5 Strategies to Help Providers Collect Outstanding Balances
5 Strategies to Help Providers Collect Outstanding Balances
Among the largest problems for medical practices are bad debt and collections. At the same time, high-deductible insurance plans are on the rise, so more of what you’re collecting is coming directly from patients. A McKinsey study found that 74% of patients who are insured are willing and able to pay out-of-pocket medical expenses of up to $1,000 per year. So why aren’t they paying?
Confusion about bills, insurance misunderstandings and a lack of cash on hand are all potential reasons — but the key to collecting more outstanding balances is to implement tools that create more transparency and automation. Consider these five planning strategies to help you collect more outstanding balances and improve cash flow.
- Let people pay using their preferred technologies
Most of your patients have a smartphone within reach, and a large number of them are willing to use it to make payments. Of millennials, for example, 94% are likely to use mobile payment options, and 65% of baby boomers are likely to take advantage of this form of payment.
Simplified payment tools allow you to grow your practice and increase revenue by using the tools that your patients already know and enjoy. For example, you can send an email or text message about paying a balance as they stand in your lobby. If the patient can’t pay the entire balance, he/she has the option to set up a personalized payment plan.
Many of your patients are already accustomed to “card on file” technology. They are using it for takeout food services, grocery services and online retailers — and they are willing to pay medical practices with this method as well. This approach allows you to automatically collect payments in accordance with your patient agreement after insurance payments are made. The long lag time associated with mailing paper statements and receiving checks is eliminated with this payment option.
- Empower patients with personalized financing options
Many Americans struggle to pay their medical bills. In fact, about a third of Americans have some form of medical debt, and half of these people default on their obligations. At the same time, almost half of Americans are skipping doctor visits due to worries about cost. Unsure of how they will afford care, they put off medical care indefinitely or until the need becomes urgent.
Patient financing allows medical practices to meet patients where they’re at financially. If they can’t pay the entire balance of the bill, there are financing options available. Payments can be split into smaller sums and spread out over a longer period of time. Flexible and personalized financing allows you to open your doors to more people who need care but worry they can’t afford it.
When looking at flexible financing options, consider technology that simplifies the process for patients and improves collection rates. For example, when payment options are sent via text message or email, ensure that the patients can set up a payment plan directly from the payment screen.
A program that enables you to sell receivables and get paid upfront is also helpful for cash flow. This option allows you to get rid of late-payment and bad-debt risk, and ultimately provide healthcare staff support by freeing up valuable staff resources previously spent on collections.
- Work to create greater patient engagement
Patient engagement is more critical than ever as patients transform into “customers.” With a rising number of high-deductible insurance plans, people are responsible for a larger portion of their medical bills, and as a result, they expect more. However, clinicians report that only 34% of their patients are “highly engaged.”
The right technology solutions and patient engagement strategies help close the patient engagement gap and allow you to connect in greater depth. For example, let’s say that a patient visits your practice and doesn’t pay at the time of service. In the past, you may have sent a paper billing statement and waited for payment. Let’s say the patient is having financial difficulties, and although they want to pay the bill, they simply can’t afford to pay the balance and so ignores it.
In contrast, if you have a patient engagement system, you can send out strategically timed emails throughout the patient journey. For example, you could send the patient a reminder via email when a payment is overdue and offer flexible payment options that can be set up online or through a mobile device. The patient can set up an easy, personalized payment plan, and you can speed up collection efforts and start getting paid faster. If you have the ability to sell receivables, you can get the entire amount upfront.
- Offer greater transparency with accurate estimates
Many patients are confused about medical bills, and this leads to delays in getting paid. After visiting your office, the patient may receive the bill and have questions. This results in payment delays and can negatively affect cash flow. But what are some of the other reasons people aren’t paying their bills? A few common reasons include:
- The bill is higher than expected. Many health care providers do not share estimates prior to a procedure or an office visit. Additionally, patients are often sent multiple bills for services related to the same visit, such as a bill for blood work from the lab and a bill for the office visit. If the bills are larger than expected, the patient might not pay it.
- There were billing errors. Despite your best efforts, there may occasionally be errors on medical bills. Whether it’s a coding error or a mistake regarding what the insurance company will pay, the patient receives a bill higher than expected. If patients don’t understand a bill, they might set it aside or simply not pay it.
- The patient doesn’t have enough funds to pay the bill. Americans are juggling debt from a variety of sources, such as credit cards, student loans and more. If a medical bill is unexpected and the balance is higher than expected, finding the money to pay that bill can be difficult.
- The patient wasn’t offered payment options. Many patients need payment options, and if they aren’t offered those options upfront, the bill may go unpaid. In today’s world of high-deductible insurance plans, offering an affordable and personalized payment plan is more important than ever.
The right patient estimation tool allows you to create more transparency and give people an accurate, upfront estimate. This estimate provides greater visibility so the patient is not surprised when receiving a bill.
Patients who have difficulty paying their bills can talk about flexible payment plans upfront and get that payment plan set up immediately. As a result, you get balances paid faster and get rid of unnecessary late payments and bad debt.
- Take advantage of technology
Improving collection efforts doesn’t require a single tool but rather the whole toolbox to ensure that patient engagement is achieved and your bottom line is improved. An advanced solution helps you improve collections at every critical point in the patient’s journey.
For example, you can speak with the patient prior to the visit, provide him/her with an estimate and discuss payment options. When the patient visits the office, you can confirm those details and allow the patient to pay upfront from their mobile device. If that patient can’t pay upfront, you can highlight payment options, and the patient can set up those options directly on his/her mobile device.
Patients who haven’t paid their bills after leaving the office are addressed by a carefully timed communication strategy. For example, once the bill is overdue, you can send a helpful reminder via email reminding patients of payment options and allowing them to set up a program directly online or from their mobile device. The key is to set up simplified payment options at every step in the journey so you can capture more payments, remove confusion and enhance the customer experience.
Moving into the future with better cash flow
Practices want to help patients get access to the care they need most, but at the same time, you need to run a profitable business. Using the right technology empowers you to meet patients where they are.
If they prefer mobile bills, you can send them mobile bills. If they need a payment plan, you can send them the tools they need to set that up. As a result, the patient will have a more seamless experience and be more likely to return to your practice and to refer family and friends. The result is a practice that thrives in the future with faster payment cycles and a growing patient base.