With high deductible health care plans continuing to increase, there are also increasing opportunities for patient misunderstandings and customer service complaints when patient medical bills go to the collections status. Keeping lines of communication consistent as well as a clear collections policy and practices is key to good business practices for mid-size independent medical clinics.
You will have patients that believe that making payments, no matter how small, will keep them off the radar and out of collections. Unfortunately, paying $50 a month on a $500 bill will take almost a year to pay off. A mid-size clinic can’t afford to have their accounts receivables holding on to patient debt, which is basically a form of no-interest loan with no application process! A consistent standard must be set for what is considered an “approved” monthly payment. We recommend 3 equal monthly payments for bills $500 or less; 6 months for bills over $500. If specific circumstances warrant, another arrangement can be made with the clinic administrator after completing a financial need request.
Many patients don’t understand that they can be sent to collections when a bill goes unpaid. This can cause customer service issues for your billing office and front desk if they are not on the same page. Patients need to understand the timeline and process of payments so expectations are clear. Having a simple policy for your patients that both the front desk and billing office adhere to let’s patients know that you are running a professional service and timely payment is not requested, but expected. Again, any exceptions to the rule should be handled by the administrator, individual staff.
After multiple statements, phone calls, and a collections letter, some patients will claim that “they just found out about the bill” or were otherwise never informed. If a patient moves, changes their phone number, or has a spouse on the account as guarantor, this situation can easily occur. However, notifying the patient of their medical bill before it is turned over to collections is not a requirement. The collection agency will conduct skip tracing and research to identify the current address, and when contact is made, will often accept payment with no repercussions to the patient’s credit score. However, if the patient chooses to dispute the bill they will soon find that they have been reported to the credit bureaus and if the bill goes unpaid. If the patient continues to not respond they can be sent to a collections attorney for payment or garnishment of wages. Any reasonable patient will want to avoid this series of events. Having the billing office provide a detailed patient ledger of services rendered can help to resolve any dispute or misunderstanding in a timely fashion and get the balance paid.
Medical bills are a big source of debt in the United States. Collection agencies will report medical bills like any other bills to credit bureaus. Credit reports do not differentiate between the credit card you never paid off and the unfortunately large deductible you had from the emergency surgery. Both will affect your credit rating the same, negatively! The unfortunate reality is that even when the bill has been paid it will still be a part of your credit score reporting. Credit ratings will eventually correct itself because under federal law. After 7 years and 180 days will clean the debt, paid or not, off of your credit record. However, most unpaid debts will go to collections attorneys and this will incur additional costs and a judgment, which is yet another negative mark on your patient’s credit.
This brings us back to the conversation at the front desk regarding patient medical bills. As a best practice, when checking patient eligibility check the deductible and co-insurance. What is the appointment for – an office visit before a major surgery? If you see that the patient has a large deductible tell them and explain what this means. “I see that your insurance has a $4,500 individual and $9,000 family deductible. This means you will be paying for 100% of the appointment today and potentially your surgery. How would you like to pay for this – Visa, Mastercard, American Express?” If the surgery is optional then making sure the doctor is also involved in the conversation to ensure that patient does not unknowingly create an unmanageable debt. If the surgery is critical then setting up a partial advance payment, pre-authorized payment or payment plan can all be a part of the conversation. Just ignoring the problem is a disservice to the clinic and the patient. A simple sign such as “Ask front desk to check your deductible” can get the conversation started. Also, having a written policy for how and when patient responsibility will be collected, and what happens to unpaid patient debt, is important.
High deductible health care plans make consistent communications critical. For some patients, they just won’t have the ability to pay without proper planning. Having consistent policy, training, signage and forms can go a long way to reducing patient misunderstandings and customer service complaints.