How to Improve Patient Payment Collection

As patients take on more and more responsibility for health care costs, providers must adapt with tools and tactics to ensure a timely revenue cycle. With the right approach to revenue cycle management (RCM), you can guide your patients through their care journey and the payment process with a complete end-to-end solution and a unified experience, all powered by intelligent automation that simplifies backend requirements.

We’ve put together a list of strategies and technology solutions that can help you improve your patient payment collections and keep your cash flow steady.

Understanding the Problem

Before you can address payment challenges, you must know what’s causing them. Out-of-pocket expenses are rising for many patients, driving up their responsibility and increasing payment complexity. Growing deductibles and high out-of-pocket expenses have changed RCM in health care. Where payers used to cover most care costs, patients are now taking on the role of payer as they cover more of their costs.

Collecting money from a payer is relatively straightforward, but collecting patient payments is not, especially when they’re already strained due to high deductibles and other rising costs. One of the biggest challenges lies in collecting the full and accurate amount of a patient’s responsibility for payment.

There is no easy solution to this problem, and it requires a multifaceted approach. Providers must consider every stage of the patient experience, from cost transparency before receiving services to bill reminders that actually work.

6 Tips for Collecting Patient Payments

As you improve your patient payment collection, you’ll need to consider elements like your technology use and staff training. Try these techniques to maximize collections from patient services billing:

1. Boost Transparency and Education

Start by looking for gaps in patient understanding. The complicated world of insurance can leave customers unsure of or incorrectly assuming how much they’ll owe. For example, patients may not understand why they need to pay for a telephone appointment or why a telehealth visit costs the same as an in-person one.

You can help reduce misunderstandings by focusing on education and being as upfront as possible about costs. Training your team to talk about charges can help them have the right conversations and prevent surprise costs while maintaining positive patient relationships.

Many practices charge patients upfront, which can help prevent problems during collections. The challenge with this approach is that the clinical circumstances of the visit are frequently unknown before the encounter. This makes it difficult to know exactly how much patients will owe.

For example, a patient may come in for a simple follow-up appointment. However, during the appointment, the physician might perform a minor procedure that’s separately billable (e.g., a biopsy or lesion removal). Another example is a level three office visit that turns into a level four because it requires more complex medical decision making.

With that said, practices should strive to avoid over-collecting from patients. This prevents them from owing the patients money that the practice has already spent on salaries and supplies. A good guideline is to calculate 90% of the Medicare fee schedule amount — typically the lowest fee schedule among federal and commercial payers — before applying the patient’s insurance.  This will likely result in underbilling the patient, but at least you’re getting the patient invested in their care upfront. 

2. Provide Convenient, Consumer-Friendly Payment Methods

If a small practice wants to survive, it can’t just send a statement and hope patients pay. Practices must tailor patient financial engagement strategies to fit the age and tech-savviness of the demographics they serve.

Portal-driven online bill-pay and mobile payment methods may attract the millennials and Gen-Xers who are comfortable with DIY technology, however, baby boomers generally prefer the human touch delivered by a U.S.-based call center that gently informs and educates them about why they owe what they owe.

One of the best ways to collect payments from patients is to let them do it themselves. Self-pay tools go a long way in making payments as easy as possible. Some payment technologies you can offer include:

• Text message reminders: A simple text message can remind patients to make payments when the charge hits their account. They can click on the link to access a secure online payment platform. Along with the reminder, this approach adds convenience to the payment process, making it more likely that a patient both remembers and follows through.
• Card-on-file payments: This technology enables practices to simply charge the card once a patient responsibility is assigned. If your practice intends to accept card payment as well as store, process, and transmit cardholder data, you need to host your data securely with a Payment Card Industry (PCI)-compliant hosting provider that ensures the data is encrypted, password protected and compliant with PCI Data Security Standards. These standards cover technical aspects of handling and managing cardholder data.
• Self-pay in a patient portal: Integrating self-pay options in your patient portal allows users to make payments and view charges alongside their other health information. Combined with other options, like saved cards or e-statements, self-pay in your patient portal can help improve the likelihood of payment.

Explore Digital PatienT Payment Options

3. Automate Revenue Management

Many health care organizations rely on automated systems to collect reimbursements from payers, but collecting patient payments is still a manual process. Digital self-pay options are a significant part of this automation, removing the need for a staff member to process payments entirely. When patients make their payments without any human intervention from the provider’s office, the health care organization can dramatically reduce the complexity of revenue management and increase revenue.

Other tools we mentioned, like reminders and saved cards, support this hands-off collections process. One way that Millennia supports automation in collections is through machine learning. Millennia uses contextual information to identify the best way to contact a patient and increase the likelihood of engagement. For example, if a patient usually makes payments in the evening after a text message reminder, Millennia would contact them accordingly.

4. Use Discretion When Performing Follow-ups

Following up with patients about their bills is often a necessary part of collections, but it must be done with care. Anyone performing follow-ups should approach them with a mindset of finding a solution rather than pestering someone for payment. The wrong tone can damage your relationship with the patient.

For example, if the same invoice remains unpaid after two billing cycles, try to connect with the patient to make sure they received it and to answer any questions they have. To minimize questions, be sure to send a clear and concise invoice. This includes the service date, location, provider, description of the service rendered, amount insurance paid (including primary and any secondary insurance) and the amount the patient owes. It’s also important to differentiate between copayment and co-insurance amounts.

You never want patients to delay or forego necessary care. Many of them could simply be having a rough patch and would otherwise be loyal patients to the practice. However, keep in mind that the longer it takes patients to pay off their debt, the less value that money has to the clinic due to overhead, salaries and other expenses. If you offer payment plans, consider limiting them to three or four monthly installments.

5. Keep Your Refund Obligations in Mind

Another important aspect of your revenue cycle to consider is patient refunds. To stay on top of these, run a monthly aging of accounts receivable report with credit balances. This allows the practice to refund patients in a timely manner and according to payer requirements without creating extra work by running the report more often. For example, Medicare, requires providers to refund patients within 30 days of the payment date, a requirement that can be met with a monthly review of refunds that are pending.

6. Consider Outsourcing Your Billing

For many practices, billing can be a time-consuming task and, if not done correctly, a costly one. In some cases, it makes more sense for practices to outsource RCM to a company that is a branded extension of the practice and staff. Many companies, like Millennia, white label their services, which means their tools and staff are all identified as part of your practice, eliminating any confusion for your patients. Outsourcing can also help you respond to fluctuating needs without changing your staff. When OrthoNY outsourced its billing to Millennia they were able to improve their overall patient payment rate to 72%.

Here are some tips for negotiating a favorable contract with an RCM vendor:

• Require the vendor to charge only a percentage of what they collect.
• Ask the vendor to waive its implementation fee.
• Demand an easy-out contract. “If the vendor doesn’t perform within an agreed upon timeframe (e.g. six months), you should be able to walk away without cause or penalty.

Optimize Patient Payments With Integrated Technology From Millennia

As patients are responsible for more of their medical costs, managing patient payments has become increasingly complex, and today’s patients need modern solutions. At Millennia, we help health care organizations simplify the non-clinical aspects of their businesses. Our end-to-end platform supports modern patient payment technologies, like self-pay tools and text message reminders. Our arrival solutions include resources for before the patient’s visit, such as estimate tools and pre-payment, while our post-visit solutions facilitates statements, mobile pay, support chats and more.

Our unique engagement intelligence technology allows providers to reach patients in the best ways while streamlining virtually all aspects of operations. Create a unified patient experience, automate your patient payment process, and collect more revenue with Millennia. Request a consultation today to take the first step in improving your revenue cycle.

About The Author

Kevin Hidenfelter

Kevin Hidenfelter is Millennia’s Executive Vice President of Sales and Marketing. He joined the team in 2022 with 25 years of experience in healthcare services and technology. With 14 years of experience in healthcare revenue cycle management, Kevin is very passionate about improving the patient experience.

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