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Developing Best Practices for Patient Payment Plans

With the current “perfect storm” of high-deductible health plans, skyrocketing healthcare costs, and the uncertainty caused by Covid-19, patients need solutions that will help them manage their medical bills. Sending multiple statements over the course of many weeks or months to patients who are unable to pay their bills is a waste of resources, time, and energy. Instead, savvy, patient-centric physician practices are increasingly offering patient payment plans that are easy to use, flexible, and provide a wide range of options that fit a wide range of lifestyles and budgets of the modern patient.

Creating a Strategy for Ease of Payment

Good patient care doesn’t stop when the patient leaves the exam room. Instead, it extends throughout the patient’s entire experience with your practice, from making their appointment to paying their bill. And while some physician practices might work to establish informal payment arrangements with patients by request, allowing patients to pay their bills in small installments over time, these plans often don’t take advantage of specialized tools to help patients and practices optimize those arrangements. Additionally, the plans are often only arranged after patients have received multiple statements and have put off making payments for months.

Helping patients set up a convenient, formalized payment plan should not be a last-minute, emergency measure or the last thing your practice does before sending an account to collections. A better, smarter strategy is to offer payment plans that put more control into the patient’s and provider’s hands right away. Instead of wasting weeks or months sending statements to patients who are unable to pay their bills, practices can enroll patients in payment plans immediately. Options might include offering payment plans right on the patient statement or even during a pre-service insurance authorization conversation. This proactive approach puts patients at ease while generating immediate and reliable revenue for your practice.

Payment Plan Best Practices

When choosing a payment plan tool and putting those plans into place, there are several things that practices should be sure to do, look for, and include:

Be proactive

Don’t force patients to wonder whether a payment plan is available. Tell them about their options right away, often, and in many formats. Bring it up in conversation during scheduling or at check-in; offer the plan beginning with the patient’s cost estimate; post it on your website; and include information about plans and how to sign up on paper and electronic billing statements. Email or text patients to let them know that they can enroll in a plan now. A proactive approach is especially important with patients who are at higher risk for not being able to pay their bill.

Give the patient options

Allow patients to choose monthly payment dates that work with their schedules and budgets. Patients should also have flexibility in setting the payment plan terms. Allow them to choose from several minimum amounts due and options for how many months they’ll agree to make those payments. Common term lengths include 6-, 12-, 24-, and 36-month plans, depending on the size of the patient balance and the agreed-upon monthly payment amount.

Accept modern payment methods

Meet patients where they are. Most patients are now accustomed to online and electronic payment options that they’ve used with retailers and others. Offer options to pay online, with mobile devices, and even more modern payment options like Apple Pay, Android Pay, PayPal, Venmo, Google Pay, and Amazon Pay. Not only are these options more convenient for patients, they also let you store their payment information for automated, monthly payment processing.

Have documented rules

Documentation allows for broad adoption and easy setup for your team and the patient. It also protects your medical practice against missed payments, defaults, and abuse. For instance, build rules around required upfront payments, minimum payments, and term lengths. Also, be sure to internally track data such as total payment amounts; risk tolerance with certain payment populations; historical payment outcomes for similar procedures; and payments you are likely to write off.

Communicate effectively

Just as different patients prefer different payment methods, they also often prefer different communication methods. Ask patients how they want to be reached and oblige, whether it’s through paper statements, emails, or text messages. Reach out to
patients the way in which they prefer.

Include helpful features

Avoid missed payments by keeping patient credit cards on file and automatically notifying patients about information like credit card expiration dates and asking them to add their new card to their account. Patients will appreciate the heads up, and your practice won’t miss out on the revenue that it’s expecting. In addition, make enrolling in payment plans as easy and frictionless as possible by offering plans that don’t accrue interest or carry fees and allowing patients to participate in the plans without requiring a credit check. Finally, allow for automatic payments that the patient can schedule themselves.

The Bottom Line

Payment plans are good for patients and practices. Research shows that patients frequently struggle with medical bills of all kinds, and data trends show those struggles getting worse, not better. Ultimately, the implementation of payment plans can benefit any practice by improving collections and overall patient satisfaction.