While the business of healthcare is somewhat in flux, the average medical practice continues to render medical services under the existing framework of health insurance. This can be a particular challenge these days due to high deductible health plans, where patients are responsible for a larger portion of their healthcare bills.
Additionally, patients are starting to pay more attention to the value and quality of the healthcare they are receiving, and are more likely to question their bills than ever before. What does this mean for your practice and how can you improve the manner in which you are handling your patients and your patient billing and collection process?
The average person feels obligated to pay for items and services they have received. However, healthcare is intangible and, unlike a piece of clothing or a car, once a patient leaves the doctor’s office (empty-handed but feeling better, hopefully) they can begin to feel separated from the value of the services received. This means practices must be diligent about collecting payment or establishing effective payment options as close to the time of service as possible.
How do you collect money from your patients? Making it more convenient makes it more likely your patients will pay quickly, if not on the spot. Does this mean offering credit card payments? Setting up automated payment plans? Practices also need to adjust their collection approach to meet the expectations of their patients. Younger patients expect to pay electronically and may not even look at paper invoices arriving in the mail. Older patients may still prefer paper invoices and/or payment by check. Most patients are willing to provide a credit card for the practice to keep on file and/or establish a payment plan, though too many practices fail to even ask for a card to be provided. There is no reason a variety of approaches cannot be offered at the same time, as long as they are spelled out clearly.
Another issue which often makes it challenging to collect from patients is when the cost of the services/bill comes as a surprise. Patients, like any consumer, can become angry when the cost of what they “bought” is more than expected. Unlike going to the store, patients often have no idea upfront what they will be spending on healthcare and whether they even can afford the service. This lack of information also makes it difficult for patients to shop around for comparable services. While it is not always clear exactly what a patient’s bill will be before services are rendered/tests are run, most of the time, my practice clients can offer at least an estimate of costs and are usually quite accurate in their estimates. Practices that are upfront about potential costs find that their patients are more cooperative in making payment arrangements and following through on such payments. The same patients are often willing to choose a practice that is more transparent with its costs over a competitor that is not. This is also an important factor for practices to consider.
Most importantly, whatever your practice policy may be regarding pricing, payments, and collections, every practice must have a sound financial policy which explains the process by which services are billed and how payments can be made. The more information shared with patients—and the more often it is shared—the greater the chance that patients will fully understand and comply with the policy.
Some additional tips to help patients better understand the practice’s financial policies:
1. Break down the policy into parts and have the patient initial their understanding of each part. Lengthy policies with long paragraphs are rarely read or understood.
2. Have the staff review the policy with patients. This can be especially helpful for older patients or those who do not speak English as well.
3. Ask for the policy to be signed each time a patient visits the office. I find this annoying myself as a patient; however, my practice clients have reported that patients who visit often and are asked to review and sign the policy each time are more familiar with the policies as a result.
4. Review the policies regularly to be sure they are clear, accurate, and still reflect the practice’s policies. Be sure your practice is also billing and collecting in compliance with the law.
Addressing a patient’s ability and willingness to pay for services upfront can go far towards a practice’s financial health. Think about how your practice can make some changes to develop a better relationship with its consumers and improve its bottom line at the same time.
Ericka L. Adler is a partner at the firm of Roetzel & Andress. Her primary practice focus is in the areas of regulatory and transactional healthcare law. Adler advises physicians and other providers regarding day-to-day practice management, physician contract matters, compliance and other business issues. E-mail her here.