Communicating Your Patient’s Healthcare Billing Responsibility
The rise of high-deductible insurance plans and more expensive co-payments are leaving patients responsible for a larger amount of their healthcare bills. As a result, medical practices are collecting more of their revenue directly from patients. The challenge is that many of these patients struggle to pay their portion of medical expenses.
About one-fourth of U.S. adults report that they or a household member have had a challenge with paying medical bills in the past year. About half of this group (12 percent) say the bills had a major impact on their family.
Payment hardship is difficult for patients and medical practices. When patients struggle to pay their bills, a medical practice’s receivables grow and cash flow is negatively affected. Large medical balances can also adversely affect the patient relationship, especially if patients don’t fully understand their financial responsibility. Implementing new strategies around communication and providing resources to pay for patient care, such as payment plans, can help reduce patient frustration and improve the healthcare experience.
Creating a System With Maximum Transparency
Many patients leave after a doctor’s visit without fully understanding their financial responsibility. For example, perhaps the patient has a $20 co-payment, but they need a procedure that requires them to pay beyond that co-payment, sharing a portion of the cost. When a bill arrives for the outstanding balance, the patient is confused, frustrated and potentially angry.
Feelings like this are common, especially with the rise of high-deductible insurance plans that require patients to pay large amounts of money before the insurance coverage pays for costs. This potential confusion may result in unpaid bills, upset patients, and slowed receivables. In some cases, people simply don’t have the funds to pay the bills and aren’t sure how to proceed.
Building transparency around medical billing improves patient contact and empowers patients to figure out how they will pay for service upfront. It also eliminates any bad feelings about feeling “blindsided” by an unexpected medical bill. Automated patient estimation at your practice can help you to build this transparency with patients.
Communicating Costs Early and Frequently
Building more transparency in medical costs requires rethinking communication. In the past, you might have collected a co-payment and then dealt with any additional costs after the visit. Once the insurance carrier paid their portion of a bill, the balance was billed to the patient. A medical billing process that includes greater transparency involves talking with patients during the visit about the total cost of their visit and their responsibility for payment.
Most practices know that building greater transparency into the patient experience is important, yet few have successfully done so. For example, one study found that nine in ten healthcare providers say that helping patients understand what is covered by their insurance versus what are out-of-pocket expenses is very important. Estimation software can help you calculate your patient’s out-of-pocket expense accurately.
In addition, 96 percent of practices, which make up nearly all medical providers, said they believe that it’s important to provide patients with an easy way to understand and pay for bills. Yet the reality is that only 45 percent of patients report that providers don’t help them understand what they owe out of pocket versus what their insurance provider will pay.
Implementing tools that help patients understand costs during their visit helps to open lines of communication early. For example, if a patient expects to pay $20 for their visit but has an unexpected procedure and now owes $150, you can answer any billing questions at that time. You can explain, for example, that the patient hasn’t met their insurance deductible and therefore must foot the bill for the procedure. In the past, the patient would have received the bill and needed to call and ask questions, which could have significantly slowed down the payment process.
Opening the lines of communication early also provides an opportunity to discuss patient billing options. If a patient can’t pay the total amount due upfront, this is the perfect time to present flexible payment options to improve their experience and make paying the bill less stressful.
Offering Simplified Payment Options
Many patients can’t pay their entire balance upfront and need resources and payment options. One survey found that nearly all patients (94 percent) said they want doctors to offer an easy way to understand and pay medical bills. A medical practice can leverage innovative technology options to not only communicate the amount owed but also provide details about flexible patient billing options. When doing this, remember that not all patient estimation software is created the same, so research your options prior.
Working with the right technology partner is key because not all partners are created equal.
Communicating the amount owed early, and upfront, and then following up with easy-to-use and flexible payment options can quickly increase cash flow to your business. One study found that 74 percent of patients who reported a satisfactory billing experience paid their healthcare bills in full. In contrast, only 33 percent of those dissatisfied with healthcare billing paid their bills. Understanding the patient’s needs, preferences and expectations for experience can help create stronger and more meaningful relationships. Select a partner that offers 100% approval rates on financing, which allows all patients access to the financing options that they need.
Providing a Variety of Payment Options and Methods
Whether a patient needs a payment plan or takes care of their billing statement in full, it’s important to give them plenty of payment options. Expectations around payments have quickly changed in the past decade. The evolution of faster and more convenient payment options, such as mobile payment, are growing in popularity. Estimates show that roughly 36 percent of smartphone users make a mobile payment at least once every six months. People expect the same easy experiences that they receive with other service providers, such as retailers, at their physician’s office.
Mobile payment options, for example, allow patients to quickly pay from their smartphone. The practice can send a text or email message that allows patients to decide whether to pay on-the-spot or enroll in a facility-approved payment plan. Mobile billing software such as this provides a convenient option for patients to pay their medical expenses.
Additionally, having convenient point-of-sale options also helps to improve the patient experience and adds to a seamless communication experience. Card-on-file technology, for example, allows you to safely store and use your patient’s payment account to pay for balances after insurance payments have been received.
Communicating Using The Tools That Patients Prefer
The ways that patients communicate have drastically changed over the past couple of decades. Snail mail had been replaced by email and text messages, and phone calls have been replaced by text reminders. Patients expect you to communicate in the ways that are most convenient to their lifestyle. And when practices successfully do this, especially regarding payment details, they can increase response rates and cash flow. For example, one study found that only 10 percent of patients prefer to receive communication through patient portals. In contrast, twice as many (19.6 percent) prefer to receive information via secure text when in-person and phone calls are not an option.
Most patients don’t answer calls from numbers they don’t know, with 64 percent of adults admitting they ignore numbers they don’t recognize. In the past, leaving a voicemail was an efficient way to get a patient to call back, but today’s reality is that 30 percent of voicemails go unheard for at least three days, and 20 percent of Americans don’t ever check their voicemail. When considering communicating about payment details, a text message is fast, effective and in many cases preferred way to communicate with patients. Consider the following:
- 95 percent of text messages are read within 3 minutes of being received.
- 98 percent of text messages are read.
- 90 seconds is the average response time to a text message.
Communicating your patients’ healthcare billing responsibilities using the technologies that your patients already know and love is an effective way to get that information in their hands and answer any billing questions early in the revenue cycle.
Leaving room for customization is also important when considering communication strategies. For example, some patients might still prefer a paper bill, while others strictly want electronic options. Giving patients the flexibility to receive account details in the way that they prefer, whether it be a text message, paper bill or phone call, can help to further customize the patient experience.
The Future For Practices
Practices are savvy to the fact that more of their revenue is coming from the pocketbooks of patients. As a result, new strategies are needed to effectively communicate what patients owe and how they can easily pay practices through tools such as customized payment plans. The missing link for many practices is that communication the medical billing process needs to happen much earlier than in the past.
Practices that successfully bridge the communication gap regarding patient financial responsibility, however, have an opportunity to build stronger patient bonds, be a resource to help them pay for care, and build a stronger business in the future.