• Cecilia Li

Strategies to Collect and Avoid Late Payments from Patients

Updated: Jun 8

When it comes to medical practice, collecting patient payments may be the most unsavory experience, particularly when they are late.

With continuously rising deductibles, more patients are taking on more financial responsibility for their medical care, especially with the pandemic. Unfortunately, their payments often come in late, failing to meet the net 30 terms of payment.

Why collecting patient payments can be difficult in healthcare

Consider different scenarios in which patients may be unable to pay their medical bills. In one scenario, patients may struggle with convoluted billing processes.

They may be unsure of what proportion of the bill is covered by insurance or is an out-of-pocket expense, and they may even be unsure of when their payment is due.

In another scenario, patients may simply be unable to afford to pay their medicare. This often arises from unclear communication on the financial policies and requirements of healthcare providers.

In order to keep your practice running and your professional staffing at optimal levels, it is important to ensure that both cash flow and profitability are unhampered. This means doubling down on collecting patient payments.

In this article, we shall explore 5 tips to help providers streamline their payment process and collect outstanding patient balances without affecting the overall patient experience.

1. Collect patient payments faster with billing automation

According to a Navicure survey, 62% of healthcare organizations do not offer electronic credit card payments, 57% only send bills through the mail, and 52% have no automatic payments.

While, traditionally, it was sufficient for a practice to provide services, collect copay, submit a claim, and then bill the patient, the current methods of billing and collection in most practices are no longer optimal.

This can be attributed in part to growth in the healthcare sector but is also due to changing consumer habits and expectations. According to research from NTT Data, 59% of U.S. consumers expect their healthcare digital customer experience to be similar to retail.

With automated billing software, your practice can streamline collecting patient payments by tracking past dues, automating late fees, and identifying delinquent patients early.

Although purchasing the software is an extra expense, in the long run, it allows you to save on internal billing resources and improve the rate of collecting patient payments.

2. Ensure transparency in your healthcare payment collections

In many cases, difficulties in collecting patient payments arise from the patient’s inability to afford to pay for the services rendered. For some patients, this arises from confusion about the out-of-pocket expenses made necessary by health insurance deductibles.

However, more commonly, patients fail to clear their bills because they did not know how much medical services would cost or were mistaken about their eligibility for certain insurance perks.

To help your practice circumvent this, it is crucial to be as transparent as possible with patients about the costs of services and procedures. Check your patients’ insurance coverage in advance before consultation and inform them of the expected cost implications in the discussion leading up to management.

Patients are also on board with the concept of billing transparency. According to InstaMed's 7th Trends in Healthcare Payments Report, 92% of patients want to know their payment responsibility before the visit.

With this information, the onus is now on practices to improve their systems of providing billing transparency, to reduce issues with collecting patient payments.

3. Send timely reminders to collect payments for healthcare services

For a large number of patients, late payments come down to one simple thing: forgetfulness. In fact, a survey by Waystar found that nearly 20% of patients cited forgetfulness as the reason for their failure to make their payments in time.

In the past, when most healthcare providers received 90% of their reimbursement from insurance companies, the flow of revenue remained unhampered even with late payments from out-of-pocket paying patients.

However, with the rapid increase in high deductible health plans (HDHPs), nearly a third of healthcare provider revenue now comes directly from patients. This means that even though 20% may seem like a measly fraction, it can still have disastrous effects on the flow of revenue for your practice.

Many practices are now opting for patient payment reminder technology to follow up with patients, help communicate financial information to them, and ease the process of collecting patient payments.

With automated messages via email, text, or even voice messages, patient engagement is much easier. Patients receive regular reminders of not just when their payments are due, but also of out-of-pocket costs, and co-payments.

4. Accept multiple payment methods when collecting patient payments

With changes in consumer behavior across many sectors, more Americans have become accustomed to using multiple payment options, with about 70% of them using at least 3 different methods to pay their bills each month.

This is no different for the healthcare industry. To ease the process of collecting patient payments, it is a good idea to offer payers multiple payment formats.

Consider implementing more consumer-friendly electronic payment methods in your practice, especially online payment. This can include credit and debit card options, eChecks, or mobile payment systems like Apple Pay or Samsung Pay.

DearDoc's Text-to-Pay is designed to help medical practices collect payments easier through text messages. Patients will get a direct payment link through their mobile text and reminders to pay. Book a free demo to see how it works.

5. Offer flexible healthcare payment plans

With the rise in HDHPs, payment plans are a great way to remove financial stress from patient interactions while also removing revenue cycle pressure from your practice.

Although at first glance, a patient payment plan spanning several months may seem solely beneficial to the patient, healthcare organizations have developed strategies to ensure their own financial security, even with patients given longer durations to clear bills.

Excelsior Springs Hospital, for example, partnered with CarePayment, a patient collections vendor, to offer payment plans spanning up to 25 months to help patients clear their out-of-pocket costs owed.

Third-party vendors and banks allow healthcare organizations to implement payment plans that enable either the patient or provider to break down large medical bills into more affordable smaller payments over a certain duration without putting either the provider or the patient at marked financial risk.

Are you in the healthcare industry? Let’s make collecting patient payments easier for you

At DearDoc, we aim to help doctors leverage tech in their physician practices to improve patient billing as well as their time of service collection and overall practice management.

With our text-to-pay and telehealth features, collecting patient payments and connecting with patients are made much more accurate and far less cumbersome. Contact us to start boosting your collection rates today:

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