Challenges Collecting Patient Responsibility, and Some Solutions

With the popularity of high deductible health insurance plans spiking, medical practices are seeing increased difficulty collecting payments from their patients.  Patients are confused over their owed amounts, and this leads them to delay payment on bills.  Even when they agree on the amount they owe, many patients simply cannot afford deductible amounts that can quickly rise into the thousands of dollars.  Some patients have access to credit instruments to satisfy their obligations, but many do not.  This issue is reaching a critical level for many hospitals, doctor’s offices and other healthcare practices.

Over the past decade, the number of individuals enrolled in high-deductible health plans (HDHPs) has increased from 4% to nearly 25%, according to a recent study from the Henry J. Kaiser Family Foundation.  As a result, they report that deductible amounts for employer offered health plans have increased 67% in just the last five-years.  These trends are likely to continue as the current Administration pushes for more consumerism in the healthcare sector.

Further complicating matters is that patients find the billing process difficult to understand. Many patients do not pay the first bill they receive from a hospital or medical practice, under the assumption that the amount can, and often does, change.  The Consumer Financial Protection Bureau reported that “nearly 20% of consumers have unpaid healthcare bills due to the unfamiliar and confusing healthcare payment process”.

Even when the patient is ready to pay, many simply cannot afford the bill.  According to a study by Availity, physicians reported that only 56% of patients were able to pay the full amount requested during point of service collection efforts. The amount was even lower at hospitals, with only 34% able to pay at time of care.  A big reason for this is more consumers are maxed out on their credit limits.  With more Americans falling into the ranks of the under-banked, this problem will continue to be fester.

Fortunately there are a number of best practices to follow to improve patient collections and increase cash flow at your medical practice.  Proper communication with the patient at time of service is key to improving collections.  Patient estimation tools can help the front office staff provide good information to improve the chance of collecting.  A number of good tools are available from Practice Management and Electronic Health Records systems, but only 26% of physician practices report utilizing these, according to Availity.  Having a number of different ways for a patient to make a payment is also critical to improving collections.  A report by InstaMed states that 85% of patient payments were made via credit card, and payments on mobile devices have risen fast to 11% of all patient payments.

Offering patients a credit product or payment plan option can be another strong strategy to improve payments.  A number of credit card products exist that focus on payment of medical expenses.  Many of these do require the medical practice to take a discount on the patient responsibility, but a good percentage of something is always more than 100% of nothing.  Many practices also offer their patients the ability to pay larger bills through a monthly payment plan.  Extending payment terms for 6 to 24 months can really assist a patient in covering their bills.  While this can put additional work on the practice, it can make a big difference to realized cash flow over time.  Lastly, many practices outsource their patient billing and collection to third party firms that specialize in this area.  While there is a cost to this service, these groups take on significant workload from the practice and can meaningfully increase collections.

Are you concerned about issues with collecting patient responsibility?  Provider Web Capital can help.  We offer patient finance solutions and collections services that can give you more control over your cash flows and increase the profitability of your business. Visit us online at www.providerwebcapital.com or call us at (855) 860-9700 to connect with a Senior Business Advisor and learn more.