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5 Tips for Improving Patient Collections in a Medical Practice

April 26, 2018

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The medical expenses billed directly to patients continue to rise, primarily due to the increase in co-pays and deductibles. The balance charged to patients currently accounts for about 30 percent of a medical practice’s income, making patient collections increasingly vital to a practice’s financial well-being. Billing services must therefore implement best practices in collections while complying with payer requirements, which can vary greatly. The following five tips will help billing services improve patient collections:

  • Educate the Front Desk of Medical Practice.
  • Establish a Financial Policy.
  • Collect at the Time of Service.
  • Shorten the Statement Cycle.
  • Document Everything.

Educate the Front Desk of Medical Practice

Billing services can play a key role in improving collections by educating their medical practice clients, thereby increasing the revenue of both parties. Practices should be empowered to collect all monies owed by patients, including balances, copays and deductibles. Most practices already have formal financial policies, but those that don’t should be educated on the value of developing one. A more common problem is that many practices fail to adhere to their existing policy in every patient interaction. Consistent enforcement of the policy is crucial for maximizing collections.

Establish a Financial Policy

A financial policy tells patients what is expected of them, especially with respect to what and when they must pay their bills. It also determines if and when their insurance will be billed. An explanation of the financial policy is the most effective way of starting the money conversation with patients and making it less awkward.

Billing services should encourage practices to obtain a credit card on file (CCOF) for each patient. This policy not only improves the practice’s financial health, it also benefits patients. Practices that implement a CCOF policy reduce their collection expenses, improve their cash flow and eliminate patient statements. Patients benefit because they no longer need to bring payment to their appointment, go online to make a payment or wait for a statement.

Collect at the Time of Service.

The best time to collect is at the time of service since the chances of receiving payment for a medical service generally decrease over time. A practice’s front-desk staff should be empowered to collect payment from patients, which is especially important for expensive services. Collecting payment before the patient leaves the office not only benefits the practice financially, it will also improve patient relations in the long run.

Related Article: 4 Ways to Increase Patient Collections by Improving Front Desk

Staff members are often reluctant to discuss financial matters with patients, but scripts can greatly alleviate this problem. Billing services can also aid this process with role plays, where they play the part of a patient asking difficult questions. This process allows staff members to  become more comfortable with their answers.

Shorten the statement cycle

Healthcare providers should bill their patients as soon as possible to maximize collections, a practice also known as compressing or shortening the statement cycle. The chance of collecting an unpaid balance is over 97 percent if it’s less than 30 days old. However, that probability drops to 60 percent after 60 days. Assume for this example that a patient has an unpaid balance of $1,000. Statistically, that balance is still worth $970 after 30 days, but it drops to only $600 after 60 days.

Document everything

Complete documentation is essential in collections, whether a billing service is collecting from the patient or insurer. A continuous paper trail must be maintained by documenting all interactions with both of these parties. Billing services should also work with practices to document the schedule for billing actions such as offering the patient a discount, sending the account to a collections agency or writing off the balance.


M-Scribe Medical Billing Services, LLC is a national leader in medical billing and coding audits. We also manage the payer and patient side of collections. Call 770-666-0470 or email to find out how we can help your practice.


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