Patient collections prerequisite: Believe in your policies

According to the consultants and administrators I spoke with for our recently released special report, Patient collections: 7 Fierce strategies for getting paid, patient responsibilities now account for up to 30 percent of some practices' total collections. Another recent article predicted that by the end of 2010, about 35 percent of a provider's total revenue will come from patients.

This means that practices simply must get serious about collecting copays, deductibles, coinsurance and any outstanding balances from patients now--not the dwindled sums that might eventually roll in later.

The technology to get this money in the door is here. Sophisticated practice management systems, online bill pay and even real-time adjudication can all smooth out the revenue cycle considerably for practices as well as patients.

The knowledge to enhance patient collections, including our report and numerous industry resources, is ready and available, as well.

But the business mindset adopted by nearly every other industry, and even in hospitals, seems to be lagging for physician practices.

Although you say you understand the importance of patient collections (administrators ranked "collecting from self-pay, high-deductible health plan, and/or health savings account [HSA] patients," as their fourth-biggest concern in 2009 and sixth-biggest in 2010, according to surveys by the Medical Group Management Association), deep down, you don't seem to be buying it.

Even though the awareness is there, most practices still don't attempt to collect any more than copays at the time of service, says John W. McDaniel, president and CEO of Peak Performance Physicians, LLC, a New Orleans-based consultancy. It's just reflex to send a bill (each of which can cost up to $4 off the bottom line).

Some say this happens because medical office employees just get too busy. Others blame poor training or employee discomfort with asking for money.

If these are the root problems, they can be fairly easily fixed. But remember, before a practice can expect staff to "sell" its rules and policies to patients, as Atlanta consultant Mike Fleischman recently put it, you've got to sell it to the staff. And before that can happen, leaders have to themselves believe in the concept they are selling.

The pitch you've no-doubt heard and passed onto others: Your practice is a business. To remain in business, you need to collect the revenue you are owed, whether from third-party payers or directly from patients, as quickly and efficiently as possible.

But on the other side of the counter are people not too different from you or your neighbor or your mom. They weren't expecting to need surgery or a cast or a biopsy. They took the high deductible to help make ends meet or because their employer gave them no choice. You can make the analogies to other industries that wouldn't dream of sending bills (restaurants, movie theaters, airlines, mechanics...) all day, but it's really not the same.

Nonetheless, your balance sheet works identically to the gas station or the car wash. If people drive off without paying, your practice, your physicians and ultimately your patients, will lose.

As a business, healthcare is different. Go ahead and acknowledge that. Then find a way to reconcile this reality with what it is you have to do to keep providing that care. - Deb