I’ve talked to hundreds, perhaps thousands of practice managers, billing managers, and finance executives in the thirteen years I’ve been in the healthcare payments industry. One of the questions I usually bring up is, ‘Who sets your payment plan policy?’
I suspect you know the answer I get 90% of the time. ‘Why, we do. Who else would?’ Or something close to it. It’s usually stated with a ‘that’s a stupid question’ tone or look on the admin’s face. So I dig deeper.
My next question is usually, ‘What is your payment plan policy?’ Too many times I’m met with a blank stare. Sometimes it’s ‘Whatever the doctor arranges with the patient.’ Or, even worse, whatever the patient says he or she can pay.
That last one may in some cases be compassionate. There are many folks that simply struggle to make ends meet. Kindness is appropriate. But, in many cases, that approach just makes your practice the victim of the patient’s laziness, bad attitude, manipulation, or outright lie. They have the ability to pay you, but just don’t care to.
How do you offer payment plans to patients who truly need them
while restricting them for those who just want to game the system?
How do you offer payment plans to patients who truly need them while restricting them for those who just want to game the system? Below are some ‘do’s and don'ts’ of payment plan policy making. They are good ground rules for effective payment plans.
Allow the doctor to make financial arrangements. Doctors are compassionate. They are focused on the patient’s health, not her wallet. It’s easy for a doctor to give breaks to patients who ask - saying no can be very uncomfortable. Use all your administrative clout with the doctor to convince him or her to delegate discussions about payment to you or the appropriate person in the practice. Give the doctor something to say in response like, ‘I’m just the doctor, I leave all those discussions to the professionals. You’ll have to talk to Shirley (the administrator) about that.’ Or whatever best suits your doctor’s style.
Allow the patient to dictate what he or she can pay. Never begin by asking what the patient can afford to pay. Asking may sound like a kind approach, but human nature says the patient will go for the lowest amount he or she thinks you’ll accept. Asking the patient is allowing him to set the payment plan. Instead, see the first suggestion under the ‘do’s’.
Allow the patient to commit verbally without automating a payment method. Patients forget. Getting a verbal commitment and then waiting for the patient to send a check can be frustrating to both practice and patient. Make sure you have an automated way to deduct the payment amount from his or her checking account or credit card without him or her having to do anything else.
Set firm time frames for the repayment of specific money amounts. Have a payment plan policy and publish it to your patients. Then stick to it. Use a sliding scale if needed. Give longer payback time for higher balances. But make sure these terms are clearly communicated.
Have a financial discussion with the patient at the earliest possible moment. Every patient deserves to be educated about potential balances after treatment. It’s just the right thing to do. Even if a practice needs to hire someone who’s sole responsibility is having financial discussions with the patient, they should do it. This discussion should include a full review of the payment plan policy and an honest review of the patient’s ability to pay the projected balance.
Demand a credit or debit card-on-file for every payment plan. This goes back to automating the commitment. Without a firm way to collect the amount the patient committed to, you really have no agreement. It would be like Netflix signing you up for services without obtaining any firm way to be paid. If Netflix continued to provide services, like doctors usually do, without demanding payment or getting a sure way to be paid; how many people would pay their Netflix bill on time, or at all? Verbal commitments are only as good as the financial instrument used to back them up. Get a card-on-file or an automated ACH so you have control.
These simple ‘rules of thumb’ are the foundation for a good payment plan strategy. Use them to the best of your ability in your practice and you will begin to get your patient A/R balances under control, patients will respect your guidelines, and your staff with appreciate knowing the boundaries.