As more patients manage their healthcare costs by choosing plans with large deductibles, the number of people who pay out of pocket is increasing.
The average deductible for the least expensive Obamacare health plans is now $6,000 for an individual, and over $12,000 for a family. Even traditional PPO (preferred provider organization) health insurance is becoming more expensive: In 2017, the average individual deductible in a PPO increased by 8 percent over the previous years, and the average PPO family deductible went up by 9 percent. As a result, you're increasingly in the position of collecting directly from patients, rather than from insurers. A discount for self-paying patients, especially if they pay promptly, can help buffer your organization from a challenging payment landscape.
Statistics Favor Self-Pay Discounts
The hard numbers suggest that self-pay discounts are a good fiscal choice. According to 2017 figures published in Becker's Hospital Review, "The more patients owe in out-of-pocket costs, the less likely hospitals are to collect their payment." Even a modest decrease in the amount billed can result in better compliance: The figures show that 4 out of 10 self-pay bills below $1200 are paid by patients, whereas only 17.6 percent of bills between $1201 and $1450 are paid.
Here are 7 tips to keep in mind, to make the receivables management process as cost-effective for your practice as possible, while nurturing the relationship you have with your patients:
1. Make sure the patient is accurately self-pay
Today's insurance environment is highly complex, and there are numerous potential sources of confusion. A proactive registration and pre-authorization process can identify unexpected resources, such as eligibility under expanded Medicaid programs.
2. Conduct pre-authorizations when needed
In some cases, insurers have to authorize a procedure before they're willing to pay. Neglecting this step can turn an insured patient inadvertently into a self-pay patient.
3. Be clear up-front
"A well informed patient is more likely to meet their obligations," according to health care executive Brian Sanderson. "It's just good patient relations and it helps to minimize bad debt."
4. Approach patients in a collaborative manner
You and the patient are solving a problem together. Let patients know that both of you have the same ultimate goal: to make sure they get the care they need.
5. Reach out to the patient via their preferred channel
Your organization needs the capacity to use all allowable methods of communication (text, email, phone call, and/or printed statement). This is just an extension of good manners, and it will make the patient feel that their preferences are respected. It is also valuable to have an online payment portal that's intuitive and easy to understand.
6. Check with an attorney
Before instituting discounts that are available to self-pay patients and not to insurance company payers, it's important to make sure you're in compliance with laws and insurer policies. Many payers require that they are billed at the lowest price level.
7. Stay consistent
Prompt pay discounts have a high likelihood of going sideways and hurting cash-flow if you are not consistent with your prompt pay period and payment terms. If your discount period is 30 days, then stick to it. If you go outside of this window you run the risk of sending your patients the message that they can receive the discount at any point in time. Same goes for payment arrangements. Payment arrangements are great tool to provide services at an affordable price, but offering a payment arrangement on top of a discount defeats the purpose.
Handled correctly, offering discounts for prompt payment is a good bet for a positive outcome when providing services to self-pay patients. Prompt pay discounts can help motivate people to leverage the resources available to them. Many patients are interested in fulfilling their obligation, but simply don't have the funds available to come up with the entire amount due. The provider receives accelerated cash flow, and the patient receives a discount for paying early - a win win for both parties.
Tavelli Co., Inc. has over 37 years of unparalleled experience in the debt collection and receivables management industry. Our mission is to achieve the right balance between getting clients paid and being empathetic to debtor circumstances, through implementing innovative practices, hiring experienced people, and improving business decisions through analytics. We provide peace of mind to all involved by collecting money with no complaints. Tavelli Co., Inc. takes the time to carefully listen to your customers and share their feedback with you through meaningful data and transparent communication, so you have access to the information you need to make quality decisions and improve your processes in the future. Contact us today and let the debt collection experts at Tavelli Co., Inc. help you set your business up for success.
IMPORTANT: Information provided by Tavelli Co., Inc., any employees of Tavelli Co., Inc., or its subsidiaries is not intended as legal advice and may not be used as legal advice. It is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel.