Resolving Self-Pay Accounts: Get More People Paying Monthly Partial Amounts
The title of this article sounds counter-intuitive, doesn’t it? In order to resolve more self-pay accounts more frequently, empower your self-pay patients to pay in affordable, incremental payments each month. How does this work exactly? Throughout the course of our over 30 years of experience helping hospitals resolve self-pay accounts, we’ve found the solution that has worked time and time again.
Want to Resolve Self-Pay Accounts? Think Incrementally
Patient self-pay accounts constitute 10.9 percent of a hospital’s revenue and that number is only going to escalate, according to the Medical Group Management Association. Historically, hospitals have not been set up to collect small increment payments from thousands of patients. The focus of the hospital’s billing staff has been to bill insurance companies for large one-time payments and then bill the patient for the remaining balance. Unfortunately, as the percentage of uninsured, under-insured, and individuals with high deductibles and increased co-pays grows such billing practices are becoming obsolete and costly for the hospital.
Here’s a heavy truth: A hospital does not need all of its money now. You may think you do, but it is better to collect 100% of what is owed over the course of months than to not collect anything at all or only a small portion of what is due.
In a report done by the Tennessean, it was found that for every dollar billed, the hospital failed to collect 65 cents. The high amount lost is simply because patients are unable to come up with large bulk payments to settle their entire account within one billing cycle or at the time of service.
Why Is This So?
Medical calamities often hit unexpectedly. Hospital expenses can quickly drain a person’s savings account. Frequently, those who suffer the hardest financial hardships are middle-class families. Let’s take a look at a scenario, one that is all too familiar for many families across the nation.
The Smiths have frequently scrimped and saved to take their children on a much anticipated vacation to Disney World, but in the blink of an eye, that dream evaporates. Their son Austin suddenly breaks his arm at baseball practice and the family is now faced with a $4,000 hospital bill. The parents, who are responsible individuals who pay their dues, see no other option than to drain their vacation fund to pay for the hospital expenses.
They don’t realize that options do exist and they don’t have to sacrifice their dreams and hard-earned savings to immediately pay off the hospital in full.
Payment Plans are a Viable Option for Both the Hospital and the Patient
Modern Healthcare reports that the default rate for patients on a payment plan has fallen from 30 percent to less than 17 percent.
A hospital bill does not need to be immediately settled and paid in full. A successful resolution does not necessarily mean getting the patient to pay the entire bill at once. Oftentimes, thinking more like a credit card company is most beneficial for both the hospital and the patient.
Paying a hospital bill off a little bit at a time is a better solution for everyone involved. Providing viable payment options to the patient helps the patient and ensures that the hospital truly receives 100% of what is due over time.
Short term financing and monthly payment plans need to be discussed with the patient by an experienced vendor. A well-organized managed payment plan has the potential to easily return 100% of the amount owed to the hospital.
Patients Readily Accept Payment Plans
Patients will normally readily accept a payment plan offered by a vendor as a way to take care of their outstanding hospital debt without draining their savings or other resources. The hospital gets to collect 100% of what is owed to them and the patient has the benefit of not facing being financially destitute with no savings for backup because of a balance that might end up in collections if not immediately paid in full.
The patient is typically happy to negotiate a payment plan that is affordable and fits their monthly budget. Vendor provided payment plans are a patient-friendly alternative to high interest rate medical credit cards or installment loans. Generally, hospitals reap the benefits of higher collection rates and greater patient satisfaction.
