Medical Billing Blog

Use Better Collection Techniques To Increase Patient Payments

Posted by Barry Shatzman on Wed, Nov, 28, 2012 @ 12:11 PM

A Bird In The Hand resized 600It is said that “a bird in the hand is worth two in the bush,” and that is especially true when you’re talking about collecting payments from patients at the time of service.  According to the AMA, the average cost to physicians for collecting monies owed and processing claims is 10 – 14 percent of gross revenue, butthere are ways to be more efficient, reduce these costs, and collect payments faster.  The AMA website offers a Point-of-Care Pricing Toolkit to help you collect payment from patients before they walk out the door. 

Everyone involved in patient service, from the front office staff to billers and physicians, plays an essential role in maintaining healthy cash flow.  Everyone on staff should understand why it is important to collect at the time of service, and the ways it can decrease your cost of collecting balances while it also accelerates your revenue cycle.  After all, according to the AMA, almost half of the better-performing practices collect more than 90% of patient payments at the time of service.  This reduces patient statement fees, collection agency fees, and overall accounts receivable totals.

In order to effectively increase time of visit collections, it’s a good idea to institute a series of policies and methods, and to make sure that they are followed consistently.

  • Leave payment discussions solely to the office staff and designate the office manager as the individual responsible for authorizing payment arrangements.  Providers should escort each patient to the front desk so the patient knows where to make the payment, but should not discuss monies owed or collect fees personally. Instead, have the patients speak with the check out clerk or office manager.  Use a scripted approach when patients raise questions about fees, or attempt to negotiate payment plans.  For example, you can respond with a practiced line, such as, “Please discuss this matter with my front desk staff.  They are happy to assist you--and thank you for coming in today.” Then end with a smile or a handshake.  This approach will help distance you, as the provider from the sometimes-uncomfortable issue of non-payment, and help protect your image with patients as a healer, rather than as a collector.
  • Prepare your staff to request and obtain payment from the patient while they are still in the office.  Adequately train your staff on how to collect payments by using scripted language of typical collection discussions with patients.  “Your fee today is $$.  How would you like to pay for that--cash, check, or credit card?”  Patients with outstanding balances should be taken aside to arrange a payment plan prior to seeing the physician. 
  • Keep a “Promise of Payment” log for patients who do not pay at time of service that contains their name, phone number, amount owed, and the date that they have promised to send the payment.
  • Preprint brightly colored envelopes with your address, and hand them to patients with due dates printed on them.
  • Have collection policies posted within the reception area.

Have daily five-minute “huddles” to discuss the account status of scheduled patients.  Set clear guidelines for acceptable payment arrangements for each case, so staff will be prepared to handle negotiations when the patient is physically present.  Ultimately, you, as the provider make decisions concerning any special arrangements or circumstances granted, but maintain practice policies as much as possible. 

  • Estimate the patient’s financial responsibility using the eligibility verification software available today in order to determine the patient’s copay for same day collection. 

The market place is changing.  High deductible insurance plans, high unemployment, reduced fees and increased costs all contribute to the industry wide reduction in practice revenue, but if you make subtle adjustments to procedures, you can position your own practice to overcome these challenges and even thrive during these difficult times. 

As noted earlier, the AMA puts the average cost of billing and collection for a medical office at 10 – 14 percent of gross revenue.  By using some of the techniques above you can not only accelerate cash flow, but also reduce the amount it cost to collect payment.  Once these new methods become comfortable to you and your staff, you can further reduce the cost of billing and collecting by partnering with a third-party billing service like Medical Billing Resources.  A move like this will dramatically reduce both hard and soft expenses, thus lowering your overall cost of collections, and free up your staff to better serve those visiting the office.  If you’d like more information about how to better manage your revenue cycle, download our Billing Expense Worksheet, then give us a call so we can discuss the best ways to reduce your fees and improve cash flow.