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Even though high-deductible health plans (HDHPs) are now ubiquitous, many physician practices still struggle to collect patient balances.

In fact, 83 percent of physician practices with fewer than five practitioners cited slow payment of HDHP patients as their top collection challenge, according to the Black Book 2017 Revenue Cycle Management Survey. Their second biggest challenge, according to 81 percent of respondents: communicating patient payment accountability.

That’s a problem, considering that patient financial responsibility now accounts for one-third of healthcare organizations’ revenue, according to various estimates. Therefore, patient collections should be an area of continuous improvement.

Key areas of focus include financial policies and procedures, employee training, and patient engagement and communication, says Reed Tinsley, CPA, a consultant specializing in healthcare accounting. “Nine out of 10 patients couldn’t tell you what their copay or deductible is,” he says. “It’s incumbent upon the practice to educate the patient.”

Here are five expert-recommended steps that can help practices rise to these challenges.

Draft financial policies

A clear and reasonable financial policy is the first step in setting expectations with patients about their payment responsibilities. At Coastal Medical of Rhode Island, for example, new patients receive a copy of the practice’s financial policy as part of a welcome packet, says Marilyn Boichat, the group’s director of practice management. “When the patient checks into the office for the first time, we have them sign that they read and understand it,” she says. Patients who indicate they need further clarification are invited to come into the office and discuss the policy with the practice manager privately, she adds.

In general, the policy explains what patients are expected to bring to every visit, such as their insurance card and identification; their responsibility to contact their health plan about specific coverage questions; and that payment is due at the time of service unless alternate arrangements, such as a payment plan, have been made.

Coastal also offers a prompt payment discount for patients who choose not to use health insurance, she says. The discounted fee cannot go below the Medicare allowable and is due at the time of service. “For patients who have a hardship [out of their control], such as losing their job and their health insurance, we will discount the visit [further], and the patient is offered a payment plan to pay when they can afford to,” Boichat says.

In addition to having patients sign off on financial policies and posting them on the practice website, practices should consider placing hard copies of the policy in their reception area, says Ken Hertz, FACMPE, a principal consultant with the Medical Group Management Association (MGMA). “Particularly at the beginning of the year, when deductibles reset, it’s a good idea to make this information available for patients to review while they’re waiting to see the doctor,” he says.

Offer ongoing staff training

Inevitably, practice employees will encounter patients who are unclear about various insurance terminology, such as the distinctions among deductibles, coinsurance, and copayments, and how that translates to their out-of-pocket expense.

“If you want to collect the money that’s owed to you, you have to be willing to invest some time in making sure staff are trained to help, as a way of showing patients you care about them,” Hertz says.

It may not be feasible for employees to keep track of the nuances of all the various health plans patients carry, but they can and should advise patients on what questions to ask when they call insurers themselves.

“In other words, employees aren’t going to interpret patients’ policies, but they can explain terminology and provide guidance for reaching out to the payer,” he says. For example, employees could instruct patients to ask what their deductible is, how much of it they’ve paid for the current year, and to what services it applies.

At the very least, billers should be well-versed in understanding the ins and outs of insurance policies in general and common issues that can arise with payers, so that they can serve as a source of expertise for staff at the front desk, Hertz says. Ideally, front desk staff are trained to field these frequent questions or common scenarios.

For example, most health plans will cover one physical per calendar year. “If patients want to have it early, perhaps due to travel or another reason, our staff know to have them call their insurance company and ask whether the visit will be covered,” Boichat says. “What we don’t want to do is book it [prematurely] and have the patient get a bill.”

For staff to attain this competency, solid training is essential, experts agree. “It drives me crazy when practices hire new people and throw them into the fire without anyone sitting with them for the first few days,” Tinsley says.

Hertz agrees: “You can’t assume anything. You have to train, train, train. Remember, it’s about building good relationships with our patients. The result is that they’re going to feel much more positive toward us, and it’s going to improve our cash flow.”

Consider keeping credit cards on file

As HDHPs and other forms of consumer directed healthcare have grown in prevalence, so too have programs in which practices keep patients’ credit card information on file in a secure payment gateway that is PCI-DSS certified. This allows practices to charge and be paid for patient balances as they are incurred.

In 2009, when HDHPs were ramping up and the economy was sliding into a recession, Brandon Betancourt, MBA, implemented a credit card on file (CCOF) program at the pediatric practice where he was administrator - and has recommended it strongly ever since.

“The credit card policy states that all private paying patients must leave a credit card on file if they wish to be patients of our practice,” he wrote in a commentary for FierceHealthcare. “The practice would continue to send out claims to patients' insurance company and bill patients for their portion of the balance, per the insurance carrier's explanation of benefits. However, if we are unable to collect in full for our services after several attempts to collect, we reserve the right to process the patient's credit card.”

As an independent consultant, Betancourt now helps practices implement CCOF policies. Whenever transitioning to any new policy, practices should be prepared with an explanation, he says. “You have to anticipate that some changes might be a bit contentious, and train staff accordingly to make sure they can handle the issue.”

Beyond that, you must ensure that your practice is equipped with adequate cybersecurity to protect patients’ financial information, and that your policy complies with state laws and regulations, Hertz says. “Make sure that access to credit card information is very limited internally, and totally impossible externally. And notify the patient in advance of every draft being taken out or payment being made.”

Coastal Medical adopted a CCOF program last year after Boichat learned about it at a conference. She says that not only has it helped reduce bad debt, but also that patients have welcomed the convenience of not having to pay their bills manually.

Because insurance plans frequently change and credit cards expire, Boichat recommends making sure both are updated or verified as current at least annually as part of the check-in process.

Adopt helpful tools and technology

A few years prior, Coastal made a number of other changes intended to improve patient satisfaction, which ended up improving collections as well. For example, the practice added a kiosk to the waiting area so that people could check in on their own if there was a line at the front desk. “We really did it to improve the patient experience and our work flow process,” Boichat says. “What we didn’t realize was that the kiosk was collecting a lot of old balances.”

When patients checked in using the kiosk, the computer would remind them of their balances and give them the option to make a partial payment, she says. Most patients ended up paying off those old balances in full, a pleasant surprise to Boichat. Using tablets for patients to input their own demographic and insurance information can achieve a similar result, Betancourt notes.

Other useful times to remind patients of their balances are when patients call to make appointments and in appointment reminder messages, whether they be via voice, text, or email, she says. But perhaps the most powerful improvements have come with giving patients the ability to pay their bills online. This saves patients time from having to write a check and drop it in the mail. Plus, they can pay their bills from anywhere. “I’ve used the service myself and loved it,” Boichat says.

Don’t tiptoe around the money conversations

Finally, the cornerstone to making all financial policies and procedures effective is clear, up-front communication with patients.

“There’s always been the soft approach, which is the sign in the doctor’s office that says that copays are due at the time of service,” Tinsley says. In the age of increasing patient responsibility, he recommends upfront verbal communication. “Patients should know their financial responsibility before they even get in the car [to go to the practice],” he says. “With reimbursement continually going downhill, practices have to treat their office like a business, which it is.”

Practices shouldn’t feel the need to apologize for collecting patient balances, Betancourt says. “No margin, no mission.”

Goodbye, simple copay collection

Patients’ annual financial liability continues to rise. According to the 2018 Kaiser Family Foundation Health Benefits Survey, family premiums for employer-sponsored health insurance plans rose 5 percent from 2017 to 2018, with employees contributing an average of $5,547 toward a $19,616 premium. Meanwhile, annual premiums for individual coverage increased 3 percent, with workers paying an average of $1,186 toward a $6,896 premium.

According to the same survey, 85 percent of covered employees have a deductible in their plan, which averaged $1,573 for single plans, while 26 percent of all covered workers carry a deductible of $2,000 or more.