Late patient payments are bills that aren’t settled within the expected time frame, which is typically 30 days past the invoice date. Beyond being inconvenient, delayed payments can threaten your organization’s finances, operations and patient relationships, ultimately impacting your bottom line. 

With 50% of hospitals and health systems holding over $100 million in accounts receivable for old claims, effective patient collection is more than a best practice. It’s an absolute necessity for an optimized revenue cycle. Discover strategies for accelerating patient payments to shield your financial stability while delivering high-quality care. 

The Financial Impact of Late Payments

Let’s take a look at the financial impact of late payments.

Reduced Cash Flow 

Overdue payments reduce immediate cash flow, making it challenging for organizations to manage critical operational expenses. Without sufficient funds to cover payroll, staff reductions might become your only option. Being unable to order medical supplies or pay utility bills can also lead to resource scarcity. 

Increased Bad Debt

Late payments and bad debt go hand in hand. The longer an account goes unpaid, the higher the risk of it becoming uncollectible. This means you either need to write it off as a loss or turn to a collection agency. While these agencies may recover some funds, their fees can be as high as 50% of the collected amount. As a result, healthcare facilities still lose a significant portion of their earned revenue.

Inflated Administrative Costs

With administrative costs exceeding 40% of patient care expenses, chasing late payments adds to the burden. You may need to hire additional employees or pay existing team members overtime to perform follow-ups and collections. The cost of billing and collection platforms can also add up, putting more strain on your organization when cash flow is already a concern.

Limited Opportunities for Growth

Delayed revenue means there are limited funds for facility and technology upgrades and service expansions. This can hinder a practice’s long-term success and sustainability. 

Increased Borrowing Costs

Late patient payments can force you to take out loans to cover operating expenses and other essential costs. Although this is sometimes necessary, paying interest on these loans can reduce overall profitability and worsen economic health over time.

The Operational Impact of Late Payments

The impact of late patient payments on revenue often has a domino effect, compromising every aspect of an organization’s operations.

Reduced Employee Satisfaction

The increased workload related to patient collections can contribute to feelings of burnout. Additionally, the perception of financial instability can decrease employee morale and satisfaction, increasing your turnover rates. 

Difficulties in paying staff on time can also lead to frustration among clinicians. They might start looking for other employment opportunities, leaving a gap in your organization.

Limited Technological Advancement

With insufficient cash flow, organizations may delay purchases of modern medical equipment. Outdated systems can lead to inefficiencies and errors, potentially risking patients’ health and safety. 

Using older technology is also a security risk, leaving you more vulnerable to cyberattacks. Beyond the concern of stolen patient data and operational shutdowns, healthcare data breaches can carry a hefty price tag, costing just over $10 million on average.

Decreased Quality of Care

When payments are delayed, the patient experience ultimately suffers. Staffing issues or a lack of supplies can cause practices to postpone appointments. They may also need to limit their hours or service offerings to stay afloat, further reducing access to care.

Without the latest technology or the ability to retain skilled professionals, the overall quality of service declines, negatively affecting treatment outcomes. Individuals facing medical debt are also less likely to seek care, which can lead to health complications and increased readmissions. 

The Impact on Patient Relationships

Persistent payment delays can damage your organization’s relationship with its patients.

Increased Frustrations

Constantly contacting your patients about overdue accounts can create tension. They may feel disgruntled or harassed, negatively impacting patient satisfaction and loyalty. Additionally, nearly 40% of Americans struggle to understand their medical bills. This confusion can add to their frustration and make matters worse. 

Reduced Trust 

Billing disputes can result in communication breakdowns that complicate long-term patient-provider relationships and erode trust. As a result, individuals might choose to seek care elsewhere. In fact, around 63% of patients would switch healthcare providers due to an unpleasant payment experience.

Diminished Community Support

A negative experience related to the payment process or the quality of care can have a knock-on effect. Dissatisfied patients may share their frustrations with friends and family or write reviews online, potentially tarnishing your organization’s reputation. This can lead to a loss of support from your community.

Strategies for Mitigating Late Patient Payments

The right strategies can help your organization protect its finances, optimize operations and uphold positive patient relationships. Here’s how to reduce late patient payments.

1. Improve Financial Communication 

Because confusing medical bills and uncertainty about financial responsibility can cause delayed payments, educating patients about what they owe and their available payment options is key. This begins with open communication — encourage patients to ask questions and provide jargon-free answers. Visual aids and language summaries also go a long way. 

Easy-to-understand, transparent statements are also crucial. The Millennia Patient Payment Solution simplifies the patient payment experience, providing white-labeled statements with a clear breakdown of charges. Plus, our patient support agents are available via phone or live chat to clear up any confusion. 

2. Implement Payment Technology

Digital tools and systems can create a more convenient payment experience to optimize collections and boost revenue. For example, online payment portals allow patients to easily settle bills electronically, encouraging timely payments. 

To lessen portal fatigue, ensure you also provide alternatives that don’t require a separate account and password. In addition to our Patient Payment Portal, we offer:

• Mobile pay.
• Photo-capture bill payment.
• Dynamic QR-coded statements.
• Text-to-pay.
• Chat pay. 

This way, patients can choose what suits them. This creates a better experience while increasing your chances of getting paid. 

3. Offer Flexible Payment Options

Upfront payment isn’t feasible for everyone, causing patients to become unresponsive to collection efforts. Payment plans can make settling their accounts more manageable. Your organization can improve cash flow with incremental payments rather than facing delays or total loss of revenue.

The Millennia Patient Payment Portal empowers patients with Self-Service Payment Plans. They can select from predefined options and set their start date, payment method and notifications.

4. Streamline Billing and Collections Processes

Sending bills long after patients’ appointments can mean that they struggle to recall services, leading to late or forgotten payments. Automated billing creates and sends invoices, accelerating the billing cycle. You can also automate payment notifications to gently remind patients about outstanding balances. In fact, 44% of Americans pay their medical bills faster with digital notifications.

Beyond our automation capabilities, our solution uses data analytics to predict a propensity to pay. This makes collection easier than ever and supports patients in need while streamlining payments for those who are able to pay on time.

Outsourcing billing and collections to vendors like Millennia minimizes the time and effort needed to chase payments, freeing up your team to focus on higher-value tasks. Many of our clients also reduce their cost to collect by 50%.

The Importance of a Proactive Approach

These strategies help you address potential payment issues before they arise. More than reducing delayed revenue and maintaining smooth operations, such an approach makes patients feel supported. This can lead to higher satisfaction and a stronger patient-provider relationship.

The decision to outsource to a dedicated partner like Millennia also eliminates the need to implement these strategies in-house. With us, your organization gets instant access to the latest technology and a specialized team focused on boosting your revenue.

The numbers speak for themselves — providers who have invested in the Millennia Patient Payment Solution collect up to four times the national average in patient payments. Our clients also enjoy faster payment speeds, collecting 52% of patient payments in the first 30 days, drastically outperforming the industry average of 28%.

Reduce Late Payments With Millennia

For more than a decade, Millennia has helped healthcare providers exceed their financial goals while prioritizing patient satisfaction. Reduce late payments with our Patient Payment Solution. Schedule a consultation today to experience how Millennia can help your organization. 

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