The Case for Automatic Payment Plan Technology at Physician Practices

It’s no surprise the number of patients on payment plans at medical practices has increased.

In an era of higher co-pays, fewer salary raises to keep up with costs, and a national joblessness rate that has barely budged in the last four years, fewer cash-strapped patients can pay hundreds or thousands right off the bat for procedures or services not covered by insurance.

In fact, data from the 2011 Trends in Healthcare Payments Report, conducted by healthcare technology provider InstaMed, reveals payment plans for healthcare payments has doubled since 2009. From the same report, 63 percent of surveyed patients said that they would opt for payment plans for their healthcare bills if given the option.

Additionally, CMS estimates 2012 patient out-of-pocket spending will equal hundreds of millions of dollars for professional services (e.g. physician, clinical, and dental). Thus, “the greater need for payment plans and securing payments at the point of service,” Brian J. Clubb, product director for healthcare technology provider Emdeon, told Physicians Practice.

But while most practices have payment plans in place to meet this demand, many of these plans lack appropriate security and involve a lot of administrative work on the back end.

“Many practices support payment plans by managing a calendar of when each payment is owed and calling patients to collect each payment manually,” InstaMed CEO Bill Marvin told Physicians Practice. “This method makes payment less of a burden on patients, but it adds to the practice’s administrative work. In addition, storing payment cards manually in a spreadsheet, calendar, or notebook increases a practice’s risk for payment card data breaches, which can lead to fines and reputational risks.”

Specifically, practices that don’t store credit card data in a Payment Card Industry or PCI-compliant manner run the risk of a data breach, which may result in large fines, bad publicity, and loss of business. In a nutshell, that means that all companies that process, store, or transmit credit card information must use PCI-compliant technology and processes. 

“Whether practices initiate the payment plan while the patient is in the office or after sending the statement, practices should use technology to securely collect and pre-authorize payment information when setting up the plan to automatically collect the payment when it is due,” said Marvin. “This saves hours of administrative work each week and ensures that practices will get paid.”

Fortunately, a growing number of vendors offer automatic payment plan technology - from software to cloud-based programs - tailored to the needs of physician practices.

When evaluating such technology, there are a number of factors should physician practices may want to consider.

First, physician practices should consider whether the technology enables them to collect payments for multiple locations using one system, said Marvin.

Also, the application must be user-friendly for both the provider and the patient. 

“Patients have higher expectations today in terms of consumer-friendly applications and web-based tools, such as mobile optimization tools,” said Clubb.

Providers should look for technology that will automate communications to patients prior to each payment transaction and give patients complete visibility into payment timing. This will reduce the number of patient phone calls received, said Marvin.

Finally, practices should consider whether the technology offers the highest level of payment card security. 

“It should be PCI Level One certified and encrypt payment cards at the point of interaction, where the payment card is swiped or card data is keyed in manually,” said Marvin. “The technology should be PCI certified, not just ‘compliant.’”