This is an excerpt from the ebook “The Patient Costs Playbook: When High Deductibles Turn Patients Into Payers”. Click here to read the complete ebook.
According to research by the Medical Group Management Association (MGMA), healthcare providers send an average of 3.3 billing statements before receiving payment. Once bad debts are turned over to collections, providers only recover an average of $15.77 for every $100 owed.
The challenge is finding ways to help patients make good on their balance before it goes to collections. You can start by addressing common barriers that make it harder for patients to pay—and harder for you to collect.
As high deductibles increase the burden on patients as payers, it’s up to providers to help them succeed. On top of worrying about how to afford care, many patients are also dealing with the stress and uncertainty of serious illness. Here are mutually beneficial solutions to help them meet their financial obligations for care:
According to one survey, more than 60% of patients said their medical bills were confusing or very confusing. In yet another patient survey, nearly half reported not understanding medical costs, which increased negative feelings about their provider and decreased collection rates.
In addition to helping patients understand their insurance coverage and out-of-pocket expenses before treatment, take steps to make your billing statements easy to read and free of jargon whenever possible. Itemize all charges and provide totals for both the insurance company’s portion and the patient’s responsibility.
Give every patient options for how they prefer to receive billing statements. Some may still prefer paper, but many will appreciate the convenience of digital statements or reminders sent by email, text, or through a patient portal. Encourage patients to opt for electronic methods because they increase collection rates. Allow them to pay online or over the phone.
If you have a patient portal, make sure patients know about it. When surveyed about how to increase engagement in their own care, 57% of patients said they’d like online access to their medical information, but 64% said they don’t use online portals because they didn’t know one was available (35%) or their doctor hadn’t talked to them about it (31%).
In addition to accepting multiple forms of payment (cash, check, credit card), give patients options for payment plans. Experts advise that standard payment plans only result in a moderate increase in provider revenue, but when combined with prompt payment discounts of 10–20%, they incentivize patients to pay. Additionally, allowing patients to set their own payment terms, such as the amount they pay each month (within reason), can improve both their ability and willingness to pay.
Do you know how many patients leave their provider’s office without paying for services rendered that day? According to MGMA, it’s 30%. That matters because once a patient leaves, your likelihood of collecting payment drops an average of 62%.
The most important step you can take toward increasing patient reimbursement rates is to collect copays and at least a portion of non-covered amounts at the time of service—which are usually around 20% of the total bill. To do so effectively, you need an accurate way for front-office staff to calculate amounts owed and collect payment so you don’t lose time and money issuing refunds.
To learn more about improving your process for collecting upfront payments, download our ebook, “The Patient Costs Playbook: When High Deductibles Turn Patients Into Payers.”