Boost patient collections, improve patient relations with an early out billing cycle

Let’s face it. Patient collections can be tricky—especially during a time when healthcare affordability is nonexistent. When is the right time to follow up on unpaid balances? And how should you do it? Empathy and sensitivity are critical, and you don’t want to come across as being aggressive or overbearing. The fear of overwhelming patients is why some providers wait until several months have passed before sending a follow-up invoice. In addition, providers may not have enough internal resources to follow up with patients more frequently. 

Whatever the reason, waiting to follow up with patients until accounts are past due doesn’t usually work. In fact, the longer an account remains delinquent, the less likely providers are to collect payment. Instead, providers can—and should—reach out to patients earlier in the billing cycle (usually between days 30 and 60) to open the lines of communication, set expectations, and collaborate to find the right solution. This patient collections approach—called early out billing—helps providers transform their revenue cycle and improve overall financial stability. 

Why is it important to consider an early out billing cycle? 

Today’s providers face many financial challenges: Medicare payments cuts, increased claim denials, rising costs, and more. Any patient collections approach that accelerates revenue recovery and improves cashflow is one that every provider should consider. An effective early out strategy is important because it:

• Decreases the administrative burden associated with patient collections. Patients pay sooner, which means less follow up is required. 
• Enables providers to identify and address coding and billing errors more quickly. An effective early out strategy sparks conversations about potential errors so providers can address them in a timely manner.
• Enhances financial forecasting for the business. Revenue numbers are more accurate when accounts receivable is up-to-date.
• Improves patient relationships and the patient financial experience. Being able to avoid insensitive collection agencies and empower patients to pay on time builds trust and engagement and creates a patient friendly billing experience.
• Promotes faster cashflow. Timely patient payments promotes revenue flowing into the business.  
• Reduces bad debt. Giving patients an outlet to discuss their balances—and find the right payment solution—improves the likelihood they will pay.

In addition, as providers look for ways to navigate a new rule from the Consumer Financial Protection Bureau omitting medical debt from credit reports, early out billing may be one solution. By collaborating with patients and offering customized payment plans, when needed, providers have a better chance at collecting those debts instead of having to write them off as bad debt.

How can providers develop an early out billing cycle?

Developing an effective early out billing cycle requires the following steps:

1. Establish clear guidelines on when the medical practice will engage in an early out billing cycle initially and at what intervals thereafter. With early out billing, timing is everything. At what point do patients typically pay their bills? And at what point are they less likely to pay them? Note that this timeframe may be different for each patient, and it’s important to understand patient behavior based on historical data. Once providers understand the data, they can establish patient-specific timelines for reminders as part of their effective early out strategy.
   
   
2. Decide how to engage in an early out billing cycle. Will staff call patients directly? Send automated email or text messages? Letters in the mail? Ideally, providers would be able to contact patients based on their preferred method of communication. Patients are typically more responsive and likely to pay on time when providers use personalized communication methods rather than a one-size-fits-all approach. Any form of outreach should include instructions on how to ask questions about any charges incurred, sign up for financial assistance programs (when applicable), or set up payment plans. Equally as important is integration with electronic payment portals, including online payment options, autopay, and multiple payment methods. 
   
   
3. Monitor the early out billing cycle to determine whether it’s working. Have patient collection rates and/or patient satisfaction increased since engaging patients in an early out billing cycle? Have days in accounts receivable—specifically aging patient accounts receivable—decreased? As patients provide feedback, it’s important to incorporate that information moving forward and continuously train staff and refine messaging for better engagement. This cycle of feedback and refinement is critical for any effective early out strategy. 

Effortlessly unlock stalled revenue with an early out billing cycle

Early out billing gives providers an alternative to writing off overdue bills or resorting to costly collection agencies. Using a proactive approach to patient collections, providers can fully customize communications via text, email, or paper statements to build trust, boost revenue, and enhance the patient experience. Learn how Inbox Health can help.

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