How to Improve Patient Payment Collection

As patients take on more responsibility for health care costs, providers must adapt their collection methods. With the right revenue cycle management (RCM) approach, you can guide your patients through their care and payment journey. Below, we’ve put together a list of strategies and tech solutions to help you improve your patient payment collections and keep your cash flow steady.

The Growing Challenge of Collecting Patient Payments

Out-of-pocket expenses are rising for many patients, driving up their responsibility and increasing payment complexity. In 2024, 32% of insured employees had annual deductibles of at least $2,000 for individual coverage, which is nearly double the percentage from 2014.

Collecting money from payers is relatively straightforward. However, patient payment collection presents unique obstacles that make it challenging to collect the full amount an organization is owed. This shift has changed RCM in health care, demanding a multifaceted approach. Providers must consider every stage of the patient experience, from cost transparency to bill reminders that actually work.

7 Tips for Collecting Patient Payments

Try these techniques to maximize collections from patient billing:

1. Boost Transparency and Education

Start by looking for gaps in understanding. The complicated world of insurance can leave patients unsure of how much they owe or cause them to make incorrect assumptions. For example, patients may not understand their deductible obligations or assume copays cover all charges. You can help reduce these misunderstandings by:

• Focusing on education: Train your team to have the right conversations with patients. This way, patients can avoid surprise costs, and you’ll maintain positive relationships.
• Being transparent about costs: Have billing personnel openly discuss charges to keep patients informed and aware.

While charging patients upfront can avoid collection issues, predicting the exact amount they will owe is tricky. Even simple follow-ups can result in extra billable procedures, such as lesion removals or unexpected biopsies. Estimate patient costs conservatively, using Medicare rates as a baseline since they’re typically lower than commercial rates. This approach may mean collecting less initially, but it engages patients early and avoids refund hassles.

2. Provide Convenient Payment Methods

Sending a statement and hoping patients pay won’t cut it. Organizations must implement personalized engagement strategies reflecting their patient population’s digital literacy and communication preferences. Those who are more tech-savvy often expect patient payment portals and mobile methods. Others might place more value on having patient support agents who can explain their payment responsibilities and charges.

One of the best ways to collect patient payments is to empower them with self-pay tools. Some technologies that make payments as easy as possible include:

• Text message reminders: A simple text message can remind patients to make payments when the charge hits their account. Including a link to access a secure online payment platform also makes the payment process more convenient. With this approach, patients are more likely to remember and follow through.
• Card-on-file payments: This technology enables practices to automatically process charges once patient responsibility is assigned. Patients no longer have to swipe their cards manually or enter their details, streamlining the payment process.
• Portal payments: Integrating self-pay options within these portals allows users to make payments and view charges alongside their health information. Combined with other methods, like saved cards or e-statements, portal-based payments can help improve collections.

If your practice plans to accept, store, process or transmit card data, you must partner with a Payment Card Industry (PCI)-compliant hosting provider like Millennia. This ensures all data is encrypted and password-protected and meets PCI Data Security Standards for cardholder data management.

3. Offer Self-Service Payment Plans

With nearly half of Americans facing challenges affording medical expenses, self-service payment plans in healthcare are essential. In fact, almost 20% of practices offer flexible payment terms ranging from four to 24 months.

Industry data confirms patients opt for extended payment schedules for bills over $1,500. Although it takes longer to collect funds, these plans drastically enhance your chances of receiving the full amount.

As the latest feature in the Millennia patient payment portal, patients can set up payment plans directly in the portal, without speaking to an agent. With this approach, you can improve payment collection while reducing the administrative burden for your team.

The payment portal shows patients all available payment plan options — customized to your organization’s guidelines — allowing them to choose what works best for their budget. Users can also personalize every aspect of their payment plan by choosing their ideal start date, payment method and reminder notifications. Plus, they can easily view their next payment date to stay on track.

4. Automate Revenue Management

Many healthcare organizations rely on automation to collect reimbursements from payers, but patient payments are often still manual. Digital self-pay options are a significant part of automation, removing the need for staff members to process payments entirely. When patients make their payments independently, healthcare organizations can significantly reduce the complexity of revenue management and increase collections.

Tools like reminders, saved cards and self-service payment plans also support this hands-off collections process. One way Millennia enhances automation in patient revenue management is through machine learning. By evaluating contextual information, our patient payment solution identifies the best way to reach a patient and increase the likelihood of engagement. For example, if they usually make payments in the evening after a text message reminder, the system would contact them accordingly.

5. Implement Thoughtful Follow-ups

Patient billing follow-ups demand a mindful approach. Anyone handling these interactions should prioritize finding a solution rather than pestering someone for payment, as the wrong tone can damage patient relationships.

Let’s say the same account goes unpaid after multiple billing cycles. In this case, proactive resolution strategies can include contacting the patient directly to confirm statement receipt and tackle payment barriers. To help patients understand their bills and minimize delays, be sure to include the following in all invoices:

• The service location and date
• The provider’s name
• A summary of the services rendered
• The amount the patient owes
• The amount that payers will cover
• A breakdown differentiating between coinsurance and copayment amounts

Remember, patients could simply be experiencing a rough patch. The last thing you want is for them to delay or forego necessary care, as they would otherwise be loyal to your practice. In this case, a possible solution could be to discuss available payment plans.

6. Manage Refund Processes Effectively

Another critical aspect of RCM is patient refunds. To stay on top of them, run a monthly aging report of accounts receivable with credit balances. This strategy helps ensure timely refunds following payer requirements, without creating extra work.

For example, Medicare requires providers to refund patients within 30 days of the payment date. A monthly review of pending refunds can help your organization meet this requirement.

7. Outsource Billing and Collections

For many practices, running the patient revenue cycle in-house can be time-consuming and costly if not done correctly. That’s why more organizations are outsourcing billing and collections to companies that serve as a branded extension of their practice and team.

At Millennia, we handle the patient payment side of RCM. With white-label services, our tools and staff appear as part of your organization, eliminating any confusion for your patients. Outsourcing can also help you respond to fluctuating needs without changing your personnel.

Want to outsource other components, like payer reimbursement and follow-up, or claims management? Here are some negotiation strategies to help you get the best deal with your RCM partner:

• Push for performance-based pricing: Rather than a flat fee, your vendor earns a percentage of what they collect. 
• Discuss implementation costs upfront: Some companies will waive these costs as part of your organization’s overall package. 
• Build in performance guarantees: If your vendor doesn’t perform within the agreed-upon time frame, you should be able to end the partnership without penalties.

Optimize Patient Payments With Integrated Technology From Millennia

As patients are responsible for more medical costs, managing payments has become increasingly complex, requiring modern solutions. At Millennia, we help providers get paid more efficiently and improve the patient payment experience.

Our feature-rich platform supports advanced payment technologies, like self-pay tools, self-service payment plans and text message reminders. Plus, our unique engagement intelligence technology allows you to reach patients in the most effective way.

With Millennia, you can automate your patient payment process and collect more revenue. Our track record speaks volumes — we’ve helped our clients increase self-pay revenue by as much as 300% while recovering between two and four times the national average in patient payments.

Request a consultation today to take the first step in improving your patient revenue cycle.

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