The Importance of Payment Plans in your Revenue Cycle Strategy

By Patrick Creagh, Marketing Specialist

This past week we learned that hospitals lost 46 billion dollars in unpaid medical bills in 2013; the 2014 number is surely larger. Either way, that’s a lot of money written off as uncompensated care or sent to collections. As CFOs begin to focus their attention on updating their billing practices to meet the shifting payer mix, one area to capture this lost revenue is to offer comprehensive payment plan options to patients.

Patients Want to Pay Their Bills

Many times a patient simply can’t afford to pay an entire medical bill at the time of service. This is especially true for episodes of care that may include surgery, specialists, or overnight hospital stays. Often times these expenses are unexpected and can cost up to hundreds of thousands of dollars. Coupled with a high deductible health plan or out of network expenses, the majority of Americans aren’t financially prepared to handle a large unplanned medical expense, certainly not a catastrophic one.

That said, we’ve heard from our clients repeatedly that patients generally want to pay off their bills and are willing to work with their healthcare provider to make arrangements whenever possible. Putting a patient on a payment plan significantly increases the chance that a bill will be paid, due to the simplicity of charging the agreed upon amount each period, automatically. No additional work is required of the patient or provider, as payments are collected, processed, and posted until the balance is paid.

Help Patients Help Themselves

In the near future, self-service payment methods will represent the majority of patient payments, even large ones that may require a payment plan. As long as you have predetermined your parameters for payment plans according to your business rules, software tools like PatientWallet allow patients to manage payment plans online. You can even use PatientWallet to offer patients a prompt pay discount for an upfront payment online or on-site.

Offering comprehensive self-service payment methods allows patients who simply want to pay and be done to quickly resolve their balances online, and allows you to focus on patients who need the most assistance navigating the billing process.

Both groups of patients appreciate this approach because it is tailored to their needs and expectations, just like their care delivery. If you want to avoid lost revenue and increase patient satisfaction, avoid a one-size fit all approach to your payment plans. Your patients and staff will thank you for it.

To learn more about payment plans and other Patientco patient payment methods, click here.

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