Every practice manager knows that accounts receivable management is top priority in running a successful practice. Group professionals frequently struggle with how to deal with self-pay patients and insurance companies that don’t pay in a timely manner, or don’t pay whatsoever.
Developing and implementing a comprehensive collection policy is crucial to running an effective practice. Follow these simple steps to help your practice flourish and maintain healthy relationships with your patients.
Establish a Defined Credit Policy
- A written policy gives staff a comprehensive document for reference and support.
- Have one policy for the practice, not one for each physician.
- Define “past due.”
- Include a payment policy.
- Allocate someone who is not involved in patient care to discuss financial matters.
- Keep it clear and simple:
- How many written notices?
- How many phone calls?
- How is returned mail handled?
- Review and update as needed!
Create a Patient Financial Clearing Process
- Have a patient advisor talk to patients before services are rendered.
- Keep the financial arrangements and patient care separate.
- Keep in mind that a patient who owes a balance may not return out of embarrassment over their balance.
- Offer payment plans. Often patients would like to pay but are incapable of paying in full right now. Though the process may take place over a given time, payment plans keep patients loyal and coming back.
- Establishing payment arrangements is a two-way street; you create the rules and your patients have to play by them if they want to do business with you.
- Be fair and reasonable.
Evidence shows it is best to vary the form of follow-up at regular intervals of 10-20 days.
Here’s what I recommend:
- 2 mailed bills + 1 phone call + 1 warning letter. But only if you can get all this done within 90 days.
- Colored paper helps grab patient’s attention.
- Be careful when leaving voice messages.
Follow Up Early
- Be the “Squeaky Wheel.”
- Provide a written request for payment including due date and suitable payment types.
- Remind and thank them for their earlier commitment.
- Attach copy of their previous commitment.
How to Talk to Patients about Their Balance
When communicating with a patient about making a payment on their account, it is important to keep control of the conversation at all times whether over the phone or in person.
Asking for money in the best manner is a three step process:
1) Sympathize: Show compassion. "I know how you feel, that happens sometimes.” This will defuse any possible anger and catch them off guard.
2) Remind the debtor of their obligation: "Mrs. Smith, your account was supposed to be paid on _________ date. (This can possibly cause a little guilt on their behalf and they realize you are right in asking for the money.)
3) Ask them:
"Mrs. Smith, will you be in today or tomorrow?"
"Mrs. Smith, will you be paying with cash, check, or credit?"
"Mrs. Smith, of the $200 that is now due, how much are you short?"
- If they say they are short by half, "Okay Mrs. Smith, let’s do this: I'll need the $100 you have now. I'll mark it on my calendar that your check/money order should be here __________. Now, how much time do you think you'll need to take care of the balance? Do you get paid weekly or bi-weekly?"
When setting up payment plans, asking whether they get paid weekly or bi-weekly steers the conversation to having them pay twice a month to pay down their balance faster. - If they say they are short the entire amount, maintain control of the conversation and you now dictate payment terms.
How Not To Ask
Here are the top three questions I hear when asking for money and the debtor says they can't pay the bill in full. However, these statements are not how you will want to respond:
1) "How much can you pay?"
2) "When can you pay?"
3) "Can you pay something?"
NOTE: This gives control of the conversation to the debtor, which permits them to give you ridiculous answers such as "$5.00 per month."
Instead tell them what you are willing to accept in the form of two alternatives, i.e. "I can either resolve your account for _____ dollars in the next 30 days or you can start making payments of _____ dollars per month for 3 months." By offering two options, you are asking them to choose one, rather than asking them to choose between paying and not paying. At this point the debtor may make a counter offer. This is good since you are now discussing payment.
Bridging Statements
One of the most effective techniques that collectors use to help retain control of a call is “bridging.”
A bridging statement is a statement that recognizes the human need and moves the consumer into the business need.
This statement can include an empathy statement and/or rephrasing what the consumer told you. Verbal bridges allow the collector to:
- Direct a debtor back to relevant topics if he or she loses focus or seems off on an irrelevant tangent
- Move away from controversial, uncomfortable or unflattering topics and back on to key messages
- End every answer to every question with an organized, strategic message
Keys to Bridging
- Avoid getting involved in the emotion.
- Work empathy and avoid sympathy.
- Be sincere and courteous.
- Acknowledge what you just heard.
- Actively listen so you can gather information.
- Stay away from “but,” “no,” or “however.” Instead, use bridging statements like the samples below:
Examples of Bridging Statements:
- "What’s most important is that we find a payment plan that keeps you out of collections without jeopardizing the needs of your family."
- "The real issue here is money; not so much an insurance issue, is that correct?"
- "Let me answer you by saying that it is frustrating to get calls from a collection agency. Now I’m willing to work with you on a payment plan that will work for both you and our office."
- "Another thing to remember is that we are willing to work with you during this difficult time."
There may be a point in which your in-house processes are not enough. A third party can motivate a patient to pay purely because the demand for payment is coming from an external agency. Before paying a percentage to a collection agency, going through small claims court, or an attorney, check into using a flat fee, diplomatic pre-collection service. These services deliver accounts receivable solutions from the time a bill or statement has been sent to when the account is past due.
Remember that in many states, healthcare practices are governed by the same laws as collection agencies. If you are not sure, call your state’s department of finance or consult an attorney.
In the end, even with a well-designed and controlled collection plan, there are some accounts that your team will never collect. By recognizing those accounts quickly, you will save your practice time and money and profit from improved cash flow from the vast majority of accounts that will pay.
Source: Wally Schmader, Transworld Systems, Inc.
