Five Tips for Boosting Patient Collections

November 2, 2013

The best advice for practices struggling with patient collections is to have a plan, make sure everyone knows the plan, and then follow the plan.

What do you get when you increase your number of lower-income patients with high-copay and high-deductible insurance plans? You guessed it: cash flow problems.

For all of the (justifiable) complaints about the payment practices of certain insurance companies, it’s well known that the least reliable payers are usually the patients. Conditioned to see healthcare as a right, many people believe physicians are obligated to provide them with free healthcare. Others truly have a difficult time paying what they owe. Still others tend to “forget” to bring their copays, deductibles, and unpaid balances to their appointments - every single time.

When patients are juggling their bills, the doctor’s bill always seems to end up at the bottom of the pile. Why? Because people have already received the service, they don’t expect you to deny them future service, and many practices have proven to be woefully inept at patient collections.

Indeed, collecting payments from patients has always been the biggest headache in private practice. And that headache has continued to get bigger as more patients have lost their health insurance during the recent economic downturn or been shunted into high-deductible plans that put more of the collection burden on you. And there’s more bad news: That headache is about to become a migraine.

With its various insurance exchanges and mandates, the Affordable Care Act will create millions of newly covered patients beginning in January. Many will be covered by the least-expensive plans allowed by the law, which come with higher deductibles and copays.

So what can you do? The best advice is to have a plan, make sure everyone (employees and patients) knows the plan, and then follow the plan.

In particular:

1. Make the most of your collection opportunities. You have three specific opportunities to get paid or ensure future payment: When a patient calls to make an appointment, when he arrives for the appointment, and just before he leaves. Once a patient leaves your office without paying, your chances of getting paid decline dramatically.

2. Be clear with your patients. A patient who is about to undergo an expensive nonemergency procedure for which insurance won’t fully pay needs to have a conversation with a financial counselor first. The same thing goes for the patient who’s embarking on a long treatment protocol for a chronic illness. The counselor - who could be someone in your billing office who is specially trained for this role or the billing manager - should provide a rough estimate of the costs, the patient’s probable financial responsibility, and her options for payment.

3. Train your staff correctly. Your front-desk staff should have a script so they know exactly what to say to patients about payment. For example, too many staffers ask, “Would you like to make a payment today, Mrs. Johnson?” What they should ask is, “How would you like to pay your balance today, Mrs. Johnson?”

4. Accept all forms of payment. If you resent the processing fees charged by credit card companies, then compare that minimal expense to the cost of spending weeks and months chasing down patients or not getting paid at all. Take plastic.

5. Don’t send a patient more than three collections letters. Make sure the second letter advises that his payment is overdue and there’s a risk of being sent to collections. The third letter should be stamped FINAL NOTICE and inform the patient that his account is being sent to collections. If he still doesn’t pay - send him to collections.

Finally, many practices wonder if it’s okay to drop a patient due to nonpayment. Generally, the answer is yes. But be careful: dropping a patient is subject to the laws of patient abandonment, which vary by state, and doing so could increase your chances of being sued - even frivolously - for malpractice. Make sure you know how to discharge a patient correctly.