With 1 out of every 10 Americans living in medical debt, 69% of physicians have begun to turn to alternative payment methods for patients in their practice. They’re doing this partly to help ease financial woes for both the patient and the practice and also to help overcome one of the barriers to quality healthcare, according to Medscape’s Physicians Rate Healthcare Access Report: Ongoing Problem for Patients.
Rebecca Squires, an Atlanta-based physician practice manager with 12 years of experience in dermatology, nutrition, and physical therapy offices, says that payment method options are varied and are increasing and that the ideal platform for your practice will be the one that allows both patients and clinics to approach financial expectations with transparency.
“Your motivation is to make sure that you have the money and documentation in place, so the patient is aware of their responsibilities as much as possible,” says Squires. “No one wants to be surprised with a bill, and we don’t want to get stuck not getting paid.”
Squires, who now consults with healthcare businesses to improve their operations, says that methods are most successful for practices when they aid in recouping cost for services up front while avoiding overcharging.
“You don’t want to collect too much at the visit because then you have to refund patients, and that takes work and staff power,” she says. “If you don’t collect enough, then you have the opposite where you have to track people down and sometimes even go to a collection agency to get the money.”
Alternative Ways to Pay
Although there is no perfect method to guarantee satisfaction for patients and physicians, many options are available to help ease fee anxiety for payees while maintaining a more stable revenue for clinics, and the choices continue to evolve and grow.
Cost transparency tools. Platforms such asTrue View, HealthSparq, and Healthcare Bluebook give patients pricing estimates for certain procedures in advance, so they can better understand their financial responsibility up front and shop around for a better deal if necessary. Still, some flaws remain with these tools, says Harold C. Miller, president and CEO of the Center for Healthcare Quality and Payment Reform.
“From the patient’s perspective, it’s not what the office charges; it’s what the health plan will pay,” he says. “So, when you see these transparency reports, they are petabytes of information, because there isn’t just one price for an MRI; there might be 700 different prices, because different health plans have negotiated different prices, or the patient may have different copays for it, depending on which health plan they’re on.”
Some tools attempt to address this problem by using historical claims data to help consumers compare costs and quality of care for procedures across different facilities and locations. And even if the estimate isn’t 100% accurate, just knowing a ballpark figure can ease cost anxiety and improve revenue. In addition, according to the Healthcare Finance Management Association, pre-service estimates can help increase point-of-sale collections and improve patients’ understanding of their payment responsibilities before they receive their bills.
Apps. The benefit of apps such as RiviaHealth and healow is that they give patients a consolidated place to understand, track, and pay all their medical bills in one place. These apps can also provide notifications when bills become available. Others, such as GoodBill, and CoPatient, act on behalf of their users to negotiate unpaid medical bills to make them more affordable (for a fee).
Medical credit cards. Healthcare credit cards such as CareCredit or Wells Fargo’s Health Advantage card offer a specialized credit card that patients can use for out-of-pocket healthcare expenses not covered by medical insurance — but only at locations that accept the card. Like regular credit cards, patients can use them to pay their bills immediately and then pay off the balance over time.
The benefit to patients is that these cards often come with unique financing options that are slightly better than a typical credit card — even deferred or 0% interest for a set period. The benefit to physicians is that the bill gets paid in full.
“There are practices which even work with these vendors and say, ‘Hey, we can offer you this credit card through the practice,’ and that way the patient pays off the credit card, and the provider gets their payment in full and doesn’t have to wait,” says Squires.
This method typically requires patients to undergo a credit check to qualify and comes with the same risk of increasing rates or fees as other credit cards. And of course, not every patient will be eligible for a medical credit card nor want to pay with one.
Recurrent payments on a regular credit card. Your gym offers it and so do Netflix and other subscription services. If you have patients who need to make a monthly payment, you can add a recurring payment feature to your practice management system, or an online third-party service can set this up for you. This way, patients’ monthly payments are deducted automatically.
Payment plans. If you don’t already, consider offering a no-interest or low-interest payment plan for bills. Squires says that patients who can’t pay a $100 deductible in full are open to a conversation about how that $100 could be broken into smaller chunks and paid over time.
Since practices that offer no-interest or low-interest payment plans are taking more risk, they may want to limit the amount of in-house financing to select patients who have smaller bills that require shorter payment tracking periods.
“Some say, ‘I could do it over 4 months,’ or, ‘You could take out $25 every 2 weeks,’ and just having that conversation with people means we don’t have to send it to collections,” says Squires.
Rachel Reiff Ellis is an Atlanta-based freelance writer and editor specializing in health and medicine. She is a regular writer for WebMD and Fortune Well, with additional work appearing in Prevention, Oprah Magazine, Women’s Health and others.