Can Doctors Collect Deductibles Upfront?
For healthcare providers throughout California, one of the more significant aspects of your day-to-day operations is the collection of deductibles from patients. Traditionally, deductibles would generally be billed after the medical procedures were provided, which would often lead to delays in payment and even unpaid bills at times.
As a result, this naturally is going to affect your ability to invest in new medical equipment and other resources, which can be a huge hindrance for smaller practices in particular.
Nowadays, though, there’s an emerging question that’s on the minds of many medical practice owners: Can doctors take a slightly more proactive approach and make point of service collections instead?
What Are Deductibles?
Let’s set the scene before going into any more details. Deductibles are essentially a form of cost-sharing involved with health insurance work. This represents the total amount of money that your patients pay as out of pocket expenses for any of the healthcare services they receive before their insurance provider takes over (this includes prior balances, too).
Once your patient has met the deductible, the insurance company typically then covers a percentage of the remaining costs. Generally speaking, deductibles vary a lot in their amount depending on the patient’s specific insurance plan.
The Importance of Point Of Service Collections
Now that we have some background information let’s take a look at some of the most relevant benefits upfront payments can have on your overall healthcare revenue cycle.
Enhancing Cash Flow and Revenue Cycle Management
Understandably so, one of the main reasons you’d want to start collecting deductibles upfront is because it ultimately ensures that your practice has a more predictable and steady cash flow.
When you’re receiving payments at the time of service, you don’t have to worry so much about your practice’s medical spending, meaning you can generally cover all your operational expenses and investments far more promptly.
This basically reduces the reliance you might currently have on post-service billing, which minimizes the overall risk of any delayed or missed payments.
Minimizing Bad Debt and Reducing Outstanding Balances:
As a medical practice owner, you’re likely all too familiar with the accumulation of bad debt caused by unpaid deductibles and outstanding balances in general.
So, as a solution, point of service collection lets you minimize this, as patients that have already made a financial commitment through their deductible payment are far more likely to fulfill any of their remaining financial responsibilities.
This means your physicians and other staff members can actually prioritize providing quality care for your patients rather than wasting time chasing any overdue payments.
Considerations for Implementing Upfront Deductible Collection
Now, although this is an excellent way of providing your business with some relief as far as cash flow is concerned, there are still a few considerations you might want to make regarding any legal, operational, or patient-related issues.
Let’s take a look at some of the main factors to consider when your practice starts to adopt this approach.
Developing Clear Financial Policies
Before anything, you’ll always want to ensure that you have transparent enough financial policies and procedures so your patients don’t feel like there’s anything important being kept from them. Ultimately, you should aim to outline clear guidelines for collecting payments, including things like the timing and methods patients can use to pay.
Addressing Patient Concerns and Offering Payment Plan Payments
It’s natural for patients to have a few concerns or even objections regarding upfront deductible collection – after all, medical debt is a huge concern for tens of millions of Americans.
So, offering things like flexible payment options – installment plans or financing options, for instance – can be great for alleviating financial burdens for any patients that may find it slightly challenging to pay the entire deductible fee upfront.
Practical Strategies for Successful Upfront Deductible Collection
Fortunately, there are a few easy strategies you can implement to effectively implement this whole process, whether that’s by leveraging medical technology or utilizing data analytics.
Enhancing Patient Education
As mentioned, open and transparent communication with patients always helps when you’re trying to educate them about deductibles and the reasons behind upfront collection. Try to provide clear and concise information about the benefits of upfront payment, the expected deductible amount, and if there are any available financial assistance options for them.
Partnering With PMN
Alternatively, consider partnering with a reputable third-party medical billing company like PMN to streamline the upfront deductible collection process! PMN not only has the expertise and technology to handle your billing and coding, but they can also communicate with your patients efficiently.
To learn more about what PMN can do to increase your practices’ bottom line, feel free to have a chat with their support team at (949) 215-5055 for more information! Or, if you’d prefer, come visit their office in sunny Laguna Hills, Orange County, California, for an in-person conversation.
How Can Technology Help Streamline Upfront Deductible Collection?
Technology can be invaluable when you’re trying to simplify the billing and payment processes for your practice, whether that’s with EHR systems or convenient patient portals. The former integrates with billing software which makes the whole process more seamless, though these can be expensive for small medical practices, and it’s advised they partner with professional medical billing services instead.
Are There Any Legal Considerations When Implementing Point of Service Collection?
Absolutely. As the owner of a medical practice, you’ll always want to familiarize yourself with healthcare billing regulations, like HIPAA and EMTALA, in order to ensure compliance. Adhering to legal requirements essentially safeguards both the practice and the patients, which ensures that the upfront deductible collection is always conducted within the legal framework.