It’s one thing to sell products and services to customers, and it’s another thing to get paid for them. Would you agree?
And nowhere is this more apparent than in the medical office.
Not only do you fight for reimbursement from some insurance carriers, but at times you also have to battle patients to pay their share.
I’m sure you’ve heard some patients say: “I’ll pay next time, I don’t have any money on me, or I’ll put a check in the mail.”
Now mind you, most people don’t go to the grocery store, grab a few items, get in line at the check-out and say to the teller “I’ll pay you next time!” Those days are long gone!
At times, some patients even expect you to foot the bill altogether or to see them on “credit.”
But you can’t do that; not if you want to stay in business.
And here is the predicament…
Patients come to you because they need your help:
- Dave’s blood pressure has been creeping up since he’s lost his job.
- Jackie suffers from insomnia. She just bought a house and is worried about making the payments.
- Emily developed an ulcer. She’s been through a nasty divorce and wonders how to support her family.
I know these examples are rather simplistic.
However, I think you’d agree that most of us worry about money at one time or another. And at times, some of us go through financial hardship.
And even though money is not listed as a unique stressor on the Holmes- Rahe Stress Scale, most life events listed will have a definite impact on finances.
Now having said that, let’s get back to you and your practice.
Your primary objective, of course, is to help people, not to add to their stress, right?
But this can get a bit tricky when you have to ask for money knowing there is little or none!
At times, your front desk staff may have a hard time asking for money. Some may find it difficult to enforce your financial policies, or there may not be a clear-cut financial policy they can draw from.
Some employees may end up extending credit to patients when they should not. And over time, this can lead to problems and loss of revenue for your office.
So let’s take a look at why you’re losing money in the first place.
The Front Desk
Patients today pay an ever-increasing portion of their healthcare, even if they have “good insurance.” Across the board, premiums and patient responsibility are on the rise.
And, it’s unlikely increases will stop anytime soon.
So it’s no surprise your office is left to collect more and more money from patients.
Not only do insurance companies require you to collect patient responsibility, but you must also do it if you want to stay in practice.
Since patient responsibility today makes up a significant portion of your overall revenue, you can’t afford to ignore it.
Here are the most common payments you must collect from your patients:
- Medicare and other deductibles at the beginning of the year; depending on the insurance company and plan, this may be a significant amount.
- Deductibles under high deductible plans; in essence, patients are cash pay until the deductible has been met.
- Co-insurance that must be paid for each visit. Depending on the carrier and plan, this could add up to lots of money over time.
- Co-pays to be paid every time a patient comes to see you, another provider, or a specialist. Again, with some insurance plans co-pays may be as high as $50 or $75… and it adds up.
- Lastly, any service not covered by the insurance plan.
How To Collect
Here’s a quote by Benjamin Franklin: “An ounce of prevention is worth a pound of cure.”
Adapted to your practice it means, do whatever it takes to collect as much as you can up front.
Unfortunately, this is not always possible in the medical office. Often, the person at the front desk doesn’t know ahead of time what the final charge will be.
If at all possible, collect up front, at the time of service, because it’s the easiest and the least complicated. The longer you wait, the more difficult it gets to collect your money, if you get it at all.
So here are a few ideas for you.
- Train your patients. Make it clear they understand payment is expected at the time of service, every time.
- Always collect payment before the appointment.
- When collecting payments don’t ask “Will you be paying this today?”, instead ask “How do you want to take care of this: cash, debit, or credit?” Offer your patients different options to pay their bill.
- If someone has difficulty keeping up with payments, refer them to a third party financing company to set up a payment plan. I suggest you do not extend credit yourself.
Someone Won’t Pay
The best-laid plans… don’t always work out.
So, what can you do when someone slipped through the cracks or just won’t pay an outstanding bill?
There are a few things you can do:
- Use an accounts receivables “Aging Report” to keep tabs on all unpaid balances.
- Have a billing system setup and ready to go.
- Start the billing process as soon as possible. If you want your money, don’t wait too long.
- Don’t send bills out forever. You may decide to send two or three statements, but not more. Remember that billing and sending statements is a courtesy on your part. If someone doesn’t respond or pay, move on to the next step,
- If all fails, turn over unpaid, overdue accounts to a collection agency… because some people won’t pay, regardless of what you do!
Patient responsibility is a significant portion of your overall revenue today.
Develop policies and procedures to ensure you collect all payments from patients. Train your staff so they’re comfortable collecting payments and will enforce your policies.
Lastly, if you have a patient who refuses to cooperate, don’t be afraid to take the necessary steps. Turn over the account to collections without delay.
If you’d like to learn more about this topic, check out our short program on “Maximizing Your Front Desk Collections.”
Let us know what you think, leave a comment below.
By Johanna Hofmann, MBA, Lac, a regular contributor to the NPBusiness blog.