Getting Your Financial Policy Into Shape (Printable Glossary)
There was a time when you didn’t have to give much thought to patient collections. Insurance reimbursements--that's what kept you up at night. But with patients now fronting 30%-50% of the financial responsibility for their healthcare (up from single-digit percentages back in the day), medical practices are making patient collections a priority.
Relying solely on the statement process and traditional payment methods to collect from patients can result in increasing accounts receivables, particularly in the 120-days-plus category. For a practice to succeed in getting its bloated receivables back into shape, it must start by reviewing existing collections policies and tools and evaluating what changes need to be made.
When’s the Last Time You Looked at Your Financial Policy?
The first place to start is your financial policy. Many practices have policies that were created shortly after the practice opened and have barely been reviewed since. The standard financial policy you've used for years may no longer be adequate.
So what are the critical elements in a financial policy that will serve as the foundation for your improved patient collections process? Here are few key elements to get you started:
- Use patient-friendly language and avoid the industry jargon that we are all so used to spouting. When you must use terms that patients may not be as familiar with, be sure to define them in easy to understand terms. Consider including a patient-friendly glossary of terms in your new patient packet and have it available to existing patients when they have questions about their statements or account balances. Don’t assuming that patients understand their responsibility.
Here's a short glossary of essential health insurance terms that you can print out, add your contact info at the bottom, and offer as a resource to your patients:
- Be clear in your expectations regarding payment of copays at the time of service and what the consequences of non-payment will be, for example, rescheduling the appointment at a later date, requiring a credit card to be kept on file, etc.
- For patients with insurance, remind them that they are ultimately responsible for payment of the services received and that they hold the contract with their insurance. In the event of a discrepancy with their insurance, they will be required to assist the practice in resolving any issues that are preventing payment for covered services.
- Provide a sample fee schedule for self-pay patients so that they can be prepared for what their responsibility may be. Most patients are willing to pay for the services provided, they just don’t like surprises when they open the mail and find a bill that is significantly higher than what they expected.
- Outline your policies on turning accounts over to collections, including whether or not a patient may be dismissed from the practice or whether appointments for non-emergency services will be postponed in the event of a delinquent account.
- Provide multiple payment methods. Today’s merchant services options provide multiple ways for patients to pay their balances. At a minimum, collecting payment at the time of service for copays and current balances is faster and easier than ever.
- Credit Card on File (CCoF) systems allow patients to present their credit card once and have it securely stored for future obligations. This has the added benefit of eliminating the need to have a conversation about money at every visit, especially if you have included a provision in your financial policy for charging the card on file when a balance is past due or a visit is applied to deductible or coinsurance. I am still amazed at how many practices I encounter that either don’t accept credit cards or discourage patients from using them because they don’t want to pay the merchant fee. The cost associated with collecting from patients after they leave the office without paying far outweighs any fees charged by your bank or credit card processing company.
- Payment plans are another tool that go hand-in-hand with a good credit card on file system. If a patient is unable to pay a balance in full, having the option to set up an installment plan that is automatically charged to their credit card when it is due will eliminate the “I forgot to send my check” excuses and will cut down on statement costs and phone calls each month. Keep in mind that if you extend payments more than three months you may fall under the Truth In Lending Act. It’s a good idea to brush up on requirements and include the necessary language in your financial policy if you’re likely to have patients who need to spread payments out over several months.
Patient Collections Boot Camp
Once you have shaped up your financial policy and beefed up your payment pathways to encourage patients to keep balances current, it is time to evaluate the rest of your patient collections process.
Join me in the upcoming webinar series we’re calling the Patient Collections Boot Camp.
This two-part webinar training will put you through the paces of shaping up your patient collections best practices and will provide the encouragement and tools you need to take your patient collections to the next level.