You work hard at building meaningful relationships with patients and families and are committed to providing the best care possible. As a result, it isn’t always easy to broach the topic of payment, especially when the bills pile up. Fortunately, there are some simple action steps that can help your team more effectively ask for and collect payments from families who have fallen behind.
It’s especially important to be prepared for these conversations as the cost burden for healthcare continues to shift from insurance companies to patients themselves, often in the form of high deductible health plans (HDHP). According to the CDC’s National Center for Health Statistics, the percentage of Americans enrolled in an HDHP without a health savings account increased from 10.6 percent in 2007 to 24.5 percent in 2017 among adults aged 18–64 with employment-based coverage. Even as insurance coverage shifts and the healthcare landscape evolves, the goal is to continue to provide the quality care your families deserve while generating the income that keeps your business alive and well.
1. Educate patients up front.
Have a financial policy, make it readily available to families, and stick to it. Introduce your families to the policy well before any issues arise. At a minimum, the policy should include language designating the parent or guardian as the person ultimately responsible for payment, even if insurance is notified, as well as a section addressing when payment is expected and the steps taken when payment is past due. Note payment plan options in the policy if a bill becomes past due. For new patients, administrative staff should proactively point out the most salient points and ask if there are any questions. A copy of the policy, signed by the parent or guardian, should be kept on file and reviewed and updated annually. Another best practice: Post notices in your exam rooms about your practice’s payment policy that address commonly misunderstood points.
For example, the notice could remind families that a well visit combined with a sick visit may require a co-pay. See two examples of excellent financial policies, one from Kids Plus Pediatrics and another from Tampalpais Pediatrics. Note that posting your financial policy on your WWW site like these practices do might dissuade patients who don’t intend to pay their bills from visiting your practice.
2. Educate and provide resources for administrative staff.
You have a policy in place – now you need to abide by it. And your team needs to be able to take action when the time comes. This means equipping them with the skills and resources that will make them successful. “Come up with a policy and stick to it,” according to Jenn Austin and Tracy Harter, senior billers and team leads at PedsOne, a PCC partner and company specialized in pediatric billing. “Don’t undermine your staff and don’t give things away.” A script is often helpful when asking for payment, with finely-tuned language key. For example, simply coaching staff to say: “How will you pay your bill today?” instead of, “Are you able to pay your past-due bill today?” can be effective. A phone call can be a helpful follow-up to a bill received in the mail. Make sure the staff member always offers to collect payment right on that phone call. Offering the option to pay online can yield results, particularly for millennial generation-parents or younger who are used to conducting business via the internet. One 2017 study found that more than half of all Americans are now paying bills online. Having an online payment tool that offers a true family balance can expedite the collections process.
Another useful strategy: Make sure staff have time to do homework on patient eligibility before they arrive. Austin and Harter recommend reviewing the schedule for well exam visits every week and verifying eligibility through the EHR. You may be able to head off problems if you know a family’s insurance doesn’t cover certain vaccinations or offers a high deductible, for example. Providing an estimate of the dollar amount the patient will be responsible for upfront – so they can budget appropriately - could help avoid costly future problems. One strategy is to cross-reference the allowed amount per the payer contract with the patient’s deductible to determine what they’ll be responsible for.
3. Offer clear, well-structured payment plan options.
According to Austin and Harter, the most important component to any payment plan is that it’s realistic for the family. The monthly dollar figure you decide on has to be sustainable. That being said, they recommend aiming to have the bill paid off within six months, if possible. Be clear about the consequences if the patient doesn’t adhere to the plan. For PedsOne, two months of no payment triggers a “broken budget plan statement,” which requires a meeting to reconstitute a payment plan or the bill goes to collections. Offering to set up an autopay option for payment plans can yield results. PedsOne also keeps a credit card on file for some of their clients’ patients. If a bill isn’t paid within 14 days, the family receives notice that the credit card will be charged. Also keeping Health Savings Account information on file is useful, but Austin and Harter recommend going with a credit card first as the HSA may be low on funds.
4. Use collections as a last resort.
If a bill is past due, and other options have not yielded results, it may be time to engage collections. Austin and Harter recommend writing off as bad debt any amount of $50 or less as opposed to engaging any further with the patient family. PedsOne recommends the following process before sending a bill to collections: A first bill, followed by a 30-day past due bill and phone call, and then a 60-day past due bill and phone call. At 90 days past due, they recommend sending a last chance notice requesting a phone call within 10 days to set up a payment plan. If you reach the end of this process and the bill still hasn’t been paid, it’s time to engage a collections service. This generally requires a letter of termination that states the bill has been sent for collection review.
Austin and Harter say PedsOne painstakingly reviews records to make sure all of these steps have been taken before they send a bill to collections. Legally, the patient cannot be denied care if s/he has an emergency within 30 days of termination, but well visits can be suspended. Called “patient abandonment,” specific legal requirements may vary by state. All PCC clients have the ability to flag past due accounts in the scheduling system for their clients so that new appointments cannot be set until the payment issue is resolved.
5. Keep an eye on the big picture – don’t let past-due bills accumulate.
Austin and Harter recommend reviewing past due bills regularly, at least once every six months. Run an accounts receivable list and prioritize bills that are the most delinquent. Follow up with those patients, and track progress on collecting payment over time. The goal is to not let any bills languish for more than 120 days – by that point, there should be some progress or the bill should have gone to collections. Set some metrics for your practice to aim for – whether it’s zero bills more than 120 days past due, or 100 percent co-pay collection, and help train administrative staff to achieve those goals.
6. Engage a billing specialist.
For some practices, contracting with a billing specialist like PedsOne could be well-worth the investment. For one, it takes the burden off of your in-house team. Would your administrative staff members be able to tackle other important priorities if they didn’t have to track and pursue unpaid claims? Weigh those priorities that have been sitting on the back burner against the time spent on billing. It’s possible that the cost of hiring a specialist would be less than the lost administrative time. A specialist can also focus on the details of your practice’s unpaid claims to make sure nothing falls through the cracks. If your staff is pulled in multiple directions, it may be more difficult to maintain this level of attention. Whether you contract with a specialist or manage your own collections, make sure you have the policies, procedures, and staff training in place to ensure a smooth billing and payment process. Quality patient care and a strong revenue stream go hand-in-hand.