As partners in ensuring the financial health of your practices, we understand the importance of balancing quality patient care with effective revenue management. Recent developments in credit bureau reporting and shifting patient payment trends underscore the critical need for collecting patient balances at the time of service and implementing shorter billing cycles before turning to collections.
In this climate, proactive measures to collect patient balances are more crucial than ever. Recent trends show that patients are increasingly less likely to pay their balances in full and on time. Economic uncertainty and rising healthcare costs have placed a strain on individuals and families, making it challenging to manage medical expenses. As of April 2023, credit bureaus have discontinued reporting medical debt balances under $500. While this change may seem minor, it highlights the importance of prompt patient balance collections. With smaller balances no longer affecting credit scores, patients may be tempted to delay payments if they pay at all, potentially impacting your practice’s revenue cycle.
We recommend two effective methods to improve your revenue cycle: collecting balances at the time of service and maintaining a quick billing cycle.
Collecting patient balances during their visit benefits both patients and healthcare providers. It promotes financial transparency and accountability for patients, reducing confusion and stress associated with delayed billing. Additionally, it helps patients manage their healthcare expenses more effectively, preventing the accumulation of large medical bills. For healthcare providers, this practice improves cash flow, reduces accounts receivable, and enhances operational efficiency, allowing for a greater focus on delivering high-quality care.
Maintaining a quick billing cycle is crucial. It's important to minimize the time patients remain in accounts receivable before turning their accounts over to collections. While sending a few statements or text messages is useful, delaying too long makes it harder to collect payments. Try sending two or three statements followed by a final notice indicating their last chance before being sent to collections. This final call to action is often effective in prompting payment. Patients who do not respond to this are typically unlikely to pay after additional notices and are prime candidates for collections.
While patient payment habits are beyond our control, we can optimize our in-office systems. Collecting patient balances at the time of service and maintaining concise billing cycles are crucial strategies. By proactively addressing patient responsibilities, providers can strengthen their practices, enhance patient satisfaction, and continue to deliver exceptional care.
