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Improving Self-Pay is Not One Size Fits All for CHC’s

April 4, 2016

Payment options

Is your self-pay AR continuing to grow and you just don’t know what to do about it? You are not alone.  Many of our client centers struggle with this same issue.

The solutions or “Best Practices” for addressing this are varied – one size does not fit all.

What Payment Process is Best for my CHC?

There are some critical questions to be answered before you can determine what process will fit your organization.

First you need to determine the mission of your center and the direction your leadership wishes to pursue in regards to self-pay.  Some centers choose to take no action, and do not send out self-pay statements.   Others choose a more aggressive approach and even go as far as to take collection action.  Your center’s leadership will need to decide what they are most comfortable with and then set up action items that support that decision.

Once you get direction from your leadership you would need to determine if you have the resources (financial and staffing) needed to meet your goal. For instance, if your leadership wishes you to take a more aggressive approach, what additional processing or staffing will you need?  While sending statements are a good start, studies show that you are more likely to capture outstanding balances while the patient is at the center.  Can you put this additional task on your already busy front desk staff?  Can you afford to hire a financial coordinator who could handle this?

If additional staff is not an option for you, you may wish to consider some outsourcing services.  Collection agencies offer varying levels of services including softer more gentle reminders versus demand for payment.  Again, when picking a collection partner consider the culture and needs of your organization and its patient base.  A local agency may be more familiar with your area, patient base and payers.  Larger more national agencies may offer a larger array of services to meet your needs.

What Actions Can I Take to Improve Self-Pay Collections?

Even without a collection agency, there are actions that you can take to help improve your self-pay collections and ultimately your costs.

  • Review your statement process.  What are your statement costs compared to what is captured in patient payments?  If you are not breaking even on this you may want to look at ways to reduce this. Do you have a dollar threshold on your statements? It doesn’t make sense to you send out balances that are costing you more to send a statement! Also consider how many statements are you sending out. Payments on statements drop dramatically after the 3rd statement – if you are sending our more than this you may wish to reduce this number – or perhaps only send out additional statements for high balances.
  • Be sure your patients are properly educated regarding their financial responsibility.  The number one reason for patient inquiries to PMG’s patient services center is because they are trying to understand why they received a bill.  The majority of these are sliding fee patients.  They need to be aware of any potential services they may be billed for outside the sliding fee process.  You may also wish to review your sliding fee process.  The more complicated it is, the greater the chance that patients may get balances in error.  Flat rate sliding fees are a great option to simplify things and are proven to reduce a number of these issues.
  • Reduce denials – be sure eligibility is being verified for each and every visit.  Approximately 25% of self-pay balance AR’s are related to invalid insurance information.  This is collectable revenue for you!
  • Make the process to make a payment easy – more centers are using some type of online payment functionality. In this day and age fewer people are writing checks and don’t have stamps readily available!

In summary, the “Best Practices” for managing your Self Pay AR begins with what fits best for your center.  Once that is decided the rest will fall into place.

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