How to Effectively Collect Patient Payments

Medical payments are complicated. A reported 76 percent of consumers were confused by bills from their health care providers in 2015. Now, with the health care market moving toward high deductible health plans (HDHPs), consumers are facing an increase in financial responsibility.

Plans with higher deductibles have lower monthly premium payments, but consumers are responsible for paying for their care before insurance pays any benefits. It’s natural that patients are not only confused, but frazzled by their outstanding medical bills.

The shift to HDHPs is making it more difficult for medical practices to collect payments. Studies reveal a 20 percent drop in the likelihood of collecting dues after the patient leaves the office. That’s a huge chunk of change your practice may never receive.

Moreover, patient payments could be delayed further if your business doesn’t follow security best practices (more on that later). So, how can you accommodate patients, ensure your practice gets paid in full and maintain your business’ security? Here are our recommendations.

Make Patient Payments Flexible

While opinions differ, some estimate that patients will become responsible for half of all medical bills by the end of the decade. If that proves true, more patients will struggle to pay their bills in full on the spot. The good news is that nine in 10 consumers want to know their payment responsibility up front. You can meet your patients halfway with these flexible billing options:

1. Bill and Collect Payments Electronically - An analysis of ZirMed client data showed that switching from paper to electronic statements and payments cuts the mean days for payment from 20 to nine and boosts the percentage of full payments from 77 to 95 percent. A plus? Your patients will be more satisfied with your practice. Research shows 66 percent of patients say receiving electronic bills increases their satisfaction with providers. 

   Although some consumers still prefer paper, more are now opting to go digital. In terms of receipts, 90 percent of individuals prefer digitally stored receipts in the cloud over paper receipts, according to RFTConnect. Going paperless benefits your practice, too. It eliminates the cost and need of storing receipts and the risks associated with storing patient’s raw credit card information on Post-Its or in filing cabinets.

   With our Virtual Terminal, payments can be processed electronically. Customers can sign for payments digitally from the convenience of their own homes or at your office. While the practice’s digital receipt is stored in the cloud, patients receive a copy via email.

2. Set Up Payment Plans - Giving patients the option of a payment plan alleviates the financial pains of a higher deductible. Ensure timely payments by setting a payment schedule that suits both your patients and the practice. Collecting an agreement stating the set payment schedule and terms binds the patient to pay as expected.

   You can automate patient payments and maintain a paperless setup with our electronic, recurring billing system. Patients’ card information is encrypted and securely stored in the Virtual Terminal, so there’s no need to track patients down every time a payment is due. A recurring billing agreement is collected and signed at the beginning of the payment plan, so you have authorization to charge the patient as scheduled.

3. Offer Online Payments - If recurring payments aren’t an option, you can allow patients to pay outstanding medical bills online. More than 75 percent of consumers choose to pay their household bills through online payment channels, according to InstaMed’s 2015 Trends in Healthcare Payments Annual Report. 

   This can be done with a hosted checkout on your website or via a patient portal with integrated payments. Notify patients of outstanding payments with the invoice number, and let them pay from the comfort of their own homes or on the go. You can stop waiting for patients to call to pay or mail a check, which improves your practice’s cash flow.

4. Accept Multiple Forms of Payment - Payment method diversity is on the rise. With consumers using an average of 3.6 different payment methods each month, it’s important to accept all types. This includes debit and credit cards — both magstripe and EMV — checks, ACH payments and mobile payments. In fact, 64 percent of consumers are interested in mobile payment systems like Apple Pay for health care bills.

   Partnering with a Merchant Account Provider that accepts all types of payments will help you accommodate all patients’ preferences and ensure you get paid on time more often. It’s a win-win.

Increase Security and Eliminate Payment Delays

You want to meet your customers halfway, but you shouldn’t compromise security in doing so. There are several ways to accommodate your patients, improve cash flow and keep your business secure:

1. Use Cloud-Based Payment Processing - If you’re using a patient management system, you’ll need to connect your merchant account to process patient payments. Before choosing a provider, you should confirm whether its software is cloud-based or native. If it’s native, it uses middleware.

   You should avoid middleware for two reasons: First, it puts your practice within PCI scope and may subject it to annual audits, which are timely and cost money. Second, middleware means the payment software is downloaded to your servers. In the case of a hack, you could be responsible for losing patients’ personal information and card data.

   Hundreds of hospitals and clinics in the British National Health Service were recently hacked by the ‘WannaCry’ malware hack. That wasn’t a fluke. Across all industries, health care has the highest cost per stolen record at $355. If hacked, you will not only be facing a delay in payments from patients with compromised information, you will also be facing a mountain of painful fines. Opting for cloud-based payment processing will protect you and your customers from a hack, and prevent delayed cash flow, since nothing is stored on your servers.

2. Process EMV-Chip Cards Correctly - The October 2015 liability shift put new chip cards in consumers’ hands and the financial responsibility for fraudulent transactions from non-EMV cards on businesses’ shoulders. In a historically low-risk payments space, most providers in the health care industry haven’t seen an immediate need to upgrade equipment to accommodate these new cards. 

   Despite facing very low fraud rates, medical practices may encounter payment delays if EMV cards are not processed correctly. To encourage the acceptance of EMV cards, banks are initiating chargebacks on EMV transactions that are swiped with a magnetic stripe reader instead of a chip-card reader. In the case of a bank-initiated chargeback, the cardholder wins by default even if you collected a signature. If practices continue to process EMV cards incorrectly, they can expect major delays in receiving patient payments, as banks will favor cardholders.

Don’t Wait for Patient Payments

Medical practices typically focus on providing the best care. With patients facing increased financial responsibility in the coming years, health care providers stand to lose a lot of money if they don’t adapt to the current changes rocking the industry. By improving services around patient payments, practices will be able to collect all dues in a timely manner, keep patients satisfied and maintain security.

See how a real medical practice benefited from these features.

What are your thoughts on these methods of keeping your patients safe and expediting your payment processing? We'd love to hear from you!