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Practical Strategies to Handle Late Patient Payments

Staying on top of late or missed payments is an important part of running your practice.

Getting paid promptly improves your cash flow and frees up your staff to focus on aspects of customer service other than tracking down patients for payment.

Unfortunately, late and missed payments are common; 20 percent of insured patients still have trouble paying their medical bills. A study published in Health Affairs in July 2018 reported that 16 percent of Americans’ credit reports included medical debt. At age 27, when medical debt peaks, patients averaged $684 of collections debt. That number doesn’t include medical debts not reported to a credit bureau.

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So how can you encourage patients to pay on time — and collect on overdue payments in a kind, respectful manner? Here are the strategies other practitioners rely on. 

Set payment expectations upfront

Maybe that walk-in patient thought you were in their network, before getting hit with a larger-than-expected charge they can’t afford. Unexpected fees can put a damper on patient’s ability to pay on time. “If proper insurance verification is done and proper procedures are in place, this will eliminate 90 percent of your problems collecting payment,” said James Fedich, clinic director at Village Family Clinic in Hackettstown, New Jersey. 

Prevent this problem by training your staff to confirm a patient’s coverage and review financial responsibility before their appointment, advises Fedich. Encourage prospective patients to use tools like an insurance checker to ensure you’re in their network and avoid any surprise out-of-network fees that could result in late payments.

Offer a range of payment options

Getting a patient to pay their whole bill at the office may be your best bet to collect in full, given that just 7 percent of consumers consider medical bills the highest or even second-highest priority among their bills. Train staff to collect payment while patients are in the office. Ask upfront which mode of payment they prefer and have their bill ready by the time their appointment is finished. 

You could also give patients the option to keep a credit card on file for automatic billing and use during subsequent appointments. “The majority of our clientele prefer the ease of a card on file,” said Kelsey Zamoyski, an occupational therapist at Defy Therapy and Wellness in North Miami Beach, Florida. “Having automatic credit card charges takes away the burden and hassle from both the client and clinician and keeps late payments to a minimum.”

A partnership with a trusted interest-free debt provider may also be worth pursuing, so that new patients can seek out financing before they come to your office. Diana Seehease, a registered nurse and office manager at Northern Michigan Vein Specialists in Traverse City, Michigan, has found that interest-free financing puts patients at ease and helps them pay on time.

For patients who don’t want to keep a card on file or utilize a payment plan, consider incorporating online and mobile payment options. This gives you multiple ways to settle invoices and could help raise overall patient satisfaction.

Stay efficient and professional

Advise your staff to process and send invoices immediately so patients understand that prompt payment is expected. Include a phone number on each invoice so patients can contact you with questions, and review patient accounts after their visits to catch any late or missed payments before they accrue more medical debt.

If you’re collecting payment after service, make sure your office has the information needed to follow up on any late payments. When patients are in the office, ask them to confirm their contact information — including their work, cell and home phone numbers, home address and email — so your staff can get in touch about overdue payments if necessary. 

It can feel awkward to follow up regarding overdue payments, so advise your staff to follow a set of scripts to keep the conversation on track. Time the conversation when your patient is likely to be relaxed — for example, in the evening rather than when they’re at work. The tone should always be cordial and compassionate. Medical care, for some patients, is an enormous financial burden. This approach both improves chances of receiving the late payment and helps you maintain a positive patient-provider relationship going forward.