A 2014 survey conducted by the Medical Group Management Association (MGMA) finds that collecting balances due from patients is the seventh most “intense and applicable challenge” for the members surveyed.
And no wonder. According to a 2014 survey by the Kaiser Family Foundation, the average yearly deductible in the United States has more than doubled in the last eight years, to just over $1200 for an individual plan and $2400 for family coverage.
On top of this, patients have to pony up for co-pays, medications, and services and procedures that aren’t covered by their insurance, and more than one-third of Americans lack the resources to meet these deductibles. And that’s patients who have insurance. Even with the Affordable Care Act, some 30 million Americans are still without health insurance.
For medical practices, this mean billing and collecting from individual patients has become a routine part of practice management. Collecting from patients is never easy—after all, you are in this business to care for people, not make their problems worse by dunning them for medical bills. But maintaining a healthy practice—a necessity if you are going to help any patients at all—requires getting this right.
Talk about it
Good communication is step one.
Tammie Olson, a former practice manager now with Management Resource Group, says that practices need a definite payment policy, and patients need to be educated about that policy.
“Let the patient know how much they will be expected to pay up front. I always had my front desk collect the amount of a level-three visit before the patient was taken back. If the visit was more than that, the desk would collect any balance due at checkout,” Olson says.
Good communication works both ways, however. Not only should the patient understand your policies, “you need to understand your patient’s situation,” says Laura Palmer, director of professional development with the MGMA.
This understanding goes beyond the front desk and all the way to the examination room.
“If the physician is aware of the patient’s financial situation, he or she may be able to delay or postpone some treatments or recommend treatments that are less costly,” says Palmer. “In addition, many communities have programs that offer low-cost mammograms and vaccines, and patients can be referred to them for services they offer. Check local health departments, women and children’s centers, and church groups to find out what is available locally.”
If you have a large number of self-paying patients, it might be worth the effort and expense to keep a social worker or patient counselor on staff to help locate these services.
“It may seem like too much expense,” says Palmer, “but you’ll spend that money collecting, or you’ll have to write it off as uncollectible debt. It’s sort of a pay me now or pay me later situation.”
Some practices offer discounts to uninsured patients, but be aware, says Olson, that if you are a Medicare provider, you can’t charge self-payers less than the allowed Medicare amount for the service.
Sending the bill
Collecting from patients may not be as hard as you think.
“If patients are able to pay, they are usually willing to,” says Palmer. “But you have to be realistic about what they can pay. Dividing the balance into thirds and expecting to get the bill satisfied in three months is often not realistic. If you accept a smaller amount, even five or 10 dollars a month, you are more likely to get regular payments.”
Ask the patient to sign an agreement to pay what they feel they can each month, and make sure the agreement is simple and easy to understand—no complicate legalese; Palmer recommends a third-grade reading level. Then make is easy for the patient to pay and easy for you to collect. Perhaps you can arrange for an automatic bank debit on the patient’s payday. Some practices find that accepting post-dated checks works well; others keep an authorized credit card number on file and debit the card at an agreed upon time each month.
Don’t make it so easy you let it slide, though.
“It is very important to work your accounts receivable daily,” says Olson. “If a patient is not making the agreed-upon payments, you have to call and remind them.” A friendly reminder is often all it takes to get the payments back on track.
“Above all,” says Olson, “be friendly and considerate.” Health care is all about relationships, and if you keep these in good shape, collections will be a lot easier.
Avery Hurt is a freelance writer based in Birmingham, Ala. She often writes about medical economics and the intersection of medicine and social policy.
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