When it comes to self-pay patients there are two kinds. There are patients that have healthcare plans with high deductibles and copays and then there are patients with no health insurance whatsoever. The latter will become less common due to the recent changes under the health reform law. The health reform law includes an individual mandate, requiring every American to have health coverage, with just a few exceptions. With this mandate comes a number of health plans with high deductibles and patients with health insurance that are not familiar with how health plans work. High deductible plus patients that don't understand payment obligations equals an increase in bad debt for your practice.
Collecting from self-pay patients can be also be costly for a medical practice since it typically takes more time and hassle. Not only do statistics show that 81% of self-pay net revenues go unrecovered but that self-payers default at a rate of 30% or more. Therefore it can cost twice as much to collect from a patient as it does from a payer.
But don't let these statistics scare you. There are a number of ways you can solve the self-pay patient problems. Here are a few we came up with. If your practice has a solution that you'd like to share please do so in the comments section.
1. Payment Policy
This may seem like a simple concept but you would be surprised at the number of practices that simply do not see the value of a payment policy. A formal, written payment policy ensures that each patient fully understand their obligations for the care provided to them. To develop a payment policy there are 4 main areas to consider:
- copayments
- referrals
- responsibility to pay
- past balances
How will you handle each of these areas at your practice? Will your practice see a new patient that doesn't pay the copay upon arrival? Do you want your staff to collect the copayment before the visit or after? (words of wisdom, do it before the visit) Also consider how you are going to educate your patients about their responsibility to pay. One way to educate patients is on the telephone during the appointment scheduling but you can also remind them at check-in.
Once your policy is complete, post it on your website and make it available in a brochure at your office as well. To avoid any miscommunication on your practices payment policy, consider having your patients sign a financial policy agreement.
2. Offer Online Patient Bill Paying
According to a 2011 survey of patients, 70% of patients are interested in making payments online. Let that sink in. If you do not offer an online bill pay option, you aren't just ignoring what your patients are asking for but you are also hurting your revenue cycle. It is likely that your patient portal gives your patients the ability to pay online but if not you may need to research other technology vendors to give your patients the option to pay online. Your patient portal would also be good for posting your payment policy to patients as mentioned earlier.
3. Verify Insurance Eligibility and Benefits in Advance of the Patient Visit
Always collect insurance and demographic information before the appointment. Whether on the phone, online, or during the visit, collecting this information is a necessity. New and returning patients should bring their insurance card to every visit. The front desk staff is responsible for checking the patients insurance information to make sure it is up to date. Most practice management systems and clearinghouses can verify patient eligibility. If you are struggling with checking patient eligibility you may want to research other practice management options. A 100% pre-visit eligibility verification is attainable and should be a goal for all medical office managers.
4. Invest in Your Front Office Staff
Don't underestimate the importance of your front office staff. The front office staff is the beginning of your patients' experience. Having a friendly, customer service approach will not only improve your patients' experience but it will also make them feel more comfortable talking about their financial responsibility. There are a few things your front office staff can do to help improve the patient pay at your medical practice.
For example, the front office staff should not ask whether the patient would like to pay now but instead ask "How would you like to pay your balance today?". If the patient questions their balance, the front office staff should be willing to print or fax a copy of the statement and explain the statement to the patient.
Reviewing this information together and clearing up any questions will help the patient understand their financial responsibility. Explore incentives and recognition opportunities for the front staff at your practice to encourage them to meet goals for collecting money from patients whether it be past due balances and/or copayments. Asking for money from patients doesn't need to be a challenge. The front office staff should be well trained and prepared to handle this responsibility.
