Failure to Collect Upfront Payments May Put Your Practice at Risk

Is Revenue Walking Out Your Door?

Does your front desk sometimes need to be encouraged to collect copays, deductibles, and overdue balances at the time of service? If the answer is yes, you may want to share these facts:

  • Patient reimbursement comprises 30% of total revenue, putting it on par with a large commercial payer in many organizations.
  • Fewer than 40% of Americans can pay a surprise $1,000 bill with savings.
  • The average single deductible for an employee insurance plan is $1,644.
  • 18% of workers in single plans have an out-of-pocket maximum of at least $6,000.
  • It is four times more costly to pursue debt collections than receive payment from a payer.
  • The chance of collecting payment drops an average of 62% after a patient leaves the office.

Collecting patient payments before appointments has evolved over the last decade, due to the shift in financial responsibility from payer to patient. Without a comprehensive strategy to collect amounts owed by patients, practices may be putting their future in peril.

Times have changed

Sometimes providers and staff express reluctance to collect money prior to service because it’s not the way they’ve worked in the past.

Before the shift from volume to value, most reimbursement was from insurance. Providers could be confident they would get paid. In the past, some providers even waived collecting copays and deductibles because the amounts were relatively small, and thresholds didn’t take long to meet. The rise in higher copays, deductibles, and coinsurance has changed that.

Not only does it take more time for patients to meet their deductibles, but payers are also more sensitive to the contractual obligation of patient payments. Waiving copays, coinsurance, and deductibles are considered kickbacks to the patient, and providers risk losing their contracts if caught. If a government payer such as Medicare discovers patients are not paying their share, providers risk fraud charges.

Another reason some providers use for not collecting before service is they think it is somehow illegal to do so, which is not the case. The Emergency Medical Treatment and Labor Act (EMTALA) stipulates that an emergency department cannot withhold service because of an inability to pay. Private practices, on the other hand, are in different circumstances. Unless an insurance contract specifically states otherwise, healthcare organizations can collect payment before services are rendered.

Best practice is collecting payments before service

Professional healthcare organizations, such as the MGMA, HFMA, and AHIMA, advocate collecting payment before service whenever possible. In addition to collecting copays and deductibles before the visit, best practice recommendations include:

  • Always verify insurance before the visit. Some practices verify when an appointment is made, three days before the appointment, and on the day of the appointment to confirm nothing has changed.
  • For large amounts, consider accepting a partial payment at the time of service.
  • Credit-card-on-file may be a good option for specialty practices that see patients on a regular schedule (such as allergy or psychotherapy).

Your front desk is the best place to set payment expectations

The top reason why payments are not made at the time of service is that the front desk didn’t ask. It is critical that staff understands why payment is necessary and have training around how to ask for payments. In addition, many organizations have financial counselors or members of staff authorized to have deeper conversations with patients to help them understand their payment options.

Your patients expect convenient payment options

The patient consumer mindset is well documented. Increasingly, patients expect to know how much a visit will cost and are sensitive to price. Another aspect of consumerism is the expectation that payment will be easy and feel like any other bill. Organizations that offer convenient payments options via a website, mobile phone app, or text position themselves to collect more revenue in less time than waiting for a check in the mail.

The consumer mindset also makes the conversation about cost a bit easier. People are accustomed to paying for goods and services upfront and payment at the time of service is the norm in most industries. In normal circumstances, why should it be any different in healthcare?

Collecting payments can be challenging – using the right partner for practice management software and billing makes it easy. Contact us today at (412) 424-2260 or visit www.vowhs.com to learn how we can help you optimize workflows, streamline claims, and maximize revenue.

Comments are closed.