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.
Chiropractic Financing: A Win-Win For Providers and Patients
Many patients believe that a single visit to the chiropractor will “cure” their pain; however, chiropractors know that a comprehensive treatment takes multiple visits. Depending on the insurance provider, these ongoing visits might not be covered. As a result, the patient is left figuring out how to pay for care.
This situation comes at a time when out-of-pocket health care expenses are on the rise. People are paying higher insurance premiums, higher deductibles, and larger co-payments than in the past. Americans spend twice as much for health care today compared with what they spent in the 1980s. The average American spends $5,000 annually on health care now, compared with only $2,500 per year in 1984, when adjusted for inflation.
Patients without chiropractic insurance coverage might be hesitant to step through your door, instead opting for treatments such as invasive surgery or prescription medications that only mask pain. Reaching patients with quality chiropractic care, however, is important, with three in four chiropractic patients (77%) describing their care as “very effective.” So how can you open your doors to more people? Chiropractic financing is a powerful option that empowers patients with access to personalized payment options and helps your business grow.
Why Offer Financing?
Many chiropractic practices have financial procedures in place to minimize risk of bad debt and collection issues. For example, some require upfront payments for all services. The average cost for a chiropractic visit is about $100 to $150 per session, which can feel overwhelming to some patients. And even if a patient does have insurance, that insurance might not pay for the full course of treatment required to remedy the patient’s problem.
For example, Medicare currently reimburses for only a single chiropractic service, which is manual manipulation of spine-related conditions. It won’t pay for the “evaluation and management” services required to establish a treatment plan for patients.
Patient financing helps patients manage these expenses and fit them into a budget where they send monthly payments. Chiropractic practices can help patients get access to the care they need without waiting to get paid. As a result, the payment cycle is increased, risk for bad debt is decreased, and you can improve the patient experience.
Benefits to Your Practice
Patient financing allows you to better connect with patients by providing them with the funding solutions required to get access to care. They can quickly set up payment options, select a personalized payment plan, and get instant access to care. Benefits to your practice include:
Opening your doors to more patients. Chiropractic financing allows you to open your chiropractic practice to more patients who need care but don’t think they can afford it. Inclusive payment options allow you to extend financing to 100% of patients, regardless of their credit score.
Getting rid of bad debt. With out-of-pocket expenses on the rise, bad debt has steadily increased. Nearly 80% of health care entities reported bad debt growth between 6% to 20% since 2008. During a time when $5,000 and $10,000 deductibles are more common, paying medical bills is getting harder for patients. This type of financing allows you to address payment concerns upfront, offer financing, and decrease bad debt.
Getting paid faster. Patients who can pay balances and set up financing on mobile devices are happier and have a better experience. Mobile payments also get you paid faster and speed up the revenue cycle.
Increasing cash flow. Patient financing allows you the option of getting paid upfront on receivables, which can increase cash flow. As a result, you can spend less time on collection efforts and more efficiently grow your practice.
Patient financing allows you to increase your practice’s financial health and serve more patients who need financial aid. In addition to helping your business thrive, it assists patients with getting access to the care they need most without the worry of how to pay.
Benefits to Patients
Many patients want access to chiropractic care but aren’t sure how they will afford the treatment they need to get better or may be worried about their credit score. Chiropractic care financing bridges that gap and provides a variety of benefits to patients, including:
Fewer worries about “cutting treatments short.” Insurance plans might have a pre-set number of allowed chiropractic visits annually. If patients need more visits, they may be tempted to cut their treatment plan short, which could adversely affect their health. Chiropractic financing allows patients to continue with treatment because they know what each of their monthly payments will be.
Easily fit payments into the patient’s budget. A one-size-fits-all type of financing plan doesn’t work because every patient is different. Paying $50 a month might be doable for one patient but pose a financial hardship for another. Financing plans that are customizable are a benefit for patients and empower them to pick a payment that fits their budget.
Access to more treatment options. Patients might limit their treatment options based on what they can afford. Chiropractic patient financing allows them to consider treatment options that felt “too expensive” in the past. As a result, patients can put their health first, without the worry of managing costs.
Increased patient satisfaction. Personalized payment options allow patients to feel more known and understood by your practice. As a result, patients will be more loyal to your practice and come back for additional treatments.
Fuel referrals and growth. Happier customers refer more of their family and friends to your business. Customers acquired through referrals have a 37% higher retention rate and an 18% overall lower churn rate compared with customers acquired by other means.
What to Look For in a Financing Program
Patient financing is a powerful tool that promotes practice growth, but not all programs are created equal. Consider the following details when selecting a program for your practice:
Upfront payment on receivables. The option of getting paid upfront on receivables can help smooth out cash flow challenges. Some financing partners will allow you to sell patient receivables and get paid right away.
100% approval rates. Some patients have credit challenges and need financing options that won’t exclude them because of credit history. A financing program that enables you to accept 100% of patients allows you to offer your services to more patients.
Customizable branded portal. Patients want the ability to pay their bills online. About 56% of all bills are paid through a biller, bank, or third-party website. Tools such as mobile bill pay options and customizable branded payment portals allow your patients to pay their financing plans 24/7.
Ongoing communication tools. Some patients will opt into financing programs at the time of services, but others won’t make that decision right away. Keep the lines of communication open with automated tools that promote financing options and provide relevant information at critical points in the patient journey.
Educating Your Patients About Financing Options
Once you have the right financing program in place, it’s important to educate your patients about that service in order to make a greater impact. Consider the following:
Before the visit. Place details about financing options where customers are most likely to see them, such as on your website. During the first phone call, when a staff member is collecting insurance details and other information from the patient, make it standard to talk about flexible patient financing options.
During the visit. Use technology that provides patients with accurate, real-time details about their exact cost of care. At this time, you can tell patients about personalized financing options that are available and provide the required details for setup.
After the visit. Patients who don’t initially opt in to financing might need it later. For example, a patient might change their insurance provider and no longer have chiropractic coverage. Provide patients with ongoing, helpful details through text message, email, and other communication channels to improve the experience.
Moving Forward With Greater Success
Chiropractic care is an important treatment for many people, but some are skipping sessions because of worries about cost. Providing the resources that people need most allows you to serve more people who will benefit from care.
Selecting a program that is personalized, flexible, and supported by technology that enhances the experience allows you to create more meaningful and lasting patient relationships. These happier patients will organically spread the word about your practice, and you will experience greater cash flow and growth in the future.