Significance of prompt patient balance collections is an ongoing discussion in the healthcare community. Although the financial impact of prompt patient balance collections on practice cash flow is not well understood, practices must understand their financial circumstances and the unique challenges they may face when it comes to prompt patient collections, and they should be able to identify the importance of collections from the perspective of both their own practice and the needs of their patients.
This article discusses the reasons why prompt patient balance collections are essential, the various approaches medical practices can take to meet their patient balance collection obligations, and what results in a late patient balance collection.
Reasons Why Prompt Patient Balance Collections Are Important?
Prompt collections play a vital role in the financial health of medical practices. This includes the revenue generated by collections and the increased number of patients who will return to practice because they are assured of effective payment model. The reasons why prompt collections are important can be broken down into several categories.
- It makes it possible for medical practices to give quality care to their patients. When patients receive care from physicians and other health care providers, it is often done so under the expectation that they will be paid for it.
- Prompt patient balance collection helps prevent future financial problems. Some medical practices may find it difficult to service their obligations to patients if they do not have enough cash flow to cover costs. If a medical practice does not have enough money to do so, it may have to reduce its services.
- It helps medical practices stay organized and on top of their debts. This can help them to be more competitive against their peers, and to provide better care to their patients.
- It allows medical practices to identify and correct errors on accounts receivable in time fashion. This can lead to fewer problems for medical practices. By catching mistakes early, medical practices can avoid issues with billing and collections, which can lead to reduced costs and increased efficiency.
- It provides medical practices with a sense of security about their future financial health. It helps them to identify areas where improvement may be necessary, and to make decisions about how best to allocate their resources.
For these reasons, prompt patient balance collections are important for medical practices. However, some healthcare providers find it challenging to collect balances from patients and thus, require a medical billing company to act on their behalf.
Approaches Medical Practices Can Take To Meet Their Prompt Patient Balance Collections Obligation
There are several ways that medical practices can try to meet their patient balance collection obligations. These straightforward yet efficient steps can be used to accomplish this goal.
Facilitate the Payment Method
The first step a private practice can take is to facilitate the payment method. The collection process for patient balances must be as straightforward as feasible to guarantee swift and timely balance collection. This can be accomplished by setting up patient-friendly payment systems and allowing various payment methods.
Clear Payments With Patients As Soon As You Can
Clearing your payments with patients as soon as possible ensures that your balance is collected on time. In addition to assuring prompt balance collection, this can help you avoid late fees, reduce the amount you owe on your account or reduce the need for calls or follow-ups with patients regarding transaction acceptance.
Getting Detailed Information About Patient’s Medical Insurance Protection
If you have questions about whether a patient’s medical insurance will cover a particular procedure or service, you can get detailed information about the patient’s insurance protection by calling the insurance company. This enables the patient to make the necessary preparations and reduces occurrences of resistance to paying off any remaining balances.
Address Payment Problems Immediately
Proactively notify patient of obligations, Upfront payment option, and payment plan option (installments). Early resolution of any questions regarding medical billing, will provide the patient more time to plan for making any required payments.
Use a Trusted Medical Billing Software
One way to meet patient balance collection obligations is to use a trusted medical billing software. Medical billing software can help physicians and hospitals track and manage patient balances, as well as generate bills and invoices. This can help ensure that patients are paying in a timely manner and that any outstanding balances are cleared.
What Resulted in a Late Patient Balance Collection?
A medical practice’s success is no longer just based on how well patients are treated. Practices must concentrate on the financial parts of their business to increase earnings and maintain their performance. The patient balance is a significant part of the revenue generated by the medical practice, and the balance represents the money collected from the patient’s payment. There are many factors that can cause a medical practice to be late in collecting the patient’s balance.
Let’s discuss the following important factors that can contribute to late patient balance collections:
Insurance’s Claim Acquittal Process
The patient’s payment processing is the first to be examined if the medical practice cannot collect the patient’s balance. The medical practice can often determine whether there are payment processing problems by simply looking at the number of outstanding balances for the practice.
Payment processing problems usually include Incorrect insurance information, incorrect date of birth, services not covered by insurance plan, patient leaving the network with no out-of-network benefits, late filing of claims, lack of claim follow-up and appeals, lack of approvals, lack of certifications records, lack of benefits, and lack of timely submission of information required by insurances. And the best part: The billing company will ensure this will be taken care of.
Number of Patients the Medical Clinic Is Treating
Patients with unpaid balances will make up a sizable portion of a medical practice’s patient population. This may cause several patients to make late payments, which will significantly impact the Revenue Cycle Management of any medical practice. To prevent this, the practice must have an efficient billing system, which will help avoid patient accounts from being dormant.
In some circumstances, the root cause is software glitches or errors, such as inaccurate data entry or erroneous patient data balance calculations. However, the issue arises in other cases due to the patient’s behavior, such as not sending payments on time or paying bills after the due date.
Insurance Health Plan
The majority of patients are insured. Many patients maintain many policies; some have primary and secondary health insurance plans. The various insurance policies coverage can occasionally have limitations. So, it is essential to go over matters like insurance and costs with a patient before consultations or medication.
However, if the practice and the patient don’t have a clear understanding of the patient’s insurance health plans and deductibles, it could cause unnecessary difficulty and make them reluctant to pay any medical expenses.
Costs Incurred By Practice
The impact on patients has received the most attention while discussing medical insurance limitations. But healthcare professionals have also been impacted by this problem. You should anticipate a change in the deductible to insurance reimbursement ratio to have an ever-greater impact on your practice.
The sources of income are changing as patients are held more accountable for covering healthcare bills. Therefore, it is unrealistic to believe that your practice will be able to survive just on healthcare reimbursements.
Final Thoughts
Promptly managing the patient balance is a responsibility that goes beyond the medical care provided by the practice. Effective patient balance management requires thorough patient care plans. These plans must be followed consistently by the practice and they need to clearly outline a patient care plan that details each service or procedure performed and when the patient is expected to pay for it.
These plans can include the patient’s bill, copay, coinsurance, deductible, and total cost. If you have patients that are overdue on their balances, then the amount owed should be billed. Receipts must be maintained and tracked carefully.
FAQs
Q1. Why prompt patient balance collections are essential at the time of service?
Ans: Collecting payment owed from patients at the time of service offers various advantages to practices, including a reduction in accounts receivable, an increase in cash flow, a decrease in back-end collection costs, and a reduction in the overhead expenses of tracking and writing off bad debts.
Q2. What is a patient’s outstanding amount in medical billing?
Ans: There seem to be three processes for patient’s outstanding amounts in medical billing depending on their health insurance plan:
Copay:
A copay (or copayment) is a fixed price paid when service is rendered, such as at the doctor’s office. If you are sick and go to the doctor, the money you pay toward your treatment is known as your copay.
Deductibles:
Deductibles are the flat amount yearly of medical bills you must pay out of yourself before insurance starts to cover the rest. For example, if a provider’s fee is $100, but the maximum insurance payment depending on your deductibles, is just $70, the remaining $30 will be your responsibility.
Coinsurance:
Coinsurance is the amount you are responsible for paying after meeting your deductibles for a covered medical procedure. For example, let’s say the $10,000 cap is allowable expenditures. The first $2,000 would be your deductibles, and you will pay 20% of the remaining $8,000 ($1.600) as your coinsurance. So, the total amount you will be paying would be ($2.000 plus $1,600) $3,600.
Q3. What are some effective methods for collecting patient accounts?
Ans: Following are the steps for effective methods for collecting on patient accounts:
- Inform patients of the financial implications.
- Determine whether patient payments will be expected to be made in full at the time of service.
- The third objective is to simplify the payment process for patients.
- Propose a payment schedule and maintain follow-up collecting calls after each appointment.
- Have good billers on hand or consider outsourcing to a medical billing company.
Q4. What negative effect do patient billing and collections have?
Ans: Negative effects on cash flow and disruption of administrative operations are two side effects of unpaid or late patient bills, making collections a significant burden for healthcare providers. Unexpected medical bills, missing payments, and frustrated patients result from a lack of pricing transparency and poor communication between patients and providers.
Q5. What is a time-of-service collection? And what is a point-of-service collection?
Ans: Collections at the time of service (Time-Of-Service collection) include the current visit’s costs and any past-due balances from previous appointments.
Medical facilities and physicians may refer to Point-Of-Service collections as “upfront,” or “front-end” billing. Participating providers in POS collections often need the payment for an anticipated service before it is given, but by the moment a patient is released or leaves the practice.