Using Payment Integration to Boost Self-Pay Collections

As healthcare costs rise so does patient responsibility or “self-pay.” This means higher medical deductibles and patients shouldering a higher share of payment responsibility for their healthcare bills. With this trend comes another problem for healthcare providers: successfully collecting self-pay.

A McKinsey & Company study revealed that providers expect to collect only 50 to 70 percent of a patient’s balance after a visit. A new study by TransUnion Healthcare also showed that patient responsibility after insurance increased 88 percent between 2012 and 2017. There are associated risks involved with self-pay accounts. The cost to collect could reach up to three times higher than on commercial insurance accounts. In addition, the longer a self-pay balance goes unpaid, the harder it is to collect.

To remedy this situation, practices need to embrace integrated payments solutions that simplify the payment collections process for patients.

The need for payment integration

With the increase in patient responsibility, providers would have to collect more from patients more frequently and in higher amounts than they ever have before. A major reason for the lag in self-pay collection is because of inefficient manual collection processes.

For example, it’s not uncommon for patients to complain after making a payment online when they see their balance unchanged on the provider’s patient portal. Without payment integration, real-time update on payment status would not be possible. Imagine the patients’ frustration when they receive a mailed statement or a phone call payment reminder of an amount owed that they have recently paid through their preferred method.

It has been the experience of some patients to receive multiple statements in different billing cycles for just one trip to their healthcare provider. This confusion as to what has already been paid and what still needs to be paid negatively affects the revenue of a practice. Additionally, it forces back office staff to spend more time with collections and reconciliation.

The benefits of payment integration

Integrating payment processing systems with electronic health records (EHRs) will dramatically reduce costs associated with billing errors, duplication, and reconciliation. Payment integration allows patients to access their accounts online so they can see what their insurance has covered, verify recurring payments, check their payment status, and make payments anytime and anywhere.

Payment integration also provides patients with multiple payment options, including kiosks in lobbies, online portals, and mobile pay. Patients get more satisfaction when they are able to pay using their preferred payment method. They also appreciate the ability to view and pay bills online and enjoy flexible pay plans, credit availability, and financing options. Providing your patients with multiple payment options that cater to their convenience will increase the likelihood of collection.

Providers that use automated payment systems that can post patient payments directly to the patient accounting system report collection increases and AR reductions.

Many providers have tried situating a kiosk within their facilities so patients can easily make their payments. Patients register at the kiosk and make payments for their surgery in advance. A facility in North Bergen, New Jersey noted that their bad debt has reduced by 35 percent since their kiosk was installed two years ago.

Integrating payment processes would also eliminate the manual processes for posting payments. Daily payment updates and adjustments on self-pay accounts can even provide meaningful data on a patient’s’ propensity to pay. The actionable insights that can be gleaned from this data through the use of automation software can be very helpful in improving collection processes.

David Hamilton is the CEO of Mnet Health Services, a Business Process as a Service (BPAAS) and Financial Technology (FinTech) firm with a specialized focus on End-to-End Revenue Cycle Management, Care Coordination, and Quality Assurance in the healthcare industry.