Owing to the pandemic, job loss, and the possible loss of health insurance, patients have had more difficulty managing copays, coinsurance, and deductibles, not to mention other out-of-pocket health care charges.
“Many of our patients have lost their jobs or have had their hours cut back, and as a result, they are struggling to make ends meet,” said Ahmad Chaudhry, MD, a cardiothoracic surgeon in Lexington, Ky. “However, we cannot continue to provide care if our patients do not pay their bills.”
This news organization asked physicians what they do when their patients don’t pay. About 43% said that they continue to treat them and develop a payment plan; 13% send their bill to collections; 12% continue their care and write off their balance, and 25% choose other actions. Only 8% of physicians drop patients if they don’t pay.
Because you need to pay your own bills, what can you do about nonpaying patients?
Start with price transparency
In the past, patients never knew what their lab work or a chest EKG would cost because it wasn’t listed anywhere, and it was usually more than expected. Because of new legislation concerning health care price transparency, hospitals, health plans, and insurers must pony up with the actual fees, making them transparent to patients. Physician practices should follow suit and keep prices transparent too. Patients are more likely to pay their bills when prepared for the expense.
Patients with insurance often don’t know what they’ll be paying for their visit or their tests because they don’t know how much insurance will cover and what will be left for them to pay. Also, they may not know if they’ve met their deductible yet so they’re unsure whether insurance will even kick in. And patients without insurance still need to know what their costs will be upfront.
According to 10 insights from the Primary Care Consumer Choice Survey, 74% of health care consumers were willing to pay a $50 out-of-pocket charge to know the cost of their primary care visit.
Provide payment plans
Many patients have always needed payment plans. It’s one thing to post a sign at check-in telling patients that all monies are due at the time of service, but it’s another reality for a patient who can’t fork over the $250 charge they just unexpectedly spent in your office.
Discover Financial Services recently ran a survey, with results presented in the press release Americans are Delaying Non-Emergency Medical Care in Higher Numbers than Last Year, and found that many Americans with medical debt are delaying nonemergency medical care. For example, they put off seeing a specialist (52%), seeing a doctor for sickness (41%), and undergoing treatment plans recommended by their doctor (31%).
Turning an account over to collections should be a last resort. In addition, agencies typically charge 30%-40% of the total collected off the top.
Though collecting that amount is better than nothing, using a collection agency may have unexpected consequences. For instance, you’re trusting the agency you hire to collect to represent you and act on your practice’s behalf. If they’re rude or their tactics are harsh in the eyes of the patient or their relatives, it’s your reputation that is on the line.
Rather than use a collection agency, you could collect the payments yourself. When a patient fails to pay within about 3 months, begin mailing statements from the office, followed by firm but generous phone calls trying to collect. Industry estimates put the average cost of sending an invoice, including staff labor, printing, and postage, at about $35 per mailer. Some practices combat the added costs by offering a 20% prompt-pay discount. Offering payment plans is another option that helps garner eventual payment. Plus, practices should direct patients to third-party lenders such as CareCredit for larger bills.
On occasion, some small practices may allow a swap, such as allowing a patient to provide a service such as plumbing, electrical, or painting in exchange for working off the bill. Though it’s not ideal when it comes to finances, you may find it can work in a pinch for a cash-strapped patient. Make sure to keep records of what bills the patient’s work goes toward.
It often helps to incentivize your billing staff to follow up regularly, with various suggestions and tactics, to get patients to pay their bills. The incentive amount you offer will probably be less than if you had to use a collection agency.