A step-by-step guide to collecting patient payments

With the ever-evolving landscape that is healthcare, independent practices face tons of challenges, one being medical billing. In fact, the cost alone of third-party billing and collecting patient payments has made it harder and harder for smaller practices. In 2018, JAMA Network reported that “of professional revenue, professional billing costs were estimated to represent 14.5% for primary care visits.” 

How do practices easily navigate the ins and outs of collections? Although there are many sticky situations to consider — complicated insurance rules, coding errors, high administrative costs, and confusing regulations — take time to focus on the best ways to collect patient payments easily. 

Set your practice up for success by evaluating and establishing systems, training both administrative and medical staff, and utilizing those in the front office as the first line of gathering the information needed to collect patient payments. 

The first step to collecting patient payments is to evaluate the existing system and adjust current policies and processes that are not effective or don't yet exist. This process breaks down into 5 steps.

A practice should assess its success level by measuring and comparing key performance metrics. Here are some ways a practice might evaluate and monitor the success of its collection process:

Once the numbers have been calculated and compared, the results can be used to adjust the practice's current billing policies and protocols for a higher rate of success. 

Now that the performance has been evaluated, it’s time to assess the practice’s current financial policy or develop a new one.

Although not a comprehensive list, here are some starter questions that a payment policy could incorporate:

Once your office has created or updated the payment policy, it’s time to communicate it. This involves training both administrative and medical staff to be able to clearly communicate with patients what the payment expectations are for any service offered at the practice.

Practices may embed a patient responsibility agreement in the registration forms and the patient portal.

For general communication, and to cover all bases, practices may include their payment policies on their website.  Practices can also display policies on the wall beside reception.

The more places the healthcare practice posts and communicates the policy, the less likely miscommunications will happen between patient and provider.

In this digital age, practices can use technology to their advantage. Having the right tech tools may help increase patient payments and reduce the time and money spent on collecting.

For example, many practices are still using paper billing — as of 2017, it was 77%, to be exact. Use technology to reduce the cost of billing, thereby eliminating the need for paper statements. This can include:

As another example, practices can use technology to collect and verify insurance information, ensuring they accurately understand a patient's financial responsibility after applying insurance. This can reduce the time and money spent on administrative staff following up with patients.

More digitally inclined patients appreciate having a portal to:

Hosting a kiosk at the front office where patients can provide demographic and insurance information prior to their appointment is an excellent system to save the practice time and money.

If your practice wants to make the collections process easier, partner with a reputable medical billing company with a high success rate. A medical billing company already has processes and systems in place to take on the administrative load that comes with billing. They may use technology, such as robotic process automation (RPA), to automate billing processes to:

Partnering with a successful medical billing company can help a practice have clean claim rates, reduce the number of days in accounts receivable, and increase net collections. 

Because the front office, medical, and billing staff communicate important information like the payment policy to patients, it’s very important to ensure they’re impeccably trained. As part of Becker's billing redesign contest, more than 60% of patients said they were confused by their medical bills and associated payment processes. Your practice’s staff needs to be able to disseminate complicated medical and billing information.

A big piece of this puzzle is waivers.

When it’s clear the patient’s insurer will not reimburse for the service, your practice should obtain a financial waiver. Medicare requires the use of an Advance Beneficiary Notification (ABN) for certain services to alert beneficiaries of the possibility of financial responsibility. These waivers notify the patients upfront of their out-of-pocket financial obligation before performing the service. 

Medicare requires your practice to provide the ABN at the point of care. For example, if a patient wants a B12 shot, the tech who administers the shot must advise the patient (if applicable) that Medicare will not cover the treatment. This is why training staff at every level about payment policies is imperative for proper collection.

The front office team is the first line of defense in collecting correct patient information, leading to better collections. There are different ways to utilize the front office team to accurately collect patient information and offer education on collecting payments upfront.

The Kaiser Family Foundation reports that nearly 1 out of every 10 patients lacks insurance coverage. Practices can identify and offer resources to the uninsured population in several different ways.

Once a practice has established successful systems, created a strong payment policy, trained its staff thoroughly, collected patient information, and educated its patients on its policies and discounted financial offerings, it’s time to collect payments.

A TransUnion Healthcare study found that nearly 68% of patients don’t fully pay their medical bills. Collecting payments at the time of service can reduce the need to follow up on payments later. Practices may be able to offer a discount for prompt payment, in the case of self-pay patients.  

Definitive language is key. Instead of saying, “Would you like to pay, Ms. Jones?” Use a script similar to, “Ms. Jones, how would you like to pay today?”  While speaking, write out the receipt, demonstrating the intention to collect. 

It isn’t always possible for a patient to pay their entire bill post-visit. A practice can set up payment plans, but they need to have effective terms.

Elements of an effective payment plan include:

Once you have established a patient on a payment plan, you need to monitor the situation to be sure your practice receives payments. 

It’s a good idea to establish a protocol for tracking patient receivables. This keeps practices abreast of skipped payments. Create a separate category for patient receivables tied to payment plans, and monitor performance.

With the recovery rate for debt collections at only 20% to 30%, upfront payment is the way to go. Because paying at the point of service isn’t always possible for a patient, practices need to set themselves up for success to collect payments post-visit. They may use a credit card on file, or send email and text reminders.

Establish a dismissal policy for non-paying patients. Otherwise, a practice is apt to see more and more non-paying patients, particularly as the word gets out the practice tolerates failure to pay.

Every practice needs to be effectively collecting payments to have a healthy revenue cycle. With a thorough approach to the collection process — evaluating and adjusting existing systems, using technology, clear communication, and effective staff training — healthcare practices can increase their collections, ensuring a healthier financial future for their operations.

Avoid medical billing headaches by partnering with us. Tebra offers billing and payment software to help easily collect patient payments.