How to handle patient collections

Medical Economics Journal, Medical Economics August 2021, Volume 98, Issue 08

Collecting from patients is not an easy job, but there are ways to handle it in an efficient and compassionate manner. We talk to experts on how to prevent payment delinquencies and how to handle them when they occur.

Collecting from patients is not an easy job, but there are ways to handle it in an efficient and compassionate manner. We talk to experts on how to prevent payment delinquencies and how to handle them when they occur.

Ways to prevent delinquencies

Before physicians worry about collecting delinquent payments, there are several strategies to ensure collections take place up front. “Patients are consumers and they need to be treated like consumers,” according to Noel Felipe, senior vice president and revenue cycle practice leader at Firstsource, a company based in Columbus, Ohio, that offers digital solutions in the health care space. “Consumers make decisions about where they shop and what they pay. They make value judgments based on their perceived value of a product or ease of consuming that product. The health care industry has to migrate to that type of mentality.”

This means making payment as simple and efficient as purchasing a product on Amazon, utilizing technology so patients can pay by phone or iPad, steering clear of too much technical jargon and having a comprehensive patient portal. “Your patient portal should allow them to make payments, to establish payment plans,” he adds.

Additionally, he urges physicians to take some payment up front. “You should collect 100% of your copays at the time of service. Your chances of collecting money go down post-service by 54%.”

The only exception to taking payment up front may be in a practice that includes services such as labs or X-rays, according to Lillian Phelps, senior director for product management at Availity, a health information network in Jacksonville, Florida. “Maybe collecting payment is better on the back end in that case, because you don’t know if they have to get a lab drawn or an X-ray,” she says.

Payment plans

Payment plans and options are an effective way of getting patients to pay, Phelps says. “You should come up with a financial clearance policy that sets dollar thresholds and time frames. You might even look at the relationship you have with the patient — if this has been your patient for 10 or 15 years, and he’s never had a financial collection, there should be some sort of consideration for their history.”

Any form of collections is improved by including digital means of paying, says Phelps. “Are you sending your statements digitally? Do the statements have a link to pay the bill? Folks don’t go to the post office (much) anymore,” she says. “Being able to offer digital or mobile payment options is a great place to ensure the bill is paid.”

Having a digital means of paying also increases the likelihood of patients making some payment rather than none, Felipe points out. “If I owe my physician 500 bucks and I go onto the portal and I have no choice but to pay 500 bucks or leave, and I can’t afford it, I’m going to exit out. But if I have payment terms, I’m going to pay what I can pay.”

Propensity-to-pay analytics

Beyond simply making easy payment options available, Felipe encourages physicians to utilize propensity-to-pay analytics to drill down and figure out the demographic of a practice. “It’s easy to collect from people with high ability and high desire — those are automatic,” he says. “The people with low desire and high ability, you’re going to have to work at a bit. Propensity-to-pay modeling to help you understand where to place your expectations is critical in a successful physician practice.”

This sort of analysis can circumvent delinquencies by allowing the physician to preemptively offer financial resources and support to those patients most likely to have trouble paying, according to Srulik Dvorsky, cofounder and CEO of TailorMed, a health care IT company for health care providers and pharmacies in New York City.

“Instead of waiting for patients to experience financial distress or have a bill be written off, if you have the technology that can screen for patients based on their out-of-pocket responsibility, you can come to those patients as early as their diagnosis or registration and offer assistance programs,” Dvorsky says.

Additionally, remember that not every patient will engage in the same way, so pick the right strategy for the right demographic, Felipe says. “Baby boomers will not respond to text messages, but millennials will. Millennials will not talk to you on the phone and they don’t really care to look at email. So, if you want to collect more money, you have to pick the right engagement strategies for your patients.” He recommends having software that uses algorithms to predict engagement behaviors.

Physicians who utilize software and technology of this sort have an advantage in collections. “I think physician practices are in a very unique and enviable position where they can predict pretty closely what the patient should owe, and I think that conversation should happen either at the time of service or before service,” Felipe says.

Having the conversation

When a balance is outstanding, Felipe advises that physicians should not be the ones to raise this issue directly with patients. “This is a relationship that doesn’t need to be strained over financial dialogue,” he says. He gives the example of how most dental practices work. After your oral examination, the dentist comes in to tell you what services you will need, and the billing staff member talks to you about the money.

He recommends having a financial counselor of some form on staff — this could be your billing person, a care coordinator, or another front office employee. This person can direct the patient to philanthropic organizations and resource documents such as those already prepared by the Centers for Medicare and Medicaid Services.

“You don’t have to recreate the wheel with resources,” says Gloriann Sordo, J.D., a principal at AdviCare, a company in Lakeland, Florida, that handles clinical denials for hospitals. She also encourages physicians, or their billing staff, to ask insurers what resources they have for patients. “I believe the payers should be doing more in trying to help patients understand what their responsibility is.”

Additionally, this person can help patients review and understand their insurer’s explanation of benefits, says Sordo. “Patients assume it’s their physician’s office that is responsible for their balance, rather than the insurer,” she says.

Sordo emphasizes the importance of helping patients understand the role the insurer plays in their care, since they may deem something not medically necessary. “It’s important to help patients understand it is not an arbitrary decision your physician’s office is making on what to charge you.”

Other strategies

Sometimes the simplest steps can ensure the most efficient collections. Phelps urges physicians to make sure their front desk and billing staffs are collecting basic but crucial information. “Make sure you have a copy of their card. Get the ABCs down and run patient eligibility,” Phelps says. “Ask for the money up front.”

Phelps also recommends preparing ahead for each day by running all patients’ eligibility and benefits the night before. “Doing that work the night before makes your check-in process go more smoothly and gives you the opportunity to accurately calculate what their cost share would be once they’ve done their visit.”

Phelps says, “At the end of the day I tend to believe that people want to pay their part and they want to have the opportunity to do so. But sometimes they need education.”