. For healthcare providers, an increasing proportion of their revenue is being derived from direct payments by their patients. In fact, patient receipts now account for 19 percent of the average practice’s accounts receivable.
However, statistics show that for medical practices self-pay collections are a source of rising concern, increasing costs, staff time, and lost revenue. Fifty percent of overall patient responsibility goes uncollected.
As bad as this situation is, there are ways to remedy it. The reasons patients give for non-payment of health care bills suggest that making it easier to pay and reminding patients to pay can increase payments. A McKinsey consumer healthcare payment survey determined that about 80% of the reasons that patients gave for late or nonpayment of health care bills are addressable. The major ones were:
“I forgot to pay or was confused about what I owe.”
“I just received my statement.”
“Lack of financing options.”
Making Self-Pay Work for Patients and Practices
In light of the highly personal relationships health care providers have with their patients, handling self-pays can be dicey. Some practices choose to defer self-pay issues by outsourcing their billing entirely.
Below are seven practical tips for establishing and maintaining a successful patient collections process that will not overtax your staff.
Develop and communicate a self-pay policy – create a well-thought-out self-pay policy for your practice. Communicating clearly with your patients about financial responsibilities and working openly with them to resolve outstanding balance issues establishes practice expectations and patient accountability.
Use automated reminder calls to alert patients to self-pay balances and obligations – Most people feel better about making payments at the time of service if they know in advance that payment is expected. If your practice makes appointment reminder calls, include a message that confirms that the patient insurance information on file is still accurate, and ask patients to inform you of any changes prior to the appointment. Reminds patients that co-pays and previous balances are due at time of service.
Make self-pay collection an integral part of your practice workflow – Discuss your practice’s approach to self-pay with your staff and help them understand the importance of collecting self-pay amounts. To ensure proper and accurate communication with patients, provide scripts for your front desk staff to help them ask for co-pays, deductibles, and previous balances.
Collect what you’re owed on the spot – The likelihood of receiving payment for your services declines over time. Getting full or partial payment in advance or at the time of service or capturing credit card information to ensure a future payment, will positively impact practice revenue.
Consider policies and measures to encourage prompt and full payment – Offer a time-of-service payment discount. AAs an incentive for payment, you could offer a modest discount for payments at the time of the visit. Another type of modest discount can be offered if patients pay in cash, rather than by credit card.
Follow up on self-pay obligations early and often – Rapid follow-up on unpaid patient balances is essential for financial success. There are a number of ways to ensure that your patients are aware of their obligations and are able to pay you conveniently. Call on the day of service to remind the patient to make payment. Make two reminder calls per statement cycle. Send two reminder e-mails per statement cycle. Establish a patient portal to post balances and take electronic payment.
After you’ve done all you can — and only then — employ a collection agency – This is a difficult step to take, but once a patient balance has been overdue for four months, a more aggressive action is necessary. Therefore, once a month, review all patient balances that have aged over 120 days and send those accounts to your collection agency.
As your patients assume more and more of the cost of their own health care, your practice will need to be increasingly vigilant about collecting patient payments. The way the economics of 21st-century healthcare are shaping up for private practices, this is not just important, but may be necessary for survival.
If your practice is struggling to collect unpaid medical bills, contact us today to learn about our financing solutions to help you get paid quicker.