Unpaid patient bills are making up a growing portion of physician accounts receivable. Rising co-pays, deductibles, and enrollment in high-deductible health plans - combined with economic challenges - have made it harder for patients to pay their medical bills.
Traditionally, practices focused more on insurance reimbursements and less on collecting from patients. But as patient responsibility has grown, so has the need for stronger back-office collection strategies. Unfortunately, many patients delay or avoid paying medical bills, often assuming the balance will be written off.
Here’s a key insight: According to McKinsey & Co., once a patient leaves the office, physicians recover only about 50% of what’s owed—and just 10–20% if the patient is uninsured.
Steps to Help Improve Patient Collections
As patients take on more responsibility for healthcare costs, it’s critical to have strong collection practices in place. Here are key steps your practice can take to improve cash flow and reduce outstanding balances:
1. Verify insurance coverage before each visit.
This is especially important in times of economic uncertainty. Patients may lose coverage without realizing it—especially those relying on COBRA—leaving you to collect when they have limited income.
2. Establish a clear payment policy.
Post your policy at check-in and have new patients sign it at their first visit. Clear communication helps set expectations.
3. Use one fee schedule.
Offer discounts off that schedule when appropriate. For example, offer a discount to self-pay or out-of-network patients who pay in full at the time of service.
4. Collect co-pays and past-due balances at the time of service.
Train front desk staff to collect 100% of co-pays - clearly listed on patient ID cards - and request payment for past-due balances before or at the appointment.
5. Submit clean claims quickly.
File accurate insurance claims within 24 hours of the visit to speed up reimbursement. Even small errors can delay payment.
6. Move unpaid bills to collections promptly.
The longer you wait, the less likely you are to collect. Consider a two-bill policy, with a clear notice that unpaid bills will be sent to collections after 10 days. Allow payment plans through the agency if needed.
7. Be clear with self-pay and out-of-network patients.
Set expectations up front. If you don’t accept assignment of benefits, require full payment at the time of service. Staff must consistently enforce this policy.
8. Offer cash discounts.
It’s appropriate to provide a discount to self-pay or out-of-network patients who pay in full.
9. Provide payment plans when appropriate.
Especially for costly procedures, payment plans can be a reasonable option for self-pay patients.
10. Develop a charity care policy.
Clearly define:
- Who qualifies for charity care (e.g., low-income, uninsured, or underinsured patients), and
- How much charity care your practice can provide each year.
ACFAS understands your focus is patient care. But with patients responsible for more of their bills, open and proactive communication about costs is essential to protecting your practice’s financial health.