Patient Payment Collection Policy Mistakes to Avoid

February 5, 2014

Medical practices face increasing difficulty collecting from payers, but off-loading the burden to patients is a big mistake.

As someone who represents physician practices and writes many of the financial policies presented to patients, it’s always an interesting experience for me to go to my own physician’s office (who I do not represent) and be on the receiving end of similar financial policies.

Last month I went to my doctor’s office and checked in at the front desk. I was asked for my insurance card and my credit card. When I asked why I had to provide a credit card, staff said there was a new policy and that I would now be billed immediately if my insurance did not pay, but “not to worry,” as I would receive a call first to let me know!

Being somewhat familiar with how these policies typically work, I asked for a copy to review. Generally, this practice’s approach is as follows:

1. It expects payment at time of service.

2. It requires a credit card to be kept on file, but it makes no charges without notifying the patient. Specifically, the practice can leave a message and no actual communication is required with the patient as to the status of the insurance claim.

3. According to the practice, because state law (in this case) requires insurance carriers to pay claims within 30 days, if my carrier does not comply with state law, it’s the patient’s responsibility to contact the carrier if the practice is not paid within 30 days. Otherwise, the practice charges the patient’s credit card.

Aside from the short period provided for the insurance company to pay (even 30 more days would probably not be enough in many states, no matter what the law says), the expectation that patients contact their insurance as a first step is simply unreasonable. In this particular practice, which is large and maintains a sophisticated billing staff, placing this immediate responsibility on the patient (in my opinion) is premature.

This practice’s policy is that it will submit to insurance and, as such, it needs to have an appropriate policy to allow time for payment. Otherwise, it should require its patients to submit claims on their own without pretense of handling the paperwork on the patient’s behalf.

Even if the above process is acceptable to some, I think the practice must consider the manner in which it presents the process to patients, both in the wording of any statement and the terminology used by the front-desk staff. This is especially important as a patient’s evaluation of his physician/practice is often tied to front-desk experiences and even incentive compensation arrangements.

Consider the following in developing your practice’s policies:

1. The front-desk personnel should explain that there is a new policy and why it has been put in place before simply demanding a credit card.

2. Office staff should actually be able to explain the policy and answer patient questions. They should not become defensive if a patient requests clarification. This comes with proper staff training and role playing. In this case, the office staff was hostile when I asked them to explain the policy and their responses were incorrect (i.e. did not match the policy itself).

3. Is your policy reasonable? Is your practice’s expectation, regardless of what state law provides, realistic? Given delays caused by healthcare reform, this policy is almost guaranteed to allow the practice to charge the credits cards of all patients.  Having the patient call is not going to change the carrier’s timeline or cause the carrier to lose the patient as a beneficiary. However, charging a patient's credit card after 30 days with no effort on the part of the practice to reach out to the carrier will challenge the patient's feelings about remaining with this medical practice.

I am completely sympathetic to struggles practices face in collecting accounts receivable. However, in my view, being unnecessarily aggressive can be off-putting to patients. There is a cost to doing business and it’s a burden to be shared between patient and practice, not off-loaded to patients who are unlikely to understand the process.

While the importance of collecting in an efficient manner is undeniable, a policy that balances respect for the patient and a realistic timeline for payment is ideal.