Nine tips for collecting patient balances

September 12, 2020
Lisa Eramo, MA
Lisa Eramo, MA

Lisa Eramo, MA, is a contributing author for Medical Economics.

Volume 97, Issue 13

Collecting copayments and coinsurance is challenging because of the COVID-19 pandemic.

Practices have been creative during COVID-19 to ensure safe patient access: Telephone visits. Curbside immunizations. Drive-up virus testing. Even checking patients in for their in-office visits while they wait in the car. However, each of these scenarios poses one significant challenge: Collecting copayments and coinsurance.

“With COVID-19, you’ve got to find ways to meaningfully engage the patient,” says Denny Flint, chief commercial officer at Millennia, a tech-enabled patient engagement company specializing in the recovery of end-to-end patient financial obligation. “That’s the key to a successful collections strategy.”

Experts provide nine tips to help practices successfully collect patient balances during COVID-19 and beyond:

1 Educate patients about the cost of virtual services

This includes having a conversation at the time of booking about how much each service will cost, says Flint.

Although some payers may waive cost-sharing for virtual services during the pandemic, those waivers will likely expire at some point, making it critical for patients to understand their financial responsibilities. For example, patients may not understand why they need to pay for a telephone appointment or why a telehealth visit costs the same as an in-person one. Explain that these services require provider time and expertise, which is why payers consider them compensable.

2 Decide whether the practice will require upfront collections

Many practices became lax during COVID-19 because they simply wanted to maintain or rebuild patient volumes. Now it’s time to revisit their strategy, says Reed Tinsley, CPA, health care consultant in Houston, Texas. “A medical practice is a business,” says Tinsley. “You need to have cash coming in to pay expenses.”

Cheryl Mongillo, practice manager in Wilmington, Delaware, says her family medicine practice has been less aggressive with upfront collections during COVID-19 because payer policies regarding patient financial responsibility have changed so frequently. “It’s very complicated,” she says. “Depending on who the carrier is, it’s a different rule — even for the same payer.”

She spends an hour each day monitoring payer websites for changes. She also taps into resources through a listserv managed by the Professional Association of Health Care Office Managers (PAHCOM), an organization that includes thousands of medical office managers, practice administrators and physicians managing their own private practices.

“Not collecting these amounts upfront has increased our accounts receivable, but we’re willing to work with that for a little while,” she says, adding that federal funds continue to help. Her practice received $63,000 through the first round of Medicare advanced payments. They also received financial assistance through the Paycheck Protection Program.

Mongillo’s staff continue ask for an upfront copayment either in person or ahead of time when confirming appointments via phone, but they don’t insist on it. “We don’t want to alienate patients because this is a stressful time for them,” she says.

One challenge with upfront collections is that the clinical circumstances of the visit are frequently unknown before the encounter, says Flint. This makes it difficult to know exactly how much patients will owe, he adds.

For example, a patient may come in for a simple follow-up appointment. However, during the appointment, the physician might perform a minor procedure that’s separately billable (e.g., a biopsy or lesion removal). Another example is a level three office visit that turns into a level four because it requires more complex medical decision making.

With that said, practices should strive to avoid over-collecting from patients so they don’t end up owing money they’ve already spent on salaries and supplies, says Flint. He says to calculate 90% of the Medicare fee schedule amount (which is typically the lowest fee schedule among federal and commercial payers), and then apply the patient’s insurance. “You’re going to underbill, but at least you’re getting the patient invested in their care upfront,” he adds.

Also print an aging of accounts receivable (credit balances only) report on a monthly basis so the practice can refund patients in a timely manner and according to payer requirements, says Tinsley. Medicare, for example, requires providers to refund patients within 30 days of the payment date, he adds.

3 Make it easy for patients to pay

“If a small practice wants to survive, it can’t just send a statement and hope patients pay,” says Flint, adding that practices must tailor patient financial engagement strategies to fit the age and tech-savviness of the demographics they serve.

“Portal-driven online bill-pay and mobile payment methods may attract the millennials and Gen-Xers who are comfortable with DIY technology,” says Flint. “However, baby boomers generally prefer the human touch delivered by a U.S.-based call center that gently informs and educates them about why they owe what they owe. COVID-19 has taught us our goal is a seamless, personalized billing experience where one size does not fit all.”

Mongillo’s practice sends a text message to patients as soon as their account includes a patient responsibility. Patients simply click through the link to a secure site where they can make the payment. She says this technology has increased their collections by 30% in the last year and a half.

Obtaining patient consent to receive these messages is easy because Delaware law doesn’t require providers to ask patients whether they want to opt in to receiving these messages. It only requires them to let patients opt out. Mongillo says many patients don’t opt out because they want to receive appointment reminders and payment receipts via text as well.

4 Offer a payment plan

Mongillo doesn’t want patients to forgo or delay care because they can’t afford it. “Most of our patients who are on these plans are people we’ve seen for 20 or 25 years who have fallen on some rough times,” she says.

However, remember that the longer it takes patients to pay off their debt, the less value that money has to the clinic because of overhead, salaries and other expenses, says Sergio Quiej, Texas-based independent revenue cycle consultant who recommends three or four monthly installments.

5 Continue post-visit collections calls … but with sensitivity

Flint suggests calling patients after the same invoice remains unpaid after two billing cycles to make sure they received it, answer any questions they have and try to connect in some way.

To minimize questions, be sure to send a clear and concise invoice. This includes the service date, location, provider, description of the service rendered, amount insurance paid (including primary and any secondary insurance), and the amount the patient owes, says Flint. Differentiate between copayment and co-insurance amounts, he adds.

However, don’t just call and ask for money, says Quiej. Inquire about the patient’s family and job — even if it takes a few extra minutes. “The way you treat the patient directly impacts how they’ll react to the debt,” he says.

Tinsley agrees. “What I tell all of my clients is don’t change your process,” he says. “Send out your statements, make your collection calls, and forge ahead.” Temporarily relaxing your processes can have a negative effect in the long-run because patients may come to expect and even demand that leniency indefinitely, he adds.

6 Employ enough billers or consider outsourcing

Many practices may have laid off staff when patient volumes decreased. However, once volumes resume, they need to make sure they have enough staff for timely billing and collections, says Flint. In some cases, it may make more sense to outsource revenue cycle management (RCM) to a company that is a branded extension of the practice and staff. Working with an external vendor also helps practices avoid internal staffing challenges as patient volumes continue to ebb and flow during a potential second wave of the virus.

Flint provides these tips for negotiating a favorable contract with an RCM vendor:

  • Require the vendor to charge only a percentage of what they collect.
  • Ask the vendor to waive its implementation fee.
  • Demand an easy-out contract. “If the vendor doesn’t perform within six months, you should be able to walk away without cause or penalty,” he adds.

7 Keep a credit card on file

This enables practices to simply charge the card once a patient responsibility is assigned, says Flint. However, there are caveats. “If your practice intends to accept card payment as well as store, process, and transmit cardholder data, you need to host your data securely with a Payment Card Industry (PCI)-compliant hosting provider that ensures the data is encrypted, password protected and compliant with PCI Data Security Standards,” he adds. These standards cover technical aspects of handling and managing cardholder data.

8 Consider settlement rights

If the practice makes a reasonable effort to collect from a patient who is experiencing financial hardship (e.g., job loss due to COVID-19), providers may be able to offer a discount (e.g., settle for 70% of the amount owed) without violating Stark Law, says Tinsley. “But remember that just because even if someone doesn’t have a job, they could still have money,” he adds. “There are a lot of people out there with big savings accounts.”

9 Provide training to front-office staff

“It’s uncomfortable for people to ask patients for money,” says Tinsley. Provide training on how to communicate effectively to increase the likelihood of collections while maintaining positive patient relationships, he adds.

Think of COVID-19 as an opportunity to improve patient collections and the patient financial experience, says Quiej. “This is an opportunity to create and develop relationships with patients — to learn how to approach each patient,” he adds.

download issueDownload Issue : Medical Economics September 2020