While physician practices must maximize patient collections to stay financially healthy, more than 75% wait more than 90 days to turn overdue bills over to a collection agency.
In a poll conducted by the Medical Group Management Association (MGMA), 43% of 1,043 respondents said they wait more than 91 to 120 days following service before turning an account over to outside collections, and another 32% wait more than 120 days. Some 7% indicated they never turn over an account to collections. Only 2% take action after 60 days, and 16% take action between 60-90 days.
A well-managed practice’s business office focuses attention on accounts that can be collected by in-house staff or the practice’s billing company, sending accounts that have a low probability of being paid to an external organization for collection, the MGMA said.
Given that many patients now rely on insurance that offers lower premiums with a higher deductible for which they are responsible to pay, it’s more important than ever that practices manage revenue cycles to maximize patient collections, the association said.
One way practices can increase revenue is to collect payments at the time of service. Practices can save money by not billing and and re-billing patients. Some practices have gone as far as to require all patients with high-deductible health plans to keep a credit or debit card on file so payments can be charged against it.
In a previous poll, the MGMA asked practices about what payments they collect up front. Most practices (59%) said they collect a combination of patient payments. Of those practices, 98% collect co-pays up front, 78% collect deductibles and 54% ask patients to pay major procedure estimates up front.
Only 5% of the 1,338 respondents do not collect any upfront payments from patients.
Practices aren’t the only healthcare organizations trying to collect payments before providing service. More hospitals have set up programs for patients to pay for care in advance.
Just as doctors talk to patients about the pros and cons of treatment options, they need to be prepared to discuss the costs of care from tests to prescription medications.