"Doctors Are Not 'Only Out to Make Money.'"
At the end of 2013, an article by Dr. Harriet Hall concluded that, “The accusation that doctors are motivated solely by money is demonstrably untrue. Most doctors are committed to doing what is in the best interests of the patient, regardless of the effect on their income.”
Dr. Hall stated that doctors are people who go into medicine because they want to help others. Most are motivated by the desire to treat illness, provide care, and enable patients to have a high quality of life. In fact, the apparent contradiction of medicine is that doctors are constantly doing things that tend to decrease their business. They recommend vaccines, write prescriptions and order tests or screenings that are inherently designed to make patients feel better – which means they don’t have to see a doctor as often!
In fact, though, doctors do deserve to be compensated for the services they provide. You spend years of your life in medical school and follow-up training, incur huge student loans to pay for that education, and then invest money in starting and running your private practice. You want to build a solid patient base, and provide great care, but how can you do that if you are not able to rely on a continuous revenue stream?
Doctors routinely face the conundrum of how to receive payment in full for their work, without upsetting patients to the point where they leave the practice. This article focuses on creating a strong patient-payment balance in your independent practice.
The Dangers of Not Receiving Timely Payment for Medical Services Provided
“Rule No. 1: Never Lose Money”
~Warren Buffett
Warren Buffett is certainly a man who knows a thing or two about making money. His business acumen and noted appreciation for the value of a dollar have propelled him to the top of many “most wealthy” lists. He does not believe in providing services without getting paid, but that often seems to be the prevailing thought in the medical arena.
There are some startling statistics about the level of medical debt and its impact on personal healthcare choices:
- One in four Americans have trouble paying medical bills.
- One in three patients have delayed medical care because of the cost.
- 21 percent of adults ages 18 to 64 have not undergone a medical test or treatment that was recommended by a doctor because of the cost. (Kaiser Family Foundation/New York Times, 2016)
- 32 percent of adults ages 18 to 64 have postponed getting medical care they need because of the cost. (Kaiser Family Foundation/New York Times, 2016)
- 40 percent of adults ages 18 to 64 have relied on home remedies or over-the-counter drugs instead of going to a doctor, because of the cost. (Kaiser Family Foundation / NY Times, 2016)
Higher insurance deductibles and the increase in patient co-pay or out-or-pocket responsibilities have contributed to the increased amount of medical debt. Many patients report not being able to pay their hospital bills in full, a situation which became even more exasperating during the COVID-19 pandemic.
While a large medical center or hospital may be able to write-off uncollected bills, or absorb those lost fees by raising prices, a private practice does not have that luxury. It may seem like small amounts that are due from patients, and perhaps you might think that the collection effort is not worth the cost, but not being persistent in recouping all outstanding amounts can cause a major drain on your practice.
If you have just 1000 patients that don’t pay $50, that is a “lost income” of $50,000 for your independent practice. That dollar figure represents time that you and your staff invested in providing care. It also means you might not be able to meet your own financial obligations. And it definitely means you can’t accurately predict your revenue flow, so you won’t be able to confidently plan for the future growth of your practice.
Contrast these uncertainties against the possible loss of a few patients, or the costs to collect outstanding payments, and you will see that there is a benefit to adhering to Mr. Buffett’s rule about never losing money. Best of all, it is possible that a better focus on a clear payment process could strengthen your patient relationships and help your practice to grow.
How to Place a Focus on Payment without Alienating Patients
“Physicians are intrinsically motivated to do their best for patients.
With the right combination of leadership, resources and a mission-driven spirit, they can and they will.”
Uncollected patient financial obligations can result in bad debt spiraling out of control for your private practice. Avoiding this debt-spiral requires a three-pronged effort: The first, and most important, step is to bill completely and properly for all services provided. Secondly, your independent practice needs to get its full measure of reimbursement from government and insurance services. Finally, you need to collect the remaining balance of payments due from patients in a professional and timely manner. Tips to improve the methods you use to collect money from patients include:
Gather Accurate Information Upfront
Sometimes the devil is in the details. Wrong addresses, misspelled names, and outdated insurance information can doom your billing process before it even begins. In this day and age, patients change jobs, retire, and switch healthcare plans almost as often as they visit your office. During the past year, more people signed up for coverage through the Affordable Care Act. Some of these plans have high deductible structures that your patient might not fully understand. It is imperative to obtain accurate information at each and every visit, so time is not lost in following-up on the details. Technology-enabled financial clearance strategies can enable your practice to complete all the necessary pre-registration steps prior to the patient appointment, including verifying demographic and insurance information, eligibility authorizations, and payment estimates. Office administrators receive real-time views into each patient’s financial clearance status, and can ensure all information is collected, including any balance owed from previous services.
Explain Billing Practices Better
Patients have no idea what medical billing practices are, especially if they deal with a number of providers and services. Document your system and payment expectations on your website. Have internal signage that explains your process and have front office staff explain the steps more clearly as part of the check-in/check-out process.
Collect Payment at the Time of Service
Once the patient is out the door, it becomes infinitely more difficult and expensive to collect money. Except in the most serious of circumstances, many practices are beginning to institute a “No Payment, No Appointment” policy. Collect a larger portion of more payments at the time of service, and you will reduce your collection needs later.
Document All Services and Time
Today’s state-of-the-art Electronic Health Records (EHRs) can provide a great deal of assistance in making sure your practice accurately bills for all services provided. It is especially important to keep track of time involved with the increased use of telehealth services. When you sign a note in Amazing Charts, for example, an electronic superbill is automatically generated and stored for billing.
Reduce Coding Errors
The importance of your Medical Billing Service to resolving payment issues cannot be understated. With Amazing Charts, your private practice could experience an increase in collections, a higher rate of claims paid on first submission, and a quicker time to payment with your payers and patients. Clients have realized up to a 20 percent increase in collections, 95 percent of claims paid on first submission, and an uninterrupted cash flow.
Deal With Payers Quickly
Payers are a huge clog in the payment process. Late claims, denied claims, and claim revisions can all lead to patient frustration and uncertainty as to exactly how much money is owed. Submit your claims as quickly as possible, and follow-up to resolve any disputes, so you can get a correct bill for the balance due to your patient.
Submit Understandable Patient Bills for Outstanding Payments Due
Whether purposely designed to be confusing, or just an offshoot of an automatic billing system, most medical bills end up being simply incomprehensible to patients. Add that to the equally confusing Explanation of Benefits (EOB) some patients receive, and it’s no wonder they are slow to pay.
Improve Electronic Billing Capabilities
A Medical Economics article on collecting patient debt cites a Deloitte Survey of U.S. Healthcare Consumers, which found that 70 percent of respondents would prefer to get their healthcare bills in digital form. Unfortunately, 87 percent of all healthcare bills at that time were sent to patients in paper form (and we suspect this number is still quite high). The article also states that the Medical Group Management Association reported that as many as 3.4 paper statements must be issued before any payment is received. More than being simply "old school," paper bills are at odds with consumers’ preferred digital behaviors. The manual bill paying exercise has been replaced by online bills that, once opened and understood, get paid immediately. More patient portals make it possible to make and receive digital payments prior to an appointment.
Have an Automatic Payment Plan Option
Patients might not be able to pay the full amount due, but they might be able to make regular payments in smaller amounts. Have an option available that includes a small financing fee, where they can arrange to have their bank automatically make regular payments, so they won’t have to remember to write a check each month. This option should be agreed to in writing, with consequences for late or missing payments clearly spelled out.
Simplify the Billing Statement
In addition to making the switch to electronic billing, look for a solution that aligns charges with the EOB and makes it perfectly clear what has been charged and paid, and who owes whatever remains. Eliminate billing statement confusion, and patient willingness to pay will increase.
Follow Up More Efficiently
Use modern digital methods to communicate with patients regarding outstanding balances. Many companies now send text or email (or both) messages when a bill is created. Use electronic billing options and allow patients to pay online to reduce manual labor by your staff. Mention any unpaid balances as part of your appointment-setting process.
Continuously Educate Your Team
Make sure all members of your team are aware of your billing practices, as patients don’t just complain to the billing staff. Keep your billing team especially updated on your policies and provide frequent training as to how they can better interact with patients in a friendly, but firm, manner on billing issues. Perhaps you can even role-play or develop some scripts that will help to resolve the most difficult scenarios.
Resources for Managing Patient Payments
The American Medical Association offers a number of resources to help physicians manage patient payments and maximize efficiencies in the collection process, including:
Point-of-Care Toolkit
Collecting amounts due from patients at the point of care (POC) helps to reduce accounts receivable, increase cash flow, and reduce medical billing and back-end collection costs, thereby decreasing your administrative burdens of tracking and writing off bad patient debt.
Maximizing Post-Visit Collections
If payment is not received at POC, it is still important to implement an effective plan for the collection of payment after the patient has left the office.
Practice Management System
Your private practice can improve its efficiency and reduce costs by utilizing practice management system software that automates a significant number of revenue cycle functions.
Healthcare Technology Solutions Designed By and For Independent Practices
Amazing Charts was founded in 2001 by a practicing family physician to help medical practices thrive. We have grown consistently since then by creating easy-to-use solutions for delivering patient care. Today, we offer a variety of additional capabilities designed to help independent practices succeed, including Electronic Health Records, Practice Management, Billing Services, Population Health and Remote Care. Call 866-382-5932 to learn about our products, schedule a practice consultation, and learn more about solutions and services that can help your independent practice grow.