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13 Steps to Increase Patient Payment Collections

If improving your patient payment collections isn’t a top priority in your financial plan this year, you’re in trouble.

Why? With the rise in high-deductible plans, patients are facing bigger medical bills — ones they aren’t always prepared to pay.

When patients don’t pay you, your practice is at risk. Patient copays alone make up about 20% of a doctor’s office revenue, but most physician practices only collect a dismal 60% of patient copays. A further drop in this collection rate, along with the costly demands of preparing for ICD-10 and meeting meaningful use requirements, would be bad news for your practice. Especially if you’re in a small practice with a tight budget.

Alison Diana, Senior Editor at InformationWeek, stresses just how critical patient payment collections are to a medical practice’s financial health this year:

“Earlier today I spoke to another HIT executive who stressed just how much bigger this concern will grow for providers, as more and more patients have to pay either larger co-pays per office visit or will have to spend more out-of-pocket as consumers opt for insurance policies with higher deductibles. Whereas it once might have meant relatively little to a practice’s profitability if they didn’t collect a high percentage of co-pays, patient payments will account for a bigger chunk of providers’ income – and thus, it is getting more critical for practices to collect every penny they’re owed.”

So, what is the best way to collect money from patients? To keep your business running through the onslaught of revenue threats this year, you’ll need a plan of action for improving patient collections best practices. Draw up your strategy from these 13 tactics for how to maximize patient collections.

  1. Use appointment reminders to prompt bill payment.

    When it comes to how to effectively collect patient balances, this is the first step. Make unpaid balances or payment reminders part of your appointment reminders. When staff contact patients to confirm an upcoming appointment, have them mention any unpaid balance amounts and explain the different options the patient has to pay. Make it clear that patients will be expected to pay before the appointment or when they arrive at the office.

  2. Be transparent with patients about prices.

    One of the biggest reasons patients don’t pay medical bills? Medical expenses can be hard to budget for. To lower the chances your patients will end up with large medical costs they can’t afford, be as upfront as possible about procedure costs. Check your patients’ coverage before the consultation and factor costs into the discussion. Remind patients who are on high-deductible plans that they will likely be paying out-of-pocket.

  3. Purchase a billing management software system.

    Software can streamline your patient collections process in medical billing by tracking past dues, automating late fees, and identifying patients who are behind. Although purchasing billing software come with a price tag, it could save you a significant amount on internal billing resources and boost your payment collections rate.

  4. Collect payments via your patient portal.

    If you want patients to pay your bills, you need to make the process as easy and accessible as possible. Allowing patients to pay online with a credit card can do just that. You’ll also save on the resources required to mail a paper bill, and you can collect payments faster. Plus, promoting online bill pay could get more patients using your patient portal, and help satisfy meaningful use.

  5. Give patients the benefit of the doubt.

    Always check that an unpaid bill isn’t the result of a billing error on your part before you pursue the patient. A better rapport with your patients can only help in improving your payment collections.

  6. Know when to use a collections agency.

    Set a dollar amount and time limit for referring past-due bills to a collection agency. If you’ve gotten to the 90-day mark and the patient still hasn’t paid, it’s time to consider using a collection service. At that point, it’s unlikely that your staff is going to get anywhere. A notification from a third-party agency can make the patient realize you mean business.

  7. Offer payment plans.

    Payment plans can be a good option if your patient population is motivated to pay, but just can’t pay the whole bill upfront. Consider offering this option to patients who are receiving larger bills and say they’re unable to pay the full amount right away.

  8. Train staff to prompt for payment.

    Provide your staff with scripts on how to deal with overdue accounts. Even though staff might be frustrated by repeated attempts to contact the patient, they should always be courteous and respectful. Make sure all front office staff knows when to prompt patients about unpaid bills, and can provide patients with information on practice rates and methods of payment.

  9. Share your billing policy with patients.

    Your patients are more likely to pay when they know what to expect. Create a clear billing policy (if you haven’t already) and then share with patients. Post it in office, on your website or portal, and share with every new patient. Any changes to that policy should also be promoted and shared with your patients.

  10. Incentivize your billing staff.

    Constantly following up on past-due accounts with unresponsive patients can be tiring and downright demotivating for your staff. If you feel staff need a little extra encouragement, try out an incentive program. Offer staff a prize for a certain % payments collected or do a monthly competition.

  11. Contact “slow payers” more frequently.

    Rethink how often you contact patients with large, unpaid balances. If your staff can manage the task, try calling once a week instead of the standard once a month. Consistent, regular contact can demonstrate your persistence and convince patients it’s time to pay up. However, do call or contact during business hours only and always be courteous. You want to be persistent without harassing the patient.

  12. Use USPS address service.

    A common challenge to payment collections is patients who have relocated without providing their new address. If this is a frequent problem at your practice, consider adding “address service requested” to any bills you mail so that the U.S. postal service sends you the patient’s correct address (for a small fee).

  13. Schedule a regular meeting to review finances.

    You can’t drive improvement in your payment collections unless you track and manage your results. Make reviewing your payment collections a standard part of your regular financial meeting. Analyze your progress and determine which strategies are working, and which aren’t. Repeat this process at least monthly.

Not all of these strategies are right for every practice, but putting just a few into place should boost your payment collections enough to get you through the year. Remember as you’re using any of these tactics to always approach patients with respect and understanding. If you and your staff maintain good relationships with your patients and provide high-quality care, patients will be more motivated to pay on-time.

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We want to hear from you – which one of these strategies have you found most effective for improving your payment collections?



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