Higher deductibles, larger copays, and more co-insurance mean patients are now responsible for a much bigger share of their care than they were even a few years ago (… if there is coverage at all).
If that’s not bad enough for patients, it creates a ripple effect challenge for practices.
What used to be collected from insurance is now sitting in your accounts receivable, waiting to be collected from your patients.
But without a clear, consistent process in place, those balances stay on the books far too long, or disappear entirely.
Today, collecting patient balances is no longer a small part of billing, but a significant part of your income.
Why Collections are Challenging
Most practices don’t struggle with collections because they don’t make an effort. They struggle because it’s uncomfortable, and they lack effective systems.
Nurse Practitioners were never trained to talk about money.
And… Isn’t it a contradiction to talk about money in a healthcare setting?
That’s certainly what most of us have learned; not because of what was said, but rather what wasn’t…
Money, the cost of healthcare, was never discussed!
The subtle message was that discussing money in a clinical setting is distasteful, even inappropriate.
As a result, financial conversations are often delayed, softened, or skipped altogether.
And on top of that, many practices operate without a clearly defined financial policy or one that’s not consistently enforced by everyone in the office.
One team member collects at check-in, another forgets, and another hesitates in enforcing the policy if the patient pushes back.
Over time, this inconsistency trains patients to think it’s okay not to pay when they come to an appointment.
So the clinic relies on billing after the visit. Not only does this create an additional expense for you, but by then, the patient has left, the urgency is gone, and collection becomes significantly more challenging.
The best time to collect payment is at the time of service!
Set Clear Expectations
If you want to improve your collections, start by setting clear expectations and repeating them often.
Your practice must have a written financial policy that clearly explains what patients are responsible for and when payment is expected.
This includes co-pays due at the time of service, as well as any applicable deductible or co-insurance amounts.
But having a financial policy isn’t enough.
Patients need to see it, hear it, and be reminded of it. That means including it in your intake paperwork, referencing it in appointment reminders, and making it easily accessible on your website.
When expectations are clear, collections become less confrontational and more routine.
The Best Opportunity: Upfront Collection
As mentioned earlier, the single most effective way to improve collections is to collect at the time of service, before the appointment.
This may require a shift in mindset… for clinic staff and patients.
While short-term credit in grocery stores, pharmacies, and other establishments was common years ago, the days of “put it on my tab” are long gone.
Instead of hoping to collect later, your team must collect payment upfront, just like in other industries.
For a clinic, it starts with verifying insurance and estimating the patient’s responsibility before the visit, whenever possible. Even a rough estimate is better than saying nothing at all.
Equally important is how the conversation is handled. A simple, confident approach works best: “Your estimated responsibility today is $75.”
Patients take their cues from you and your staff. When you communicate insecurity, patients pick up on it.
But when you approach payment as standard and expected, most patients will handle it without hesitation.
While most financial conversations should happen at check-in, there are times when they need to happen during the visit.
If additional services are recommended that may increase the patient’s cost, it’s important to communicate that clearly. Patients don’t like surprises, especially when it comes to their bills.
After-the-Fact Collections Still Matter
Even with strong upfront systems, there will always be balances that need to be collected after the visit.
And this is where consistency is critical.
Claims should be submitted promptly.
Patient statements must be clear and easy to understand, and be mailed as soon as patient balances become available.
Confusing bills are often ignored, as are bills mailed weeks or even months after the date of service.
Establish a regular billing cycle (30, 60, and 90-day) and stick to it.
Make it Easy for Patients to Pay
Offer multiple ways for patients to pay their balance.
Make both in-office and online options available so patients can easily manage their financial responsibilities.
Also, consider offering structured payment plans when appropriate, or connect with a third-party financing provider.
And here is the key… follow-up!
A simple reminder, whether by text, email, or phone, can significantly improve collection rates.
People are busy, and some do forget…
What to Do When Payments Don’t Come In
No matter what you do, though, some accounts will remain unpaid.
This is where knowing what to do next comes in handy.
Decide in advance what the cutoff is for moving accounts from internal follow-up to external collections. And when that point has been reached, turn the overdue account over to collections without delay.
Be sure to include in your financial policy that delinquent accounts are turned over to collections.
Initially, I didn’t want to involve a collection agency; I gave people all the benefit of the doubt…
However, after just a short time in practice, it became clear that working with a collection agency was the only way to recover payments from a few people.
Using a third-party collection agency can be effective, but it should be a last resort. The goal should be to collect while maintaining a healthy patient relationship, which likely will be lost once the account is turned over to the collection agency.
Use Technology to Your Advantage
Today’s tools can make a significant difference in your collection process.
Practice management systems can:
- automate eligibility checks
- estimate patient responsibility
- send reminders.
Establishing card-on-file policies can streamline payments, especially for ongoing care.
Equally important are your reports.
Track metrics like:
- Days in accounts receivable
- Collection rates
- Total patient balances, etc.
to help you identify where you stand, if your process is effective, or if it’s breaking down.
The idea is: what gets measured gets improved.
Train Your Team
Lastly, train your staff to normalize the conversation.
One of the most overlooked aspects of collections is training.
You and your team need more than just a script; you need confidence.
Speaking with confidence (instead of an apologetic tone) comes from practice, consistency, and a clear understanding that collecting payment is part of delivering care in our current healthcare system.
Finally…
Patients are feeling the pressure of rising healthcare costs, and it’s important to acknowledge that. However, your practice cannot function without consistent cash flow.
The goal is to strike a balance, offering reasonable flexibility when appropriate while maintaining clear, consistent policies. And when you make exceptions, they should be intentional, not accidental.
Improving your collections doesn’t mean you have to use aggressive tactics or engage in uncomfortable conversations. However, it requires clear expectations, clear policies, and consistent processes.
When collections become a repeatable system, your cash flow stabilizes, your stress decreases, and your practice becomes more sustainable.
And that ultimately allows you to focus on what matters most, caring for your patients.
Is everyone in your office enforcing your financial policy? Do you collect payment at the time of service without exception?
Please share your knowledge and experiences with us… Share your input via a comment below.
By Johanna Hofmann, MBA, MAc., EAMP; regular contributor to the NPBusiness blog.
Excellent! Thank you.
You are quite welcome Julia!
Thank you, This will be very helpful with our office.
You are quite welcome Brenda!