Revenue Cycle Management: The Patient Component 4 Tips for Improving Patient Collections by Sue Kay

In the past, a discussion of how to improve practice billing and collection procedures primarily focused on the back office and the practice’s insurance billing/collection processes. Over the past few years, we have seen a dramatic shift toward increased patient payment responsibility as evidenced by the following statistics:

  • In its April 16, 2010 report, the Bureau of Labor Statistics shows the national unemployment rate to be 9.7 percent.
  • Patient deductibles in general are increasing. In 2008, the median PPO patient deductible was $1000.
  • The number of patients with high-deductible health plans is continuing to increase. According to the National Center of Health Statistics, 22.7 percent of people under the age of 65 with private health insurance are enrolled in high deductible health plans.
  • Patient Bad Debt is on the rise as well. According to the McKinsey report, 36 percent of patients have a balance of 60 days or more past due.

With that in mind, a discussion on improving practice billing/collection procedures must also shift – from the back office to the front office where most patient interaction and communication occur. Here are 4 tips for improving patient collections:

1. Analyze your practice’s processes and protocols by asking yourself the following 40 questions. The MGMA Health Care Consulting Group recently published a list of 40 questions for practice administrators/office managers to ask themselves in relation to patient collections. You can find these 40 questions here.

We at Efficiency in Practice find the MGMA to be an extremely valuable resource to our practices. When you click on the link above, you may also find it helpful to subscribe to their practice blog. You can do so on the right-hand side of the same page.

2. Establish (and document) a clear patient payment policy. The best policies are straightforward and simple. Decide exactly how your practice will handle:

a. co-pays (paid at front desk at time of service)

b. deductibles (due at time of service not 60 days later after you’ve filed an insurance claim and determine the patient has not yet met his deductible)

c. payment plans (establish your parameters in advance. Many consultants recommend you determine a practice policy for the maximum length of time you would allow for a payment plan and the minimum monthly amount you would accept as part of that plan. For example: No longer than 6 months with a $50.00 minimum monthly payment required. You may also choose to require a credit card to be kept on file for patients with payment plans. If they miss a scheduled payment, you are then authorized to charge the remaining balance due to the card on file.)

3. Make sure your staff understands the patient communication/patient payment connection. You must educate your patients on your payment policies as they relate to uncovered services, co-pays and deductibles. It is recommended that you communicate these policies in the following ways/at the following times:

a. in a practice brochure (preferably mailed to new patients in advance of their initial visit to your practice.

b. When the appointment is made, remind patients that payment is expected at the time of service. (Write out in script format the exact verbiage you want your front office staff to use when communicating this information to patients over the phone. For example: Just to confirm – I have you scheduled for an appointment on [Date] at [Time]. So that you can be prepared, I also wanted to make you aware that we will ask for any deductibles and co-pays to be paid in advance at the time of check-in.)

c. At check-in. (Again, write out in script format what you want your front desk personnel to say. For example: Mrs. Smith, your co-pay is _______. How would you like to pay for that today?)

4. Accept Debit/Credit Card Transactions. If you want to collect payments from patients at the time of service, you must get your practice set up to accept debit/credit card payment. This is the primary way that your patients pay for all other services provided to them, and they expect you to be able to process such transactions as well. Although you will pay a fee to process such transactions, this fee is considerably less in the long run than the cost of repeated attempts to collect patient obligations after the fact.

© 2010 Efficiency in Practice

Sue Kay, Senior Consultant at InHealth, is the editor of Efficiency in Practice, the free eNewsletter for medical practice managers who want to save time, money and reduce risk. For more information and to access your FREE report, The 8 Things You MUST  Know About CMS’ RAC Program, visit www.efficiencyinpractice.com or check out our blog at www.efficiencyinpractice.blogspot.com.

This article can be reprinted freely online, as long as the entire article and this resource box are included.



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