The benefit of flexible patient payment options

The new year brings new health plans, often with higher deductibles, and old bills that patients may be struggling to pay. According to 2018 data compiled by MedData, 83 percent of physician practices with fewer than five practitioners reported that their top collection challenge was slow payment among high-deductible plan patients.

In this landscape, physicians may have to get creative in order to increase their revenue. Experts suggest that the more payment options physicians offer their patients, the better the chance that bills will get paid. 

Patients are growing accustomed to an Amazon-like consumer experience, where they can click on a link and pay in an instant, ideally from their mobile phones, according to Deirdre Ruttle, vice president of strategy, for InstaMed, a healthcare payments network in Philadelphia, Pa. 

“We live in an always connected world. According to research, 75 percent of adults are online daily, and one in four adults report being connected all the time,” she says. 

Technology has made paying for goods and services incredibly convenient, Ruttle says, with options such as digital wallets, e-statements, and text reminders to pay balances owed, but it’s also increasing consumer demand for a variety of payment options.

The MedData study also found that 68 percent of consumers would prefer to pay their medical bills electronically, and 92 percent want to know what their patient responsibility is in advance of service.

As a result, Ruttle says, “Physicians should give patients multiple options with payment channels and payment methods so that you can really meet patients where they already are.” 

Assess your patients’ financial health

In order to determine what options to offer, physicians should adopt some tools for assessing their patients’ fiscal health, according to Kevin Fleming, CEO of Loyale Healthcare, a healthcare technology company in Lafayette, Calif.

Fleming breaks this assessment down into a series of measures:

The patient’s:

• ability to pay 

• financial capacity

• income

As well as:

• where they aren’t paying 

• how they can pay

“When patients aren’t paying, they’re already communicating strongly to you, in very real terms, that there’s a problem.”

And rather than treating that problem as a hassle, Fleming encourages physicians to work with the patient, because this can lead to a greater likelihood of receiving payments and a better patient experience. “The patients’ financial experience should be as good as, or even better than the clinical experience.”  

To streamline the process as much as possible, David Shelton, CEO of PatientMatters, a patient collections company in Orlando, Fla., recommends that all payment solutions be standardized and consistent. He recommends scripting conversations in advance so that front desk staff can engage easily with patients, and employing some sort of analytics or measurements on payment methods to see which ones are working best.

“It can all be incorporated into one presentation and the patient will have full satisfaction with the overall experience, not just the clinical side,” Shelton says.

Physician charge accounts

When determining which payment methods to offer, physicians should consider that affording healthcare costs is not just a problem for the low-income, says Mark Spinner, president and CEO of AccessOne, a patient finance company based in Charlotte, N.C. “The majority of the country has a [healthcare] affordability problem now. People with jobs, with families, with mortgages and auto loans, people who are credit worthy.”

AccessOne is among many companies that offer “co-branded, personalized financing,” much like a store brand charge account that a person might get at Home Depot or Nordstrom. 

These accounts work much like a credit card, so physicians see their revenue, and the patients can pay down their balance in the ways that work best for them. 

There are multiple kinds of accounts, too within this framework. “Some accounts are built as part of deductible plans, some are built for catastrophic balances, some are built for partial charity or partial financial assistance recipients. Those different programs help the provider deliver a positive payment alternative for every patient that walks through their doors.” Patients can even obtain plans that offer zero interest for a set rate of time and the option to pay off their balances as needed.

Payment plans

Many physician practices offer standard payment plans, which Fleming says are only moderately successful in obtaining revenue.

He has seen physicians be successful with a prompt-payment discount for paying within a certain time frame. “You’d be amazed at what a simple discount of 10 to 20 percent will do to the psychology of the whole transaction,” Fleming says. “The patient is getting additional cash back in their wallet.”

A more common model is to break a bill down into monthly payments over a time period, such as a year, but there is still a financial risk to the physician.  He says that sometimes physicians have to be willing to increase the length of payment time. “When the patient just can’t afford say $200 per month, they might need three-year financing on something like an emergency room visit or cancer [treatment].” 

Additionally, he says, allowing patients to set the payment parameters can lead to better results, within reason. “When patients self-construct plans, selecting an amount and the period that works for them, they’re able to keep up their end of the bargain and pay.”

Another option is to pre-pay before a large and planned medical cost, such as childbirth or a big equipment purchase like hearing aids, according to Leonard Wenyon, BSBA, vice president of IKS Health, a practice management consulting company in Newark, Del.

Then, when the baby is born, or the equipment comes in, the patient doesn’t owe anything. 

If none of those options bring in prompt payment, Wenyon says, physicians can consider outsourcing to a collection agency.

Self-pay options

When the patient’s deductible is extremely high, or if they don’t have insurance, Wenyon recommends physicians consider offering some basic services at a flat rate. “You tell the patient ‘this is the rate we expect at time of service.’”

He took advantage of such an opportunity while on vacation in Hawaii, when his daughter became sick and the local hospital did not take his insurance, but did offer a flat rate. The advantage is that the patient knows what they’re paying up front, and once it’s paid, there’s no bill to collect on. Sometimes, he says, commercial insurance or Medicare will cover it retroactively.

The importance of the front desk 

No matter what payment options a physician offers, front desk staff will play a crucial role in making them work, Ruttle says. “There is a great opportunity for providers to bring those financial conversations up at the beginning of the encounter, not the end,” she says.

She says taking the taboo out of talking about money up front helps to eliminate some of the fear and confusion that is so prevalent in healthcare payments today.

This requires training front desk staff to become comfortable talking about money and getting some form of payment at the point of service. It doesn’t have to be awkward, Ruttle says, comparing it to the experience of checking into a hotel, where the consumer knows in advance that they’ll have to provide a credit card upon arrival, but will only be charged for specific things. 

Fleming says patients want to feel cared for not just from a clinical aspect but from a financial aspect, too. Having these conversations when the patient checks in, he says, allows the patient relief from the financial stress or burden, and helps them focus on their clinical care they’re seeking. 

Shelton says that just asking patients about obstacles to paying has led to his clients’ point-of-service collections increasing by as much as 20 percent. 

“Our experience is that most people truly want to pay their bill,” Shelton says. “The challenge has always been whether the healthcare provider will have the conversation with them at the very beginning, taking into account their financial challenges or opportunities.”

If physicians are worried about the costs of adding any of these payment options to their EHRs or practice management software, Ruttle points out, “The overall cost is a very small percentage of what bad debt looks like. The return on investment (ROI) is very strong.” She recommends that physicians who feel overwhelmed by choices start with an online payment portal and e-statements and phase in other options over time.

Should physicians use payment apps?

Patients use smartphones for so many purchases it only makes sense that they want to pay for their healthcare that way. Now that patients are also shouldering a greater burden of their healthcare costs, the pressure is mounting on physicians to offer mobile and online payment options. 

Probably the easiest method for most practices is to create a payment portal to the practice management system, either accessible via the web or through a patient’s mobile device, says Craig Cooper, product manager for AdvanceMD, a medical practice management and EHR company out of South Jordan, Utah.

“This gives them the opportunity to receive a text saying they have a balance due and go make that payment.”

“When we offer more convenience to a patient, the more the patient will participate,” says Paul Gordon, manager of business development for Micro Office Systems in Cleveland, Ohio.

Gordon recommends that physicians take advantage of some form of online payment service, whether an app or a patient portal. “Whatever you use-the Square app, PayPal, or a bank’s basic shopping cart function, use it. You have to have a 24-hour, 365 day availability to take a payment in this day and age.”

However, the kind of mobile app or payment portal should be thoughtfully considered, Gordon cautions. “We recommend a tight integration between your payment app and your practice management system.”

Saya Nagori, MD, an opthalmologist in private practice in Bowie, Md. and CEO of Simple Health, a telemedicine platform for vision exams and birth control evaluations, sees the lure of cash payment apps. “The pro is their ease of use. We’re on our phones all the time, and the app interfaces are easy.”

However, she also cautions against tacking them on without thought. “Offices are complicated. There’s a billing system, an EMR, a scheduling system. A payment app like VenMo or Paypal [can’t be] integrated into those systems.”

Additionally, many cash apps don’t secure patient information like a payment portal does. Simon Greenberg, MS, product manager for MedManage, a medication management and pharmacist consult app, warns that they can also cause HIPAA violations, as some of them show the address of the physician’s office where a payment was made. 

Nagori’s practice offers patients the ability to pay online by embedding links into texts and emails. While for now that’s the only online payment she offers, she hopes that mobile solutions will become more integrative in the future. “Anything I can do to make the [payment] process easier and give the patient more options, I’m all for it.”

Another low-cost way to make payments convenient for patients that is not mobile, Gordon says, is to combine a credit card swiper in-office, with a “tokenization” process-a service that allows the practice to store the person’s credit card data securely for future use. A patient could then authorize payment over the phone using the stored data.

“The more convenience you can offer the patient, the more ease, the more info, the more likely they are to pay,” Gordon says.