Creating Effective Patient Payment Plans

1. Diagnose the Problem.
   How many patients owe you “big” money?  Who are your patients on a payment plan?  Are they keeping their arrangements?  Run an A/R report by patient and sort it by balance high to low.  Offer patients with high balances a payment plan.  Additionally, be sure your practice management system has the ability to produce a report indicating which patients are on a payment plan – this is usually through the collections module.
   
2. Assess Your Fee Schedule. 
   The truth is, many practices’ fee schedules contribute to the patient’s inability to pay their bill.  Fees are set too high – meaning that no insurance company is paying that amount, much less an uninsured patient.  Compare your fees to Medicare rates and your top insurance contracts.  Set your fees at a consistent multiplier of Medicare slightly above what your best insurance contract is paying.  Keeping your fees in check and reasonable will help your self-pay patients.
   
3. Set Up Discount Options for Self Pay Patients. 
   It is customary to offer a 10%-30% discount to self pay patients who pay at the time of service.  Remember your fee schedule needs to be reasonable (no 20x Medicare) in order for this to help your self-pay patients.  It is also customary to offer charity care to patients who lack the financial means to pay.  Establish a charity care protocol and have patients complete an application demonstrating their inability to pay.  Having a policy that is consistently followed will protect the practice – no more writing “no charge” across the top of the encounter form/superbill.
   
4. Adjust Fees and Give Discounts Correctly. 
   Proper adjustment codes in the practice management allow for accurate tracking of discounts given.  Under no circumstance should a fee be reduced.  Rather, the fee remains at the fee schedule amount and an adjustment is posted for the difference.  For example, an office visit is $200.  A self pay patient receives a 25% discount and pays $150.  The $50 adjustment is posted to “Self-Pay Discount”. 
   
5. Use Technology to Enforce Payment Plans. 
   The most efficient way to set up a patient payment plan is to agree on an amount at a regular interval (bi-weekly or monthly) and then set up recurring payments so that the patient’s credit card, debit card, or checking account is automatically charged for the agreed upon amount.  The old way of a patient saying “yes, I’ll pay $50 a month,” then your office sends a statement each month, is not effective.  Historically, there has been no way to track those patients and it’s costly to keep mailing them a statement every month and hope they pay their bill.  Check with your credit card vendor about recurring payments or check out Solveras Payment Solutions www.solveras.com.  Another solution is RealMed’s RealAssure program (www.realmed.com). After a patient visit, RealAssure determines the estimated patient liability.  The patient then provides payment information and authorization to pay up to the maximum shown in the estimate.  Payment plans can also be set up. 
   
6. When All Else Fails, Use a Collection Agency. 
   The cost of outsourcing to a collection agency is usually pretty significant, the fee ranging from 20%-50% of what the collection agency collects.  However, there are times when patients simply will not pay their bills and the use of an outside party is needed.