Building an effective collections workflow for patient balances isn't just about sending out bills and hoping payments roll in. It involves a structured process that starts with the initial statement and may end, in some cases, with external collections. Let's break down the key components of crafting a smart, actionable strategy for collecting patient balances.
The Foundation: Patient Statements
The first step in any collections workflow is sending out patient statements. But it's not just about dropping them in the mail. Clarity here is critical. Statements should clearly outline what the patient owes, why they owe it, and how they can pay. Avoid insurance jargon whenever possible—patients aren't insurance specialists.
Consider the frequency too. Sending statements every 30 days is standard, but for practices dealing with consistently high patient debt, bi-weekly statements might be more effective. And don't underestimate the power of electronic statements. Many patients prefer a digital copy they can access instantly, reducing the likelihood of the statement being ignored.
The Human Touch: Reminder Calls
Now, let's talk about follow-ups. Phone calls might seem old school, but they're effective. A simple reminder call can jog a patient's memory and prompt payment. Consider automating these calls if resources are tight, but ensure there's an option for patients to connect with a live person if they have questions.
These calls should be friendly and informative, not confrontational. Think of them as customer service, not collections. A patient might have forgotten to pay, misunderstood the statement, or even never received it—these calls are an opportunity to clear up any confusion.
Offer Options: Payment Plans
The reality is, not every patient will be able to pay off their balance immediately. Offering payment plans can be a game-changer. Tailor these plans to the patient’s financial situation. Start with a conversation about what they can realistically afford each month.
Avoid rigid, one-size-fits-all plans. Flexibility is key. Some patients might be able to pay off their balance in three months, others might need a year. Get creative—offer incentives for early payoff where possible, or reduce interest rates for auto-debit enrollments.
The Critical Step: Pre-Collections
Before jumping straight to external collections, establish a pre-collections process. This is a final courtesy to the patient—an earnest last attempt to settle the balance in-house. Use strong, clear language in communications at this stage, emphasizing the seriousness of the situation.
Consider sending pre-collection letters that clearly state the consequences of non-payment. This can often serve as the necessary push for patients to settle their accounts. Again, these letters should still offer options to resolve the balance internally before escalating the situation.
When All Else Fails: External Collections
Finally, when every other effort has failed, it's time to consider external collections. Choose a collections agency with healthcare experience—they'll understand the nuances of medical billing and patient interactions.
Before sending accounts to collections, notify patients with one last letter or call, giving them a 10-day window to make payment arrangements. Make sure this communication is direct and unambiguous—this is no time for mixed messages.
Metrics: Track and Analyze
A workflow is only as good as the results it produces, so measure everything. Track key metrics like the percentage of patient balances collected within 30, 60, and 90 days, the number of accounts sent to collections, and the success rate of payment plans.
Use these metrics to refine your process. Are certain payers leading to more patient balances? Perhaps there's an issue with how claims are processed or communicated. Are payment plans falling through? Maybe they need restructuring.
The Takeaway
Building an effective collections workflow for patient balances is about more than just chasing debt—it's about creating a system that respects the patient's situation while ensuring the practice's financial viability. Clear communication, flexibility in payment options, and strategic escalation to external collections are crucial components. By implementing a clear, measured approach, practices can improve their collections rate—and their relationship with patients in the process.
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