5 Tips for Collecting in Full From Surgery Center Patients
Bob Richardson is the president of ExtendCredit.com, a company that simplifies in-house finance plans for healthcare providers.
"Co-pay and out-of-pocket expenses have become substantially bigger," he says. "The normal way [to collect] is to pay up-front, but the reality is a lot of Americans can't do that."
To face this growing predicament, here are Mr. Richardson's five tips for collecting in full from patients.
1. Determine likeliness to pay ahead of time. Mr. Richardson recommends, if possible, determining before services are rendered which patients who cannot confirm full payment up front are likely to pay you and which are not. Obviously, it's not an exact science, he says, but surgery centers can use several mechanisms, such as credit reports or proof of employment, to get an estimation.
Talk openly with patients about finances to gauge their willingness to pay. You'll have some patients who will pay for a large portion of the procedure up front and are amenable to setting up a payment plan, he says. Other patients might insist on a low down payment and monthly fee. Combined with a poor credit assessment, these patients might present a much higher collection risk.
"If a person is saying, 'I don't know if I can afford the bill,' then have a conversation about using a payment plan they can afford," he says. "Negotiate a little for a monthly payment plan amount that's reasonable to you and to them."
For procedures with large amounts of money to be collected, such as implants, ASCs should consider running credit checks to gauge propensity to make payments on time.
"Healthcare providers don't like to do credit assessments," Mr. Richardson says, "but if it's a big procedure, it's not a bad idea to see how credit worthy someone is."
If a patient's credit information shows a history of missed payments or financial trouble, the next step could be verifying job stability, showing a year-to-date pay stub or requiring a co-signer. The conversation may be uncomfortable, but it can save future headaches for both parties.
"It's more uncomfortable when you don't get paid or have a big debt and have to collect to get your money," he says.
2. Stay in constant communication. Send proactive notifications to patients before payments are due and immediately following any missed payments, Mr. Richardson says. Keeping the patient well aware of the payment process will help increase your chances of collecting on time.
An email or text message alerting patients of upcoming payments is a quick way to notify and can save billers time and effort.
When a payment is missed, immediately contact the practice and the patient and let them know you will try to collect again in approximately one week, and provide an exact date, he says. If the patient misses the re-attempt, then the following week, make a phone call to the patient.
"What we are trying to do is keep the defaulted payment at the forefront of the patient's mind," he says. "Don't wait 30 or 60 days. As you get farther out, the collectability drops dramatically."
Also, keep a record of all conversations with a patient, whether electronic or over the phone. This will allow different staff members working on the missed payment to be on the same page with the patient. It also creates a great audit trail if you eventually need to turn the patient over to collections.
3. Allow for flexibility. Payment plans are easy if everyone pays you on time, Mr. Richardson says. The work starts when missed payments need to be collected. To help patients stay current with their payment plan, allow for occasional flexibility in the plan's repayment.
If a patient has another unexpected expense and misses a monthly payment, many systems will try to catch the patient up the next month, but realistically the patient won't have twice as much money when the next month rolls around.
"If this is not habitual behavior, skip the payment, moving the payment to the end of the loan term," he says. "Show the person in good standing, and work with them to get back on track for payments they said they could afford."
Mr. Richardson also recommends taking proactive steps to set patients up for success, such as using auto debit from their bank accounts and scheduling their payments around paydays and rent schedules.
"We focus on the, 'How do you help the person who wants to pay you when life happens?' while making sure you get paid,'" he says.
4. Consider charging interest. Though the idea makes some healthcare professionals uneasy, charging interest on payment plans is part of successfully managing the plan, Mr. Richardson says.
"Don't charge interest to make a profit," he says, "but to help mitigate risk."
If your ASC chooses to charge patients interest, keep it modest, between 3 and 6 percent. Patients won't feel taken advantage of if the charge isn't unnecessarily high.
Problems can arise, though, if payments are missed and interest has to be recalculated. ASCs with in-house billing should be careful to correctly calculate interest changes or face penalties. ASCs with outsourced billing typically have more flexibility, he says, but don't be forced into charging or not charging interest based on your billing software.
"Get a system that can handle your needs," he says.
5. Avoid going to collections. Collection agencies should be a last resort for getting patient payments. While effective, these services are costly and typically charge a large percent of the base fee. Reimbursement margins are already slim for many procedures, so going to collection agencies leaves even less room for profit.
Also, collection agencies cause healthcare providers to lose control over patient relationships. You are more likely to have a dissatisfied customer if you outsource your collections.
"The last thing you want to do is lower the boom on people in the community and have a [public relations] problem," Mr. Richardson says.
More Articles on Coding, Billing and Collections:
5 Medicare Trends for Surgery Centers to Watch
5 Common Fraudulent Coding, Billing Schemes
Tips for Decreasing Hospital Bad Debt
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