6 Most Well Guarded Secrets About Payment Plans
The patient payment plans represent the fastest-growing share of hospital receivables today. As healthcare providers rely more on patients for revenue nowadays, many large healthcare practices have started using patient-centered strategies, like payment plans, to collect payments. Here is the importance of payment plans in revenue cycle strategy and the best practices in place.
6 Best practices For Payment Plans
1. Automate Payments for increased revenue
A lot of providers support payment plans by managing a calendar of when each payment is owed and calling patients to collect each payment manually. This method makes payment less of a burden on patients, but it adds to the provider’s administrative work. Plus, it still does not ensure payment for the provider. Whether you initiate the payment plan while the patient is in the office or after you send the statement, securely collect and pre-authorize payment information when setting up the plan so you can automatically collect the payment when it is due.
2. Derive a payment parameter and stick to it
It’s great to give patients some flexibility and choice in how much they pay each month, but make sure to set parameters and stick to them. We recommend charging a minimum monthly payment of $100 or requiring that the bill be paid in full within 12 months.
3. Establish a correct payment policy
Payment plans are great for patients who are unable to pay the full bill at once but don’t allow payment plans to become a way for patients to put off paying you. Establish a policy that patients must pay a certain percentage of the bill before setting up a monthly payment plan.
4. Automate Communications regarding payments prior
Even when a patient authorizes automated monthly payments, he or she still may forget about the payment until it shows up on the next bank statement, which may create confusion. Improve communication and offer payment transparency by automating email notifications to patients before each payment transaction. The right strategy to achieve it is to provide a FAQ section for patients explaining how your payment plans work. It should include details like payment timing, notifications, and payment card security.
5. Offer Payment Plans for Patient to Pay their Bills
Many times a patient simply can’t afford to pay an entire medical bill at the time of service. This is especially true for episodes of care that may include surgery, specialists, or overnight hospital stays. Often these expenses are unexpected and can cost up to hundreds of thousands of dollars. Coupled with a high deductible health plan or out of network expenses, the majority of Americans aren’t financially prepared to handle a large unplanned medical expense.
Putting a patient on a payment plan significantly increases the chance that a bill will be paid, due to the simplicity of charging the agreed-upon amount each period, automatically. No additional work is required of the patient or provider, as payments are collected, processed, and posted until the balance is paid.
Usually, there are three main types of payment plans to offer patients which include installment, recurring, save on file.
Recurring Plan: Use “recurring” plans to collect payments at a regular, ongoing interval for a subscription service.
Installment Plan: Use “installment” plans to collect payments against an outstanding balance, and deactivate the plan automatically when the total balance is paid.
Save on File Plan: Use “save on file” plans to save a patient’s payment card on file to collect the remaining amount owed when the claim is adjudicated. For example, a save on file plan is useful when the patient’s payment responsibility is unknown during the patient visit if the patient has a high deductible.
6. Self-service payment methods
In the future, the chances are high that the self-service payment methods will represent the majority of patient payments, even large ones that may require a payment plan. As long as you have predetermined your parameters for payment plans according to your business rules, many software tools allow patients to manage payment plans online. Offering comprehensive self-service payment methods allows patients who simply want to pay and be done to quickly resolve their balances online, and allows you to focus on patients who need the most assistance navigating the billing process.
If you want to avoid lost revenue and increase patient satisfaction, be clear with the best practices mentioned above for payment plans because this will help you to maximize your revenue and achieve potential success in the healthcare marketplace. Contact CapMinds today for effective billing solutions.