How a “Pay Up Front Policy” Can Benefit Your Eye Care Practice
by Christine Schneider, VP of RevCycle Partners
Do you have a pay-up-front policy? Or do you wait until you receive your patient’s Explanation of Benefits (EOB)?
You might think it doesn’t matter – you’ll get paid eventually. Or maybe you worry that asking for payment upfront might negatively affect your patient relationship: Will they be offended? Will they switch to a doc who doesn’t ask for payment up front?
The reasons for not making co-pays and deductibles due at the time of the examination actually are less about serving the patient well and more about the administrative staff not doing their homework.
Why Some Eye Care Practices Don’t Demand Payments Up-Front
There’s always too much to do and too little time to do it. That’s the daily grind of running an eye care practice. There are at least two reasons why practices resist:
First, seemingly low-priority tasks often get ignored.
It is not unusual for administrative staff not to take the time to contact third parties for which they are a provider. The task is to figure out what co-pays are due at the time of the visit. However, if the information isn’t visible on the insurance card, a call to the insurance provider can resolve the question.
Yes, this sometimes can take time (especially with Medicare and Medicaid)—but no more time than following up with a patient after months of a bill not being paid.
Second, the patient doesn’t know off the top of his or her head how much of the deductible has been met. Often, the patient assumes the office will have that number at hand. Then, to avoid a lengthy call with an insurance provider, the administrative staff agrees to bill the patient after the fact.
This short-term solution can lead to long-term problems in your practice. One is a larger accounts receivable (AR) than necessary. Another is a waste of staff time chasing patients for money down the road. The coup de gras is, ultimately, the loss of money. Studies show that the longer amount of time that passes before patients pay, the less money a practice will collect. Here’s the stunner: A study confirmed that receivables at 30 days have a 90% probability of recovery. At 90 to 120 days, the number is 20% (InsideARM.com).
How to Institute a Pay-Up-Front Policy
Serving the patient is paramount as an eye care provider. This is foundational to building a sustainable practice in any community. However, it is possible to institute a pay-up-front policy without damaging the patient relationship:
First, take the time to think through the policy. A payment policy clearly identifies what you expect of a patient and what the patient can expect of you. A payment policy might include the following:
- The due date of payment
- Payment responsibility (for instance, self-pay patients are responsible for the entire amount of the bill; patients in health plans are responsible for any amounts not covered by their insurance);
- Details on co-pays and deductibles (e.g., co-pays are collected at each visit without exception, deductibles will be researched by the patient prior to visit);
- Forms of payment accepted (e.g., personal checks, debit cards, credit cards);
- Nonpayment policy (Do you enlist a collection agency’s help after three months of nonpayment?); and
- Missed appointment fees (Do you charge a percentage of the office visit?).
Second, post the policy.
Obviously, the policy needs to be up on your web site. Also, you may want to send a warm letter (yes, letter, not an email) to your patients to alert them of the change. You definitely don’t want to wait until the patient is signing in to figure out co-pays and deductibles. If the policy is a radical change to your previous policy, explain the changes and how you will work with the patient to identify their payment in advance of the service.
Third, alert patients by email once they make an appointment. Again, this is a warm, friendly email that includes the payment policy. Include the synopsis of the policy with an “Oh by the way …” at the end of the email – and include a link to the full policy on your web site.
Fourth, create signage where you engage the patient at the sign-in desk – and include the policy in any documents that a patient signs up front.
Of course, there are exceptions.
Some patients have genuine financial difficulties. They lose jobs, get divorced, or fall on hard times. As a doctor, you got into the business of caring for people, so you (and your staff) know when to provide extra care and bend the rules.