Timely patient payments are a cornerstone of a financially sound healthcare practice. With increasing patient responsibility due to high-deductible health plans and insurance coverage changes, your organization is more reliant than ever on collecting directly from patients.
However, less than one-third of consumers pay their medical bills right away. Would shifting patient collections to the beginning of the care journey improve revenue? Or would it add unnecessary friction and damage your reputation?
Unfortunately, there are no easy solutions when it comes to the complex collection process in medical billing. Collecting too late can cause cash flow delays and lead to mounting accounts receivable.
On the other hand, collecting too early can frustrate your patients. Timing is essential to effective patient collections in healthcare. Here’s what you need to know.
Delaying the collection process in medical billing is a recipe for disaster. The more time that passes between the date of the appointment and the payment request, the lower the odds that you will recover what the patient owes.
Eventually, aged receivables can get lost in the complexities of your revenue cycle. The result is unrealized cash flow due to overlooked patient collections.
On the other hand, moving patient collections in healthcare to the front of the patient journey can backfire. Patients may not fully understand how much they will owe when they schedule an appointment, which can lead to confusion and cancellations.
Patient collections need to be a low-pressure process. However, you must also be direct and transparent so that patients understand what their obligations are.
On average, healthcare providers send 3.3 billing statements before receiving payment, and medical practices can only expect to collect 50–70% of the balance after a patient visit. The likelihood of collecting decreases as medical bills age in accounts receivable. During the first 90 days, healthcare practices have a 90% chance of collecting outstanding patient balances. After 90 days, this drops to 50%, and by 180 days, the chance falls to 20%. If outstanding balances remain unpaid for over a year, the chance of collection approaches 0%.
What can be done?
To prevent medical bills from going to collections, it’s crucial to secure patient payments as early as possible—preferably upfront or at the time of service. One effective strategy is to use a cost estimation tool to provide patients with accurate pricing before treatment, which helps ensure patient responsibility is clear from the start.
Implementing payment policies that require copays, coinsurance, and high-deductible payments at check-in or time of service can significantly improve collection rates. Offering flexible payment options, such as credit card payments, online payments, and payment plans, can also encourage timely payments and reduce the need for follow-ups.
The key to successful patient collections lies in transparency and convenience. No one likes surprise bills, especially if they have already paid a copay or deductible. Here are some tips to determine the right time to initiate patient collections:
Eliminate the shock of unexpected patient collections efforts by providing everyone with personalized estimates of what they can expect to pay out of pocket. This builds trust and reduces the chance of frustration down the road.
Cost estimates need to account for everything, including deductibles and copays. While your estimates may not always be perfect, accurate estimates empower patients to prepare for payment. They will appreciate the clarity, especially if they are scheduling multiple appointments.
Whenever possible, perform patient collections at the time of service or even during pre-visit registration. Patients are more likely to pay when the service is fresh in their minds, especially if your team is providing a great in-office experience.
When booking elective or scheduled procedures, consider offering payment plans to remove friction from patient collections. Allowing people to spread out their payments over several weeks or months can alleviate a lot of stress while ensuring patients can access the services they need.
Offering flexible payment options like installment plans can reduce the burden on loyal patients. You can also offer flexible terms to incentivize new patients to find a provider within your organization. However, be wary of individuals who hop from provider to provider to avoid paying their medical bills.
You should also offer multiple payment options and methods. For instance, allowing patients to pay in-office, online, or via a secure portal can help reduce delays and promote stronger cash flow.
Healthcare practices can benefit from adopting practice management software and revenue cycle management (RCM) solutions to streamline their payment process. These tools can automate payment collection, reducing the workload on office staff and improving overall collection rates. Features like patient portals and automated reminders (e.g., text message or phone calls) encourage patients to make payments promptly, enhancing the overall patient experience.
Additionally, using EHR systems that integrate with payment systems can help ensure accurate patient information and support efficient billing processes. Automation not only reduces administrative burdens but also helps maintain financial responsibility and keeps your practice's profitability intact.
Solutions like Rivet’s Patient Pricing tool enhance the estimation process by using real-time insurance and historical billing to generate detailed out-of-pocket estimates before appointments. You can give patients a clear cost breakdown up front and avoid friction during the collections process.
Download our patient pricing ebook to learn more about how you can create a strategic pricing strategy that strengthens your revenue cycle.
Getting the timing right is an important step toward smoother patient collections. However, that’s only one important part of the process. You also need to focus on:
“Bait and switch” experiences make the care journey inconsistent with patient expectations. Put yourself in the shoes of a patient who believes that they only have a $30 deductible only to find out that they owe hundreds of dollars after receiving treatment.
From the moment a patient schedules an appointment, let them know what they will owe and when payment is due. You should also convey what payment options are available. Reinforce the expectations you set via confirmation emails and interactions with the front desk at check-in.
Patient collections don't have to take place at the time service is provided. However, you should work quickly to obtain any payments that are not covered by insurance. Use automated systems to send text, email, or phone reminders that are friendly and informative. Include payment links and clear next steps to reduce friction in the patient journey.
Make sure that all of your team members are trained to answer basic billing questions. You don’t want patients to get bounced around if they have a question about their bill during scheduling or check-in. Getting answers quickly can help build trust and promote transparency.
Clear communication with patients about their financial responsibility is critical for ensuring timely payments. Practices should provide patients with transparent pricing information and a breakdown of their expected medical bills during the check-in process. Additionally, patient portals that allow patients to view and pay their bills online can reduce the burden on your office staff and improve patient satisfaction.
By offering multiple payment options and clear instructions on how to settle outstanding balances, healthcare providers can improve collection rates and ensure that patients are aware of their financial responsibility well before their medical bills become overdue.
Securing patient payments at the right time is critical to maintaining the financial health of any healthcare practice. Providers who collect payments upfront or at the time of service can reduce their accounts receivable and minimize the risk of bad debt. By focusing on early payment collection and offering flexible payment methods, healthcare providers can improve cash flow, ensure smoother operations, and reduce the number of outstanding balances.
At Rivet, we offer healthcare providers the tools they need to manage their revenue cycle more effectively. Our solutions help streamline payment collection, improve pricing transparency, and ensure timely payments from patients.
Knowing the right time to collect patient payments impacts your bottom line and patient relationships. Investing in the right cost estimation tools and collecting during high-engagement moments can help strengthen cash flow and reduce the risk of non-payment.
Patient Pricing, Rivet Health’s patient cost estimate software, can help you promote billing transparency and remove friction from the customer journey.
Our platform has built-in compliance tools to help you collect from patients in accordance with federal regulations. Rivet Health also offers revenue diagnostics tools, payer performance software, and denial management software.
Schedule a demo with Rivet Health today, and let us optimize your entire revenue cycle.
Patient payments should ideally be collected upfront or at the time of service to avoid delays in receiving reimbursement and minimize the risk of accounts receivable going to collections.
Healthcare providers can improve the payment process by using practice management software that offers automation, implementing payment plans, and offering multiple payment options such as credit card or online payments.
Collecting payments upfront helps ensure that providers are paid promptly, improving cash flow and reducing the number of outstanding balances in accounts receivable.
Technology such as EHR systems, RCM software, and patient portals can automate payment collection, remind patients to make timely payments, and streamline the overall billing process.
Early payment collection helps healthcare providers maintain their financial health, reduce the likelihood of denials, and avoid medical bills going to collections, ultimately boosting practice revenue.
