How to focus your self-pay patient collection efforts

As few as 10 years ago, a discussion about how to collect patient balances wouldn't warrant much interest. But today, with 30 percent of practices' revenue stream coming from patient responsibilities--including copays, deductibles, coinsurance and self-pay for services--a full house of MGMA Annual Conference attendees listened intently to Elizabeth Woodcock, principal of consultancy Fredericksburg, Va.-based Woodcock & Associates, provide detailed advice on how to get patients to pay.

According to Woodcock, one of the keys to successful patient collections is getting a strong return for the money it costs you to collect. To do so, you need to first understand the three types of medical-payment personalities:

• "Happys"--These patients, for the most part, pay you what you ask for when you ask for it, with little extra effort on your part, provided you are clear about their financial responsibilities and expectations
• "Nudgers"--These patients are likely to pay their medical bills with some additional prodding and incentive
• "Refusers"---These patients have absolutely no intention of paying you, either because they can't or they won't

According to Woodcock, it costs a practice twice as much to collect from patients as it does to collect from payers. So to get the most revenue back for your effort, concentrate on the nudgers.

The amount of nudging required may depend on the patient and the balance. One easy trick Woodcock recommended was to "compliment and ask." In other words, train your employee to say something along the lines of, "What a beautiful necklace, Mrs. Smith! How would you like to take care of your copay today?"

To bring the pressure up a notch, consider having employees begin writing out the receipt at the same time as they're requesting payment. "This sends the message, 'They really do expect me to pay,'" Woodcock said.

For a stronger tactic, consider instituting a "copayment recollection fee," she suggested. Legally, patients would have to know about this fee before you charge it, but Woodcock said you'd be surprised to see how many patients magically find their wallets once you inform them, "We'd be happy to send you a bill for that copay, but please note that there will be a $20 recollection fee if we don't collect your copayment at the time of service." Most practices that use this strategy will waive the fee if the patient calls the office back to pay by credit card later the same day, she added.

As for the "refusers," Woodcock said that your first step--before sending any self-pay patient's account to a collection agency--should be to check the individual's Medicaid eligibility. This saves your practice the expense of sending multiple statements that will never be paid and helps the patient obtain coverage.

In addition, your practice should have a financial hardship policy for patients who can't pay, but it's essential that you have a formal method of substantiating the hardship so that you're not accused of discrimination for providing discounts for some patients and not others, Woodcock said.