It’s the beginning of the year, and annual deductibles need to be paid. It’s no coincidence that it’s also the time of year some practices experience problems with their cash flow.
While it’s plenty challenging to collect copays and coinsurance throughout the year, it gets even more difficult when it comes to asking for deductibles.
And it’s no surprise.
Deductibles, copays, and coinsurance, patient responsibility, keep going up, across the board. Out of pocket costs are soaring, even for those with insurance. And many patients are faced with larger copays, higher coinsurance, and sky-high deductibles.
And you, unfortunately, get stuck in the middle! You know what financial stress can do to patients, but at the same time, you need to collect money from them.
Not only to stay in compliance with your insurance contracts but also to ensure the financial health of your practice. Because today, patient responsibility is a significant chunk of revenue for most practices.
And the average practice stands to lose thousands of dollars in revenue each year if they are not collecting copays, coinsurance, and deductibles.
As for patients, they may need to come in to see you, regardless of ability to pay. Fortunately, the majority of patients simply pay what they owe. A few are unaware of their financial obligation, while others feel that the deductible or the copay can wait…forever!
Some patients think you make enough money already, and hence they don’t feel the need to pay. And based on personal experience, some come in for the first visit of the year, without any intention to pay or come back.
The strategy is: move on to another office so the annual deductible can be avoided altogether, of course, at your expense.
So what’s the financial impact on your practice? After all, you still need to pay the rent, keep up with your mortgage, and pay every last one of your bills. But that’s tough to do when you don’t receive a good chunk of money owed to you.
Of course, that may not be a problem if you own a cash-based practice. But even there, you may run into issues with collecting payments. The “collecting money challenge” seems to be shared across all types of practices.
And to make things worse, all too often, providers and their staff feel uncomfortable “bugging” people about money, even though the money is rightfully theirs.
What can you do about it? While at first, it may seem your hands are tied, there are a few things you can put in place.
What To Do?
A robust financial policy that spells out your policies and expectations. When new patients initial and sign your financial policy, they should know what’s expected of them concerning their financial responsibility.
Enforce your financial policy. Spelling out financial expectations and responsibilities is not enough; you must be willing to back it up with actions. For example… a patient falls behind with copays and coinsurance. If your policy states that patient accounts must be brought current before someone can be seen in the office again, stick to it.
Staff trained and willing to uphold your policies. Make sure your team knows what’s expected of them and give them tools to make their jobs easier. Provide them with training and scripts they can use when dealing with patients who don’t want to pay. When making reminder calls, include a reminder of what payments are due at the time of service.
Educate patients about their obligations and responsibilities. It’s surprising, but the majority of people with health insurance understand little about how it works, about their benefits, and their financial responsibilities. Make sure your front desk staff can clear up any confusion for them.
Collect at the time of service. Train your patients to pay any outstanding balances at the time of service throughout the year. It ensures patients to stay current with payments and don’t fall behind. And your chances of collecting payment are higher when someone is in the office, compared to getting paid from someone receiving a bill four weeks after their appointment.
Offer a range of payment options. Make it easier for people to pay what they owe. Allow them to pay with credit and debit cards, or health savings accounts, in addition to accepting traditional payment methods.
When everything else fails… Be willing to discharge patients from your practice if they’re not willing to pay or play by your rules. And, don’t be afraid to work with a reputable collections agency to go after any money that is owed to you.
Collecting money to cover patient responsibility starts long before the first visit, and the bill comes due.
To successfully collect patient responsibility, set the right expectations, enforce them, and be consistent in your actions.
Once you do that, you will find that the payment collection process becomes much more manageable. And while some will feel put off, 99% of your patients will respect you and understand what you’re trying to do.
And, if you want to learn more about how to maximize your front desk collections, check out this program.
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By Johanna Hofmann, MBA, LAc; regular contributor to the NPBusiness blog