1. Develop a written financial policy.
One of the quickest and most effective ways to negatively impact your cash flow is carrying accounts receivables — especially in today’s economy. As patients’ budgets become tighter, oftentimes paying for services they’ve already received, such as medical bills, tumbles to the bottom of their priority list. And when payments are delayed to your center, your cash flow evaporates and you tie up the critical capital you need to pay your team and your bills. Even worse, when a patient defaults, the cost of collections and writing off bad debt can increase overhead.
One obvious solution is to no longer extend credit through your ASC. Unfortunately, if you limit payment options, patients will find it more and more difficult to find a way to pay for their care. That’s why it’s important to create and implement an effective financial policy, which sets expectations and provides patients with payment options that are in the best interests of the center.
An effective financial policy communicates to your patients when payment is expected and what forms of payment are accepted at your ASC. Your financial policy should be 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 and 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 should:
1. Increase patient satisfaction by minimizing confusion and miscommunication. Patients become unhappy when their expectations are not met — both clinically and financially. Without a written, specific financial policy, both your team and patients have the opportunity to incorrectly interpret both payment responsibility and options.
2. Ensure patients clearly understand how their insurance benefits work within the financial system of your center. How insurance benefits are applied to treatment can be very confusing to patients. Your financial policy should detail how the expected insurance benefit and the patient’s out-of-pocket expense are handled.
3. Increase treatment acceptance by eliminating “fear of cost.” Cost can cause a patient to hesitate when it comes to accepting the care they want and need. 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.
2. Offer payment options that are good for your patients and your ASC.
Although it may not be in the best financial interests of your ASC to extend credit to patients, you must be able to provide patients with a payment option that enables them to accept care. Your written financial policy should include, of course, cash, check and major credit cards.
You should also consider adding a third-party payment program. With a third-party payment program, you can offer patients both no-interest and low-interest extended payment plans without assuming the risk and expense of billing and collections.
Here’s how it works: Patients complete a short credit application which you submit to the third-party financing company. You will receive a credit decision and credit line almost instantly. Patients can immediately schedule care and conveniently pay over time. The benefit is that the financial arrangement is between the patient and the financing company, so you receive payment via an electronic transfer in about two business days with no recourse if the patient is slow to pay or defaults. To successfully implement a third-party payment program, this option should be listed on your financial policy and discussed along with your other payment options.
3. Choose the right financial partner.
When you offer no-interest or low-interest plans through a third-party financing company, you must be able to trust them with your patient relationships. In other words, the partner you choose must treat your patients as well as you do. Here are a few things to look for when selecting your third-party financing partner.
▪ 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.
▪ 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?
▪ Customer service. Can patients get help 24/7? Does the company provide your team and your patients with high-quality information and service?
▪ Efficiency. Can your patients complete the application in just a few minutes? Can you receive a credit decision within seconds?
▪ Value. Does the company provide marketing and presentation materials? Do they offer other value-add services to help your ASC become more financially healthy?
4. Use a patient payment agreement form.
In addition to a written financial policy, developing and providing a patient payment agreement form is helpful in minimizing confusion and having the patient psychologically commit to paying for their care. After the financial policy has been discussed and the patient has chosen their preferred payment method, a patient payment agreement form should be completed.
This form should include all financial details, including the total cost of care, anticipated insurance benefit, payment option preferred by the patient and specifics on what amount is due on what dates. It’s important to be as detailed as possible as this patient payment agreement form becomes the “contract” between you and the patient. This form is often produced in duplicate and confirms the financial discussion, including the total cost of care, the anticipated insurance benefit and the preferred payment option. The patient signs the form and receives one copy while the other is placed in your file.
5. Effectively communicate your financial policy to patients.
It’s critical to communicate your financial policy consistently to all patients. Contact with the patient prior to their procedure, often described as the “clinical call,” is very important. It provides a forum to let patients know important medical instructions and better insures a safe and successful visit. The “financial call” is as critical but is often overlooked. When discussing fees and payment options, it’s important for all team members to provide patients with the same information.
This can be accomplished through role-playing and scripts. The financial discussion should be designed as a two-way dialogue to give the patient the opportunity to ask questions and make comfortable decisions. It is helpful to use the financial policy or payment chart as a visual aid if they are present.
Here is an example of a script you can follow to educate patients on your financial policy and discuss their payment options:
“Mr. Jones, the cost for the treatment we’ve discussed is going to be $3,500. As you’ll notice here on our financial policy, we require payment prior to treatment. We anticipate your insurance benefits will cover $1,000, leaving you with an out-of-pocket expense of $2500. We have several convenient payment options to help you get the care you need … let me go over them with you. Of course, we accept cash and checks. We also accept Visa, MasterCard and American Express. We also offer a no-interest payment plan, which many of our patients really appreciate. Let’s take a look here and see what your monthly payments would be with the 12-month no-interest plan …. it looks to be about $XXX. Or if you prefer lower monthly payments, we offer a low-interest extended payment plan — which would give you monthly payments of about $XXX. Mr. Jones, which of these payment options do you think would be most comfortable for you?”
By giving patients a variety of options that are all financially healthy for your ASC, they can find an ideal solution that meets their specific needs, in any economy.
Mr. Morris (rmorris@carecredit.com) is vice president of marketing and new business development for CareCredit, a GE Money company which offers patients a personal line of credit for healthcare treatments and procedures. Learn more about CareCredit.
