The Healthy Way to Help Patients Pay for Care

In today’s economy, it can be too costly and risky to extend credit to patients through your surgery center. Delinquencies and defaults are increasing and most surgery centers do not have the training or staff needed to effectively bill and collect payments from patients. But it’s also important to be able to offer patients a variety of payment options, so they can comfortably pay for their healthcare needs.

The Cost of Extending Credit

When it comes to extending credit and carrying accounts receivable, many doctors believe their staff has the time to bill patients and make collection calls, so the cost is minimal. This couldn’t be further from the truth. Extending credit through your surgery center includes both hard and soft costs.

According to the Medical Group Management Association’s book, Physician Billing Process: Avoiding Potholes in the Road to Getting Paid, it costs $5 to $7 to generate each bill and send it to a patient. If you have an average of 200 statements per month, these costs can easily add up to almost $17,000 per year! If the patients are slow paying, additional time, effort and money must be invested in collection letters and calls. And ultimately, if the patient does not pay, you may be forced to hire a collection agency. The hard costs of involving a collection agency can range anywhere from 10 percent to 50 percent. And, of course, they are not always successful in collecting full payment from the patient. So, if you hire an agency with a reasonable collections record of 70 percent and you turn over $10,000 worth of accounts receivable with a fee of 25 percent, at best you would only collect $5,250.

There are also soft costs of billing and collections. First, it can have a negative impact on your relationship with the patient and possibly the referring physician. Plus, the most unpopular job for your team is making collection calls. This is a task no one likes to do, and can impact your team’s morale.

Focus On Patient Care, Not Collections

Instead of extending credit and having your team invest time in chasing patients for payments, you can put into place processes and payment options that allow you and your entire team to focus on more important functions such as patient care, attracting new patients and building your referrals network.

1. Develop a written financial policy. Having a written financial policy minimizes confusion and enables your team to offer only those payment options that are in the best interests of your surgical center.
2. Include a wide range of payment options that work for the patient and your surgical center. Make sure you offer patients enough choices so they can easily identify a payment option that works for their particular situation. Include cash, check, Visa, MasterCard and American Express and additional payment options.
3. Add a third-party financing program. You may want to consider adding a third-party patient payment plan as an option. With a third-party patient payment plan, you can offer no interest financing, which is especially popular during challenging economic times. Plus, with most programs, you receive payment in two business days with no recourse if patients are slow to pay or default.
4. Make sure all patients understand your financial policy. It’s important to let patients know all of their payment options as soon as possible. You may want to include a copy of your financial policy in your new patient paperwork and post it on your Web site. And, during the treatment fee discussion, use your financial policy as a visual aid to insure patients understand their payment responsibilities.

In this economy, patients are seeking solutions when it comes to paying for elective healthcare. It’s important to have a variety of payment options that are financially healthy for your surgery center, yet allow patients the flexibility of paying over time. So instead of making unpleasant collection calls, your team can spend their time improving the patient’s experience — resulting in happier patients and staff.

Rob Morris is vice president of marketing and new business development for CareCredit, a GE Money company which offers patients a personal line of credit for healthcare treatments and procedures. Contact Morris at rmorris@carecredit.com. To learn more about CareCredit click HERE.