Medical practices prefer upfront patient payments because of the challenges of collecting overdue balances. Not only that, but upfront payments have become necessary due to the ever-increasing operating costs of the average medical practice. Unfortunately, collecting patient payments upfront can be difficult, as the barriers to upfront payments are numerous. Still, there are several steps you can take to secure payment from patients at the time of service, and we will cover them all in this article.
Write an Upfront Payment Policy
If your practice doesn’t already have a policy requiring upfront patient payments, the time to draft the policy is now. A payment policy will let your patients know about your practice’s financial expectations.
The policy should cover each of the following topics:
- Who is responsible for paying medical bills – For patients with insurance, the patient is responsible for copays and charges left over after their insurance pays. Patients without insurance are responsible for the total amount of the bill.
- When payments are due – Specify that payments (deductibles and copays) are due at the time of service.
- What happens if payment is not received – The policy should let patients know what actions the medical office will take if payment is not received upfront. The most common and effective sanction is sending overdue invoices to a collection agency.
- Ways that patients can pay – Inform patients of how they can pay (credit card, debit card, checks, etc.).
Inform Patients of Payment Expectations
Encouraging patients to submit payments upfront takes a bit of effort. Below, we’ll tell you how to inform patients of payment expectations.
All you may need to do for existing patients is send out an email with the payment policy changes (or a new policy if your practice didn’t have one previously). You’ll also need to be prepared to share a hard copy of the new policy just in case they didn’t read the email.
New patients should review and sign off on the new payment policy before receiving any care. This way, they’ll know exactly what to expect at your practice.
Check Patients’ Insurance Eligibility in Advance
High-deductible health plans are now standard, meaning that many patients must pay a copay or deductible for services. If your practice can determine a patient’s insurance eligibility and whether a copay or deductible applies, you can bill the patient upfront.
It’s best to check a patient’s insurance eligibility as close to the service date as possible since eligibility can change from one day to the next. Eligibility checks are painless with the right EMR system, particularly one that automatically checks eligibility. However, if you don’t have such a system in place, manual calls will be necessary to confirm the coverage.
Secure a Good POS system
Once your office determines that payment is due, you should collect the payment swiftly- this is where a Point of Service (POS) system comes in. A POS system not only enables your business to accept payments, but it enables you to do the following:
- Accept many payment types
- Take payments on the go
- Reduce the amount of paperwork necessary
If your office doesn’t have a POS system, it’s wise to consider obtaining one. There are many POS systems on the market with helpful features.
Above all, it’s important to remember that POS systems are not all created equally, and research will be needed to find the one that best fits your practice’s needs. Having a functional POS system in place ensures that your practice is prepared to accept payments quickly and efficiently.
Train Front Desk Staff
Since payments are submitted at the front desk, management should train the front desk staff to request upfront payments from patients. Without adequate training to implement the upfront payment policies, some patients may forego upfront payment and wait for your office to send them a bill.
Training the front desk staff can be as easy as having a meeting about payment request procedures. But in cases where new software and POS systems are being integrated, patient interaction processes may need to be revamped completely.
Front desk staff will need to know how to do the following:
- Determine patients’ insurance eligibility and whether they owe any money upfront for services.
- Communicate payment policies to patients at the time of service. In some cases, patients will need a refresher on the payment policy. Therefore, front desk staff should be able to inform patients of the payment policy without offending or bombarding them.
- Accept payments on the spot using the appropriate systems and processes. If it’s difficult to make payments to your practice, patients may not even bother. Ensure that your POS or EHR system can support a user-friendly payment process.
- Explain how insurance payments work. Patients who don’t understand how health insurance works may not want to pay for services upfront. Front desk employees should be willing and able to explain the basics of health insurance billing.
Benefits of Collecting Payments Upfront
You may have gathered that it takes some work to secure upfront payments from patients. But the time and effort will be worth it due to the financial benefits.
Below are two of the most substantial benefits of collecting patient payments upfront.
Reduction in Outstanding Debts
Requiring payment upfront has a direct effect on your accounts receivable balance. It reduces the amount of overdue funds your office may need to collect down the line. The longer a bill remains unpaid, the lower the chance it’ll ever get paid. Collecting payment at the time of service eliminates the need for recovery down the line in many cases.
Increased Cash Flow for the Practice
Patient payments make up a sizable portion of income for medical practices, so securing these payments upfront inevitably results in increased cash flow. These funds can be used to pay practice expenses, more personnel, better equipment, or other assets.
This article has provided you with several steps you can take to collect patient payments upfront. We hope that this information is helpful to your practice, enabling you to maximize your revenue and increase your profit margins.