Patient deductibles are at their highest levels in history with the average deductible for employer based plans reaching $1,500 in 2018. The average deductible for individual ACA Bronze plans was more than $5,800 in 2018.
Maximizing collections at the time of service is critical to staying on top of patient collections, especially as we head into a new year when deductibles reset and most patients effectively become “self-pay.” Independent practices need to focus their patient collections efforts on the most effective tactics to maximize time of service collections and reduce bad debt write offs. Practices can no longer simply send out statements and expect to receive a check in the mail a few days later.
$1,500 Avg. deductible for employer-based plans
$5,800 Avg. deductible for individual ACA Bronze plans
Eligibility Verification Is Critical
With the changes to the ACA in 2019 regarding the individual mandate penalty and less comprehensive insurance plans being available, patient responsibility is likely to continue to increase in 2019. It is more likely that coverage for routine or preventative services either may not be covered under some of the new short-term health plans, or that the patient may have let their coverage lapse,hoping it wouldn’t be noticed until a er they had received services.
This is why it is critical to make eligibility and benefits verification mandatory at every patient visit. Once a patient receives services and leaves the practice without paying, the time it takes to collect increases while the likelihood of collecting the full patient responsible amount decreases.
Changes in Bad Debt Classification
You may have noticed that there has been a change in how patients respond to statements and letters attempting to collect on past due balances. One factor that many practices are not aware of is that the credit scoring agencies changed the weight that medical debt has on an individual’s credit score.
While medical debt does still show on a credit report, the impact that it has on the overall credit score has been reduced. Patients are often told to ignore or pay as little as possible on their medical bills by “debt consolidation counselors” because it won’t have as great of an impact as other forms of debt such as credit cards and mortgages.
Patients aren’t afraid of medical debt anymore.
Capitalize on Technology
Traditional methods of collecting from patients are no longer as effective as they once were. For a practice to be effective in patient collections, there need to be multiple methods of communication with patients based on their preferred communication channel. If a patient is used to receiving all of their bills for their utilities, insurance, mortgage and credit cards electronically and paying either online or through automatic withdrawal, they will likely expect the same convenience when presented with a bill from their medical provider.
If your bill is the most difficult one to pay, you can expect that it will be the last one paid, if at all.
Take advantage of technology to allow for multiple avenues of payment for your patients. It is easier than ever to send money to an individual or business using only an email address or cell phone number. Make sure that you are using every option available to you. It may be hard to believe, but there are still practices that don’t accept credit or debit cards because they don’t want to lose a portion of their revenue to merchant services fees. The amount that will likely be written o to bad debt due to making it more difficult for patients to pay will far exceed any cost associated with payment technologies.
Educating and Empowering Staff
Every point of patient contact becomes a potential opportunity for collecting balances due. The job of collecting from patients is no longer the sole responsibility of the billing office. As much as providers and their staff may dislike this new reality, it is not going away. And it is more important than ever to stay ahead of the patient collections game.
You need to make sure your staff is prepared to ask for payment in a way that doesn’t allow the patient to deflect or make excuses. Instead of asking, “Would you like to pay your balance today?”—train your staff to ask, “How would you like to pay your balance today?” By changing just one word in that question, the entire conversation related to the patient’s balance changes. If you have staff who find it difficult asking patients for payment, use role plays and scripts to help them build their confidence. If they still aren’t consistent with collecting patient copays and balances at the time of service then you may need to consider a change in duties or potentially a change in staff.
Be sure that your staff is familiar with common insurance terms and is able to explain them to patients in layman’s terms. Many patients don’t understand the difference between a deductible and an out-of-pocket maximum. While it may be tempting to simply refer a patient to their insurance company if they don’t understand their benefits, sometimes spending a little time educating the patient on what their responsibility is will go a long way in getting a balance paid. It can also solidify a positive relationship with your patient.
Providing your staff with the authority to set up payment plans for patients who are unable to pay their balance in full can also go a long way in reducing bad debt and making your patients feel like you care. Having a clearly defined payment plan policy that provides guidelines for staff to follow will ensure that policies are consistent from patient to patient and that you comply with all state and federal guidelines regarding debt collection. It is also a good idea to have a written payment agreement for the patient to sign as a way to clarify what they have agreed to and provide some backup to your staff in the event that the agreement is not followed.
To learn more about the changes in healthcare payments that impact your medical practice revenue, download this free white paper: