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Time-of-Service Collections

The statistic seems startling – one-third of patients who walk out of your practice’s door, walk out without paying a dime.1


In this Pulse article, readers will learn:

  • Ways to set time of service payment expectations
  • Techniques to effectively collect time of service payments
  • Ways to collect from patients without insurance
  • Tactics to estimate patient financial responsibility at the time of service

View related pearls


One-third of patients who walk out of your practice's door, walk out without paying a dime.1 This trend is on the rise because nearly one out of every five patients is uninsured and employers are increasingly transferring financial responsibility to patients through high-deductible health plans, and higher copayments and coinsurance.2 With projections that one-third of your revenue will soon be coming from patients, not insurers, it's an opportune time to focus on optimizing your collections at the time of service.1

Lay Out Ground Rules: Determine what you can collect – copayments are a given, but will your payer contracts allow you to capture coinsurance and unmet deductibles? Despite an "urban myth" that collecting these is not allowed, most payers will allow you to do so. In the event that the payer does not, negotiate for the ability to collect upfront. Require your patients to verify with a signature that they understand your practice's policy to collect these monies at the time of service. Make sure they also understand any penalties you will charge for not doing so.

Many insurers will allow you to levy a recollection fee for delayed copayments. The fees typically run $10 to $20, but most practices waive those fees if the patient brings or calls in the payment (via credit card) by the end of the day. Most liability carriers recommend against refusing to treat a patient who can't pay at the time of service, but check with yours directly. All the same, there is no limitation or liability for asking for a copayment.

Set Things in Motion: The key to effective time-of-service collections is starting before the patient even arrives. When patients call for appointments, staff should establish expectations with a gentle reminder of your policy by saying: "We do expect payment at the time of service, Ms. Jones."

For established patients with a balance – not a past-due, mind you, but a due balance – ask for the payment when they are on the telephone scheduling an appointment. Teach schedulers effective scripts, such as "Ms. Jones, I notice that you have a balance. We can take care of that right now so you don't have to worry about it when you come in."

This can be followed with a request for payment by credit card over the telephone. This new protocol will mean that your schedulers effectively become collectors. But, with 85 percent of collection calls made between 8 a.m. and 5 p.m. reaching voicemail or answering machines, why not try use scheduling as an opportunity to collect – if only to make up for the ineffectiveness of most daytime collections calls?3 If the patient refuses to pay the balance at that time, no problem. By simply making the request, the expectation is set that you want – and expect – to be paid when they come in to the office.

Stay Out of Billing: For staff that are tasked with collections, nothing is as frustrating as working for a physician who constantly tells patients not to worry about their bills – or even agrees to write off everything. If you expect your staff to collect, do not undermine their efforts. Instead, simply tell patients who worry about paying that they can speak to your office manager or biller about the practice's financial hardship policy (the policy should clearly outline the terms and documentation required to have financial responsibility for services waived).

Know What to Collect: When receiving the patient, staff should always ask for the insurance card, scan or copy it, and note the financial responsibility outlined on the card. A $50 copayment for a specialist visit, for example, is common. The copayment should be collected at the front office; if not, the patient should be at least informed of his/her copayment, and told that it will be collected along with any other charges when they exit.

At check-out, staff should have the tools and information to calculate any coinsurance, unmet deductible and owing balance. It is important for them to request payment of all patient responsibility amounts before the patient leaves the practice site. To calculate the coinsurance and deductible, staff must know the allowable for the patient's health plan.

It's easy to set up a spreadsheet with your top procedure codes in the rows, and a column for each payer with which you participate. Then, instruct your staff on how to use the spreadsheet to look up allowables, and then how to calculate the coinsurance – frequently, it's a percentage of that allowable, such as 20 percent.

This may require a more sophisticated employee, but remember, you are investing in your practice's vital cash flow. You are also reducing the overhead associated with trying to collect that money later on. Technology will soon take the spreadsheet away – there are now vendors that will link your contracts to specific time-of-service payments, producing the exact amount of what the patient owes.

Another group of vendors offers pre-authorized credit cards. If the specific amount due can't be determined at the time of service, this option allows the patient to agree and authorize in advance to pay his/her portion (and receive a receipt) when the claim is adjudicated and responsibility is confirmed by the payer.

Ensure Collection from Uninsured: There is no "allowable" for those patients without insurance. They owe your full charge. But, let's face it, you're unlikely to ever see that full amount, so put in place a financial hardship policy. At the same time, consider a standard time-of-service "deposit" to request from uninsured patients – $100, for example, or an amount that would mirror your average commercial patient's copayment responsibility. For patients experiencing hardship, offer the details of your financial hardship policy.

Be Resolute: Your staff need to demonstrate that payment is expected. This is done when they learn to use the basic tactics quite common in nearly every other service setting:

  • Making eye contact and addressing the patient directly and then asking "How would you like to pay, Ms. Jones" (not "would you like to pay today?").
  • Writing out the receipt while asking for payment because it signals that you expect to be paid.
  • Requesting the payment for the copayment first; then, after gaining agreement to what is often a smaller amount, asking the patient for his/her remaining responsibility.

Time-of-service collections aren't easy, but they are necessary. Twenty years ago, you could rely on the reimbursement you received from payers. Today, this reliance will only get you into trouble – financial trouble, that is.

Pearls 05/2012

1. Collect Up-Front
Collect balances before, not after, services are provided. Give your appointment scheduling staff access to patient account data in the practice management system. Authorize them to collect credit card payments via telephone during scheduling and appointment reminder calls. Review all upcoming appointments to identify patients who have not followed through on payment promises made during the scheduling call. These patients also can be reminded of their past due amounts during a reminder call a day or two before their appointment in the office, as well as upon their arrival.

2. Collect Balances
Give all employees who schedule appointments access to information in the practice management system so they can look for any outstanding balances as patients schedule appointments. If schedulers need to work faster than the management system link-up will allow, then use automation to match the schedule of upcoming appointments to reports of patients who have outstanding balances. Run the comparison reports two to four days before to the appointment date so that staff can target these patients for appointment reminder calls.

3. Make It Easy
Accept major credit cards and debit cards. Make it easy to accept for payment at the time of service. Verify information, print the receipts, obtain signatures when required and send the patients on to their appointments.

4. Knowledge Is Power
Educate both the patients and the staff on the medical financial policies of the medical practice. Keep financial policies simple – make them easy to read and easy to access. Clarity of the "patient responsibility" (co-payments and deductibles) by all will ease collections that are due at the time of service.

5. Payment Expectations
Remember to reinforce your financial time of service (TOS) policy by posting it on your website, in the written patient 'welcome' packages, into scripts for schedulers and especially when making appointment reminder calls. Also, involve staff in "role-playing" a variety of effective ways to politely and directly ask for payment.

References
  1. MGMA Connexion, April 2010, Practice Perspectives on Patient Payments.
  2. The Kaiser Commission on Medicaid and the Uninsured, The Uninsured: A Primer, December 22, 2010; 2010 Kaiser/HRET Employer Health Benefits Survey, September 2, 2010.
  3. Televox, 2011.

United States