How a clear patient financial policy will help increase patient collections

How a clear patient financial policy will help increase patient collections

Starting a private practice is viewed as one of the most rewarding accomplishments for a physician or medical professional. But with declining reimbursements and the mushrooming challenge of collecting ever higher costs directly from patients, providers are discovering that a clear patient financial policy is increasingly required to communicate your patients’ financial obligations and increase patient collections.

Everyone prefers clarity over confusion. The financial obligation a patient has with their medical provider should be no different. In fact, as reported by a Mayo Clinical Executive, 93 percent of patients who liked the billing process were satisfied with the clinical, whereas those unsatisfied with billing reported 63 percent satisfaction with their clinical care.

Run your medical practice like a business

When you frequent any business, you have a very clear understanding of the costs associated with the product and/or service you are purchasing. Medical services should be no different. A clear patient financial policy is designed to outline how your practice bills for care, and your patients financial obligations for services rendered. Medical school might not cover business planning, but providers who make private practice work are those willing to educate themselves about the business side of healthcare.

Following are a few considerations when drafting your patient financial policy:

  • Decide ahead of time if you’ll offer charity care, and if so how much. Don’t allow your non-paying patients to take advantage of your compassion.
  • Take the time to outline your expenses and expected income. Seeing it all in black and white can help you decide where you might need to make changes.
  • Clearly communicates expectations of your patients. This will help both you and your patients move forward in a sustainable way. And before you share your financial policy with patients, take the time to have it reviewed by a healthcare attorney to make sure you’re covering all the bases.

A healthy financial policy is one of your first steps to improving patient collections.

Clearly defining your patient financial policy will translate directly into simpler collections, fewer bad debts, and ultimately happier patients who keep coming back. Follow these rules to improve collections.

  • Your financial policy needs to strike a balance between clarity and compassion. If you’ve been historically lax on allowing slow pays or writing off bad debts, address this clearly, in writing. Find your weak points and address them proactively.
  • Median family practice overhead is around 50%, with physician salary and facility rental tending to be the two largest expenses. If you’re nudging higher overhead in your practice, it might be time to make some changes.
  • Build in a strategy to analyze progress at least annually, and more frequently especially in the beginning. Don’t wait until frustration makes you want to walk away from private practice entirely, and if you’re already overwhelmed, it might be time to hire a consultant and get some professional business input.

Execution of your patient financial policy and outlining your patients’ financial obligation.

The last step towards a clear patient financial policy is to properly communicate and execute it. This is probably the most difficult part, but it is the last step to ultimately increase patient collections and improve overall patient satisfaction.

  • Your financial policy needs to be clear, and comprehensive. You can use a template to help you get started, but make sure you personalize your policy so it still sounds like “you” to your patients.
  • Be sure to include:
    1. When payment is due,
    2. Who is responsible for payment
    3. How co-pay deductibles are handled,
    4. What forms of payment are accepted, and precisely
    5. How your practice handles non-payment.
  • Train all staff to be financially literate. and make sure they understand the importance of your patient financial policy and the direct impact of increasing patient collections.
  • Give your patients payment options. From phone payments to point-of-sale card swipe, EFT to mobile payment apps, your patients are tech savvy and used to technology to pay their bills. By giving them options and reducing paper billing, your patients will better understand their medical service bill, and will be much more likely to pay it.

By finding ways to clearly communicate your patient financial policy and have engaging conversations with your patients regarding their financial obligations you will not only increase patient collections, but you will also improve patient satisfaction. And we all know that happy patients pay their bills.

For an evaluation of your patient engagement policies, and ensure that you’re leveraging all the tools to connect with and communicate properly with your patients, contact Omedix today!

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