Strategies for Optimizing Self Pay Accounts And Small Balance Collections in the Revenue Cycle

By Freeman Scott, Director – Revenue Cycle Practice

The rising cost of healthcare is a major concern for all healthcare organizations. There are several drivers that contribute to rising health care costs: an aging population, increases in the cost to treat the chronically ill, the rising cost of prescription drugs, and malpractice and injury awards among many.

Industry best practices suggest that providers should use a proactive approach to optimize self-pay accounts and small balance collections.  An effective self-pay optimization strategy should focus on the use of policies, processes, workflow improvements, reports, and technology. The strategies listed below are based on industry best practices and are offered as suggestions to assist in the optimization of self-pay accounts and small balance collection.

  1. Patient engagement – Engage early in the revenue cycle.  During the appointment scheduling process, verify eligibility of your patients’ health insurance coverage, including the required copayment. Clearly communicate to patients what their anticipated financial obligations will be, and set the expectation that the patient is expected to pay and the point of service. Doing so will allow the staff to quickly access the patients’ ability to pay and increases the changes of receiving payment.  For those patients who are unable to pay the entire bill at the point of services, develop payment plans that allow them to pay their balances over time.  Spending time counseling patients on their payment options is a good way to ease patients’ anxiety and increases their likelihood to pay. A good point of service driven strategy offers numerous benefits in addition to cash collections.  The strategy also offers real-time early identification and classification of charity and medically indigent patients.  Categorizing patients early in the registration process allows staff to focus on helping the patient by either assisting them with a government subsidy program or classifying them as non-collectible. This practice will save time later in the process of trying to collect on non-collectable accounts.  Statistics have shown the average collection rate for self-pay balances range between 2% to 3%, while the collection of balances after insurance plan payments exceeds 35%.  A robust point of service strategy can help to reduce these percentages.  The likelihood of getting paid decreases drastically the longer self-pay balances are outstanding.
  2. Payment processing – Provide easy access to payment processing at every point of service in the facility.  Patients are more accustomed to paying for services when they shop at the different retailers and will find it easier to accept the same payment processes when they pay for their healthcare. Including payment processing at the point of care greatly increases the chances self-pay patients will comply with payment procedures.
  3. On-line bill payment – Consumers have become acclimated to paying bills online, and medical bills should be no different.  Providers should have online access to the patients account(s) so they can see the outstanding balances for the uninsured, while the insured can check to see what insurance has covered, verify recurring payments and make payments anytime and anywhere.
  4. Follow-up phone calls – Setting up an efficient process for follow-up phone calls as gentle reminders for upcoming payments give patients and opportunity to contact providers to make installment payments.  The follow-up phone call also provides opportunities for staff to manage patient questions and complaints. Providers should audit the patient payment process by emailing or calling support lines regularly to help ensure they are functioning as planned and that staff is responsive.
  5. Leverage technology – By using real-time analytic modeling and scoring, a provider can determine a patient’s ability to pay.  These tools combine information from many different external sources to check past payment histories, and predict future payment behavior, thus improving the process of negotiating a settlement or payment plan.
  6. Install kiosks—using kiosks like those used to print boarding passes at the airport for check-in and check-out can improve upfront collection of patient copays and outstanding balances as well as increase the efficiency of the check-in process.
  7. Handle collections internally— handling collections internally can be tricky. The ACA International reports that medical practices recover is less than $14 for every $100 owed once they turn bad debt over to third-party collection agencies.   Keeping this in mind providers should set a threshold for the amount that would be sent to a medical collection agency.  Small balances of $75.00 or less should continue to be pursued by an in-house collection team.  A simple phone call may do the trick.  Balances that exceed the established threshold and time limit stated in your collections policy should be referred to an outside collection agency for further collection action.  It’s important to keep in mind industry best practices and include those practices in your collection policy.
  8. Save credit card info on file –  Establishing a credit card on file (CCOF) program can improve collection speed and cash flow.  You should only keep patient credit card information on file if your processing company contract allows it.  Check to see what other security requires guidelines such as encryption, etc. are needed.  Patients should always be required to sign an agreement allowing the storage of the credit card information.  Your Credit Card Online Policy should outline the conditions under which the card will be charged and if the charges will be one-time or recurring.
  9. Targeted staff training –When opportunities to collect at the point of service are missed staff should be informed.  Use the opportunity to engage staff members in the creation of meaningful training programs that reinforce the need to collect patient payments. Training may also include developing scripts and coaching to assist the staff in asking for patient payments at the point of service.   Use automated reporting to measure the success of your point of service payment program against industry bench marks, then share the information with the staff and recognize those staff members who exceed established benchmarks.
  10. Standardized down payments – Establishing a policy for standard down payments for self-pay patients in those instances when the patient’s financial obligation can’t be verified, guarantees the provider will collect at least some money from patients who might otherwise fail to pay after visits.

For assistance with the optimization of self-pay accounts and small balance collections visit our website www.MMYconsulting.com or give us a call at (317) 846-9500.  Our team of experienced revenue cycle consultants will partner with you to decrease your operational cost, and increase the efficiency of your business operations.