Patient Deductibles And Balances: What Is Your Collection Plan?

As the calendar turns from December to January, many people celebrate the new year. However, in medicine, we see the new year as the start of the new deductibles for patients. Most patients start their new insurance year at the beginning of the calendar year. As the insurance world has changed over the last several years, one of the most significant effects has been the increasingly higher deductibles that patients now have as their responsibility. How you address this goes a long way in influencing the financial success of your practice.

There are different schools of thought on this. One approach is to treat patients with no regard for the deductible, submit your claim and wait for the insurance company to tell you the patient has not met the deductible and the practice should bill the patient. While this may feel like the path of least resistance, it can also cause significant financial hardship for the practice.

If you bill the insurance company the day you provide treatment, it will take two to four weeks to respond to your claim (assuming it was a clean claim). The insurance company will tell you to bill the patient and by the time the patient receives a bill, it is now more than a month since the office visit. It is quite common for patients not to pay their medical bills immediately and they are conditioned to say they need to check with their insurance company before paying. This goes on for weeks. In the meantime, you have to pay rent, utilities, payroll for employees, IT expenses and vendor bills.

Furthermore, the longer those bills go uncollected from patients, the less likely you will ever see that money. Once a bill gets to 90 days past due, the chance of collecting from patients becomes very low. 

Alternatively, collecting deductibles at the time of service will significantly help cash flow and keep your accounts receivables more manageable. Many physicians are uncomfortable asking for money at the time of service and some patients balk at this as well. However, patients are aware of their high deductibles and understand their responsibilities. They try to use antiquated patient/doctor financial arrangements to keep doctors from collecting at the time of service by stating that they need to see their explanation of benefits (EOB) or check with their insurance.

It is an old cliché but could these people go to the grocery store and tell the checkout person to “send me the bill”? Absolutely not. Why would physicians allow this kind of behavior for their very valuable services as well as hard costs such as supplies and durable medical equipment? 

The best way to handle this situation is to put a policy in place that your entire organization understands so there can be consistency throughout. Have a written policy that staff can hand to the patient stating that the practice expects patients to pay for their services at the date of service and that they are responsible for paying their unmet deductibles at the time of service. Make sure your front desk employees are aware of the policy and that they remain consistent with enforcing the policy. It is also important that your medical assistants understand the policy and can explain it to the patients. They will often be the ones questioned as to why the bill is a certain way. 

Besides deductibles, patient responsibilities for their portion of services have also increased. The percentage of the patient portion of services has steadily increased over the years with many insurance plans. As I discussed above, in many cases, it takes weeks to months for insurance companies to notify the practice of the patient responsibility. Then when patients receive this bill, they have many different responses including:

1. They will need to check with their insurance company before providing payment.
2. They request the bill go to them before they will pay.
3. They say their spouse pays the bills.
4. They didn’t bring a method of payment.

Of course, none of these scenarios ends with them paying their bill that is clearly their responsibility. Another wrinkle in these scenarios is that you are asking the lowest paid person in your organization (front desk) to ask people for money, which is terribly uncomfortable for most. 

How To Handle Patients Who Cannot Or Will Not Pay

There are different options available to practices to solve this problem.

1. You can have patients leave a credit card on file with signature, like a hotel, and the practice will charge any patient responsibility to the credit card if the patient does not pay the bill in a timely manner.
2. You can refuse to treat a patient who will not pay the bill. Your front desk employees can tell the patient they will be happy to reschedule the patient at a time when he or she can pay the balance.
3. You can provide options like CareCredit for patients who cannot afford to pay their bills.

There are also companies and technology available to practices to set up a kiosk at the front desk or in the waiting room. These kiosks will be where patients check in for their appointment. When the patient checks in, there will be a prompt telling patients they have a balance and asking for payment by credit card at the kiosk. It will also ask patients for their co-pays. Although this is new to medicine, the public accepts these kiosks, most often seen at airports. Patients are more likely to pay their bill when the kiosk asks them for the payment than when a human asks. 

Many believe that we collect patient balances at an average of 65 percent industry wide. Some early results of this new technology state that those collections are increasing to 75 to 90 percent depending on the practice.

Maintaining financial oversight is crucial to a healthy practice. The dynamics of patient-physician financial relationships have changed over the years. Insurance companies increasingly want financial dealings to occur between the patient and the physician. The more that happens, the more physicians must be prepared to meet the new paradigm. For the long-term success of your practice, start planning for this or you may find yourself looking for financial help.

If you are interested in propelling your practice into 2016 and beyond, join the Foot & Ankle Business Innovations Annual Event January 29-31 in Chicago. Visit www.FABI2016.com .