5 Qualities to Look for in a Surgery Center Third-Party Patient Financing Program
The following article was written by Rob Morris, vice president of marketing and new business development at CareCredit, a part of GE Capital.
Many patients today are facing higher out-of-pocket costs, including increased deductibles and co-pays that can make moving forward with surgical procedures a challenge. To help patients get the care that they need, every ASC should review its financial policy and ensure that it provides a variety of payment options that patients can take advantage of — including patient financing. With a comprehensive financial policy, an ASC can provide patients with a payment solution that fits both their budget and lifestyle, improve the ASC's cash flow, and reduce A/R.
Most ASCs have a financial policy that requests payment at the time of treatment by cash, check, or major cards such as VISA or MasterCard. However, studies show that most Americans have only $300 of available credit on consumer cards, and find it difficult to write a check for more than $500 out of their monthly budget. With facility fees ranging from $400 to $7,000 and the popularity of elective procedures in ASCs growing, it's not unusual for patients to have large out-of-pocket costs that put a real strain on finances.
In today's economic environment, patients appreciate and have even come to expect some level of assistance from healthcare providers when it comes to managing the cost of care. In a study conducted by Inquire Market Research, 32 percent of patients stated that without an obvious payment solution, they would ask the provider to function in the role of a financing company by billing them.1 Unfortunately, when a facility takes on the responsibility of billing, they also incur the cost and risk associated with it as well — including late payments, bad debt and uncollected accounts. A better solution that has proven more effective for both health care professionals and their patients is to add a financing program through a third-party financing provider.
Manageable monthly payments
Over the last 25 years, healthcare professionals in nearly every field, including dentistry, ophthalmology, cosmetic surgery, podiatry, bariatrics, and even veterinary medicine, have increasingly used third-party patient financing programs to help patients pay for out-of-pocket costs and treatment not covered by insurance. In fact, many patients prefer using this payment option instead of their consumer credit cards because the availability of promotional offers.
Choosing a program for your practice
With a third-party financing program, you can offer patients both deferred interest and low-interest payment options without assuming the risk and expense of billing and collections. Patients complete a short credit application, which is submitted to the third-party financing company. The patient quickly receives a credit decision and credit line. If approved, patients can schedule their procedure immediately and pay over time with a manageable monthly payment.
The cost of offering this option comes out to about the same as giving a courtesy discount of 5 percent for cash payments. In today's economic environment, most patients don't have the cash on hand to take advantage of a courtesy discount, so having a monthly payment option can motivate patients to schedule their procedure or move forward with care. One of the biggest benefits is that once approved, the financial arrangement is between the patient and the financing company. The center receives immediate payment via an electronic transfer in about two business days, improving cash flow and reducing A/R.
When you offer additional payment options through a third-party financing company, you must be able to trust them with your patient relationships. In other words, the finance company must treat your patients as well as you do. Here are a few things to look for when selecting your third-party financing partner.
1. Experience. Experience does count. Find out how long the company has been in business and how many healthcare providers offer the program. Also ask how many patients have used the program to get care.
2. Flexibility. Does the company offer a wide range of payment options? Can patients apply at home and in your office? Can they apply over the phone and over the internet?
3. Customer service. Can patients get help 24/7? Does the company provide your team and your patients with high-quality information and service?
4. Efficiency. Can your patients complete the application in just a few minutes? Can you receive a credit decision within seconds?
5. Value. Does the company provide marketing and presentation materials? Do they offer other value-add services to help your ASC become more financially healthy?
Adding the program to your financial policy
Your patient financing program should be included as part of your financial policy and presented as an option along with cash, check, and Visa and MasterCard. Your policy will be most effective if it is written and specific, leaving little room for interpretation or misunderstanding. For example, the policy should outline the patient's responsibility if their insurance company does not cover care, if there are fees for missed appointments or returned checks, or if you offer a courtesy discount for payment with cash or check. It's also important that the policy be embraced by your entire team and consistently communicated to all patients.
A written financial policy will increase patient satisfaction by minimizing confusion and miscommunication. Patients often become unhappy when their expectations are not met, either clinically and financially. Without a specific written financial policy, both your
team and patients run the risk of incorrectly interpreting both payment responsibility and options.
A written financial policy will also help patients understand how their insurance benefits work within the financial system of your center. Patients may not understand how insurance benefits are applied to treatment. Your financial policy should detail the expected insurance benefit and the patient's out-of-pocket expense. Most importantly, a clear financial policy will help you to increase treatment acceptance by eliminating "fear of cost." A patient may hesitate to move forward with care because of prohibitive cost. A financial policy enables patients to quickly identify the payment option that works best for their situation, addressing the issue of cost before it can become a concern.
Adding patient financing to your financial policy makes it easy to offer patients a payment solution that fits both their budget and lifestyle. Improved cash flow, reduced A/R and more scheduled procedures are all benefits that can improve your center's financial health and help more patients get and stay healthier.
Related Articles on Coding, Billing and Collections:
CMS Coverage for Bariatric Surgery Left Up to MACs
6 Points on Medicare Reimbursement Trends in Surgery Centers
11 Statistics on Most Payor Coverage Denials
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