When patients can’t pay their medical bills, it can create a difficult situation for both the patient and the provider. From the provider’s standpoint, defaulting on a medical bill leads to bad debt — dollars providers will never see. Thankfully, before default turns into bad debt, there are opportunities to realize some (if not all) of the revenue in question. The simplest solution is often to offer a payment plan.
Payment plans allow patients to pay their medical bills over time, minimizing the risk of default. But simply offering payment plans isn’t enough. Providers must help patients understand the options to alleviate any anxiety or apprehension in taking advantage of them.
The benefits of payment plans
Offering a payment plan benefits providers and patients in several ways, including:
- Avoiding default and bad debt
- Improving the patient experience and reducing patient attrition
- Attracting new patients seeking flexible payment options
- Increasing cash flow with a steady stream of revenue
- Achieving a more predictable revenue model
Creating effective payment plans
Contrary to popular belief, most patients are willing to clear their financial obligations, but they struggle to comprehend and fulfill rigid payment methods with no room for negotiating more flexible terms. Therefore, the first step to creating an effective payment plan is to understand your patients’ needs and preferred mode of paying their medical bills. By stepping into their shoes, you can develop multiple or customized plans to support your patients so they can make regular payments and your practice can stay afloat.
Managing and tracking these payments will be vital to ensuring success. A robust RCM system can help streamline the administrative burden.
How to approach patients
Before talking to patients about payments and plans, assess your medical billing and collection policy. While every practice has one, not all adhere to it. Many healthcare providers allow exceptions, making it more difficult to collect what is owed.
After a solid policy is established and communicated throughout the practice, sit down with your patients and have an honest, transparent conversation about the importance of clearing payments promptly. This is the best way to get your message across without being offensive.
Most patients are willing to accept their financial responsibilities once they understand they are paying for a long-term quality service to keep them healthy. Patients also should have a chance to share any billing questions or financial constraints. This type of open conversation provides an opportunity to connect with patients and introduce them to a plan for making payment easier and ensuring a steady revenue stream for your practice.
A win-win solution
Creating payment plans for patients who can’t pay their medical bills is a win-win solution for both parties. These plans offer patients a way to pay their bills over time, preventing default and bad debt for healthcare providers. By offering payment plans, providers can also maintain positive patient relationships, improve their financial outcomes, and reduce their administrative burden. It all comes down to structuring and positioning payment plans in a transparent, approachable way.
Explore other opportunities for protecting your cash flow at trubridge.com.
