Improve Patient Collections and Stay Compliant with Payor Requirements


Patient Collections Are Vital to Increasing Revenue and Ensuring That Your Billing Service is Adhering to Best Practices

Collecting from patients has become increasingly vital to the financial health of most practices, as the patient portion of medical bills continues to rise. With sky-rocketing copays and deductibles, the patient due amount now accounts for approximately 30 percent of the income for practices. Because of this, the efficiency of a medical practice’s billing operations has a critical impact on its financial performance. Billing companies must understand not only the best practices in collecting from patients, but also how to remain compliant with specific payor requirements. Additionally, providing education on these best practices with the clients themselves can help everyone involved meet their income goals. . 

A 2015 survey by the Kaiser Family Foundation on employer health benefits illustrates why patient collections play such an important role in a practice’s financial viability. The results of this survey show that:

  • out-of-pocket costs for patients has increased by 230 percent in the previous 10 years, and
  • of the patients enrolled in an Exchange Plan through the Affordable Care Act, over 90 percent are in high deductible plans.

Other surveys show that 73 percent of large employers plan to introduce a high deductible plan to employees within the next three years, with 20 percent of those employers saying it will be the only choice offered.

This rising patient financial responsibility translates into real dollars and cents for practices, with patient co-pays accounting for one-fifth of a private practice’s income.

With these statistics, it is easy to see why collecting from patients must become a primary focus for medical practices and the billing companies that serve them. There are however, a number of issues that must be overcome.

One of the most important factors when collecting from patients is ensuring that the practice remains in compliance with payor contracts. For every payor the practice is contracted with, there can be varying requirements on how the patient portion of the bill should be handled. Each of these must be met for every patient, or the practice could face a breach of contract, cancellation of the contract, or even the possibility of an accusation of fraud.

There are four vital points billing companies must remember for patient collection activities:

  1. Provider-payor contracts usually require that patient co-pays be collected at time of service. A billing company may not have control over this point, but can help to educate the practices it serves to ensure compliance.
  2. Provider-payor contracts generally stipulate that patient balances must be collected. Failure to make collection efforts for patient balances may be viewed as a breach of contract by the payor, and the payor may terminate the agreement or deny re-negotiation.
  3. Contracts will almost always contain a provision stating how and when patient co-pays and deductibles may be reduced or written off. This must be followed, and discounts should never be provided until all requirements are met.
  4. Medicare requires a collection effort for all Medicare patient balances, regardless of the amount. Many other payors have similar requirements.

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