Changing Your Patient Policies & Procedures to Get Paid Faster

For the past two decades, there’s been a steady shift in financial responsibilities from healthcare plans to patients. It started with the Medicare Prescription Drug Improvement and Modernization Act in 2003 and continued with The Affordable Care Act in 2010, which saw annual deductibles steadily rise from an average of $500-$1,000 up to several thousand dollars today. While it used to be that a patient would come in for a visit, pay a $10 or $20 copay, and a claim would be filed with their insurance for the rest, now it’s more likely that patients are enrolled in high-deductible plans and responsible for the visits full cost.

The need to charge individual patients—rather than health plans—for a higher threshold of expense per year is putting practices in a tough spot when it comes to collecting their revenue in a timely manner. This is especially true for medical offices that have been in business for years and have not adapted to this shift in financial responsibility.

When a patient isn’t prepared to pay while still physically in the office, the practice will need to send them a bill later. Unfortunately, billing after the visit significantly reduces the chances of payment and increases the likelihood that the amount will go to a collection agent for the practice to be paid. Not only does that put negative burdens on both the practice and the patient, but it also creates cash flow issues for the practice as well as a reduced return considering the collection agents' usual one-third fee to collect.

Step 1: Establishing a Well Thought-Out Financial Policy

Setting up a patient financial policy that spells out the financial expectations for service each visit is the bedrock to maintaining your financial viability long-term. There are numerous elements in an effective financial policy and too many to detail here. Once the practice has made all of its decisions on how they want to handle these elements an experienced healthcare attorney should review to be sure you are in compliance with all Federal, State, and Local laws.  Finally, have each patient review and sign off that they have received the policy and keep that signed version stored in your Electronic Health Record software for potential later enforcement.

Step 2: Research the Patient’s Deductible Status

The good news is that there are proactive measures practices can take to help staff and patients be prepared for payment at the time of service. The first is to find out how much a patient has paid toward their deductible so far, which is important at the beginning of the year when it’s likely they’ll need to pay the full cost of their visit. To find out where a patient is in fulfilling their deductible, many insurance carrier’s websites allow providers to check the patient’s account to get a quick read on the unfulfilled deductible.

Step 3: Determine How Much Money Will Be Collected From the Patient

The next part is figuring out how much to collect from the patient, which can be complex and dependent on your practice’s specialty. A primary care fee-for-service practice with an established patient and a level 3 E&M code whose insurance carrier typically has an allowed amount of $100 should charge the patient $100 (assuming they haven’t met their deductible); The “allowed amounts” are readily available to a practice through review of your participating insurance carrier contract and fee schedule.

Specialists that might be performing multiple procedures or tests in one visit have more complex calculations that won’t be possible as a patient is waiting to check out. Instead, that practice can determine ahead of time their typical average reimbursement with participating insurance companies' new patients and established patients and create an average patient responsibility upfront. This structure will create a smaller balance due by the patient or potentially a refund due the patient once the insurance claim settles. This may seem like a lot of extra work but is justified based on the very real possibility you won’t get paid once the patient walks out the door. 

Step 4: Establish a Trusting Relationship With Your Patients

The front office staff are some of the most important employees in the practice: they greet patients, collect payments, and schedule follow-up appointments. It is essential they provide a warm, smiling welcome and establish a trusting rapport with the patient, and can kindly and firmly request payment before or after the visit. Their helpful and knowledgeable demeanor can facilitate what’s essentially a behavior shift in long-standing patients that routinely only paid $10 or $20 each time they saw a doctor and are now being asked to pay significantly larger sums.  

Step 5: Clarify Your Patient Communications

The final tool in making sure a patient is prepared to pay is constant, clear communication.  A multitude of opportunities exist between appointment scheduling and appointment check-in to remind patients of your office’s policy on payment at the time of service, and which forms of payment your office accepts. Take advantage of all of them. Reminders can—and should—be included in:

• Patient portal messaging

• Calls to make appointments

• Appointment reminder and confirmation texts

• Signage at check-in and check-out

By setting expectations with patients and then implementing clear strategies to collect appropriate fees at the time of service, practices can avoid the costly route of chasing payments rightfully due to them at the time of service.

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