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There are many aspects to the success of a medical practice: quality of diagnosis and treatment; the care and attentiveness of nursing and support staff; and, the efficiency of administrative operations, to mention a few. But without successful collection of patient receivables, even the most caring practice can be in financial jeopardy.
More and more practices are getting a grip on collecting co-pays at the time of service. In too many cases, however, the ball is dropped when deductibles and uncovered services are eventually determined via patient explanation of benefits (EOBs).
Traditionally, practices spend $5 to $10 to send out a statement, which includes preparing invoices, stuffing envelopes, postage, and associated staff wages and overhead. Just as traditionally, these statements wind up at the bottom of your patient’s bill pile. And then the process repeats itself…two, three, four times, interspersed with phone calls from your staff. By now, the cost of collection has escalated to $50 to $75, often with no end in sight. Those bills that are excessively aged are either written off, at a total loss, or sent to collections, where 30 to 50 percent of funds collected (if they are, indeed, collected) are lost, as are many of the patients involved.
The Need for a Quantum Change in Collecting Patient Receivable
A wise man once said, “If you keep doing what you’re doing, you’ll keep getting what you got.” In this case, that amounts to a six-figure deficit. When this is combined with mounting administrative expenses and the frequent loss of personnel frustrated with the pressures of bringing in revenue, that cost grows exponentially.
Last year (see The Medical Bulletin, March 2007: “EasyPay: An Accounts Receivable Solution to Consider”), we introduced EasyPay. Since its inception, thousands of practitioners have begun using EasyPay. In the process, we have been asked many questions about key aspects of the program. Following is a summary of the most frequently asked questions.
Isn’t EasyPay just like a credit card machine?
EasyPay is a software-based solution installed in one or more of your office computers and includes a USB credit card swipe. Yes, EasyPay does everything your current terminal does, but it allows for the next giant step in patient collections: with the consent of your patient, it automatically debits their credit card account when their EOB arrives. Funds are at your bank in two business days. And the patient can be notified by e-mail the day the debit occurs. In other words, EasyPay reduces patient receivables; terminals don’t.
What if the amount due is large?
With EasyPay, each practice has the flexibility to spread payments into equal monthly installments. Such arrangements can be made on a case-by-case basis or a standard formula can be used.
Do patients offer resistance to this form of payment?
Most practices succeed in signing up 80 percent and more of their patients. The most common resistance comes from elderly patients who are naturally suspicious of electronic payments. The next tier of opposition comes from patients who probably don’t plan to, or know they cannot pay at all. Acceptance of these patients then becomes a professional/ethical/business decision. The remaining 20 percent of non-participants generally includes the small number of pro bono cases most practices expect.
How can I overcome resistance?
Some thoughts on patient resistance:
- All new patients must complete a plethora of forms; EasyPay should be included among these forms and described as your office policy.
- Frequently, patients will ask why you can’t just bill them, as on previous visits. Your response is: “We are striving to maintain our fee structure at its current level. To do this, it is imperative that we cut the high cost of patient billing and collection. Your deposit or credit card information will help us achieve this goal.”
One other common front-desk approach to signing up EasyPay patients:
- “We will be happy to file your insurance claim and collect on your behalf. However we estimate that your co-pay/deductible for today’s visit will be $____. We need to collect a deposit for this [ITALS]now[END ITALS]; or if you prefer, we can take your credit card information, which we will keep in our secure system, until we can calculate the exact amount owed. At that time we’ll process a charge on your account.”
Moreover, there are several key things to remember:
- During the first six months of each year few patients have fully paid their deductible.
- More than 75 percent of all consumers have made a credit card payment at their provider’s office in the past year.
- Auto-credit card debit is an increasingly common way for consumers to pay for services (e.g., AOL, EasyPass on toll roads, etc.).
- Credit card statements are a convenient way for consumers to track annual medical expenses.
- Most patients have “free miles” credit cards and will appreciate another location to earn rewards.
What about front-desk resistance?
It is not uncommon for front-desk personnel, especially those who have been on the job for some time, to view EasyPay as “unnecessary change.” Staff meetings to describe the need for and value of EasyPay are common, but alone rarely result in full support. One proven approach is to offer staff $5, paid in cash each day, for each EasyPay patient they sign up.
Some doctors have initially thought this to be excessive, and wonder how long it must go on. In reality, avoiding just the first patient billing saves a practice more than twice that amount, not to mention the time and cost of future billings and loss revenue.
Summary
Health insurance costs have risen more than 10 percent per annum since the turn of the century. To afford these payments, employers have increased the share employees pay, mainly by increasing deductibles. What that means to you is that your outstanding patient receivables will continue to spiral. Unless you begin controlling this, your practice and income will also continue to suffer.
Terry Koepsell is President of Preferred Payment Solutions, Inc. For more information or reprints of the 2007 Medical Bulletin article, call him at 1-800-733-1553.
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