How to Create the Best Payment Plan for Patients Impacted by COVID-19
No matter the current event, healthcare providers have to collect revenue in order to function correctly. However, the economic crisis brought on by the COVID-19 pandemic is already making revenue collection harder to navigate as many patients begin to struggle with their own revenue sources. As of April 9, the U.S. Department of Labor reports that one in ten Americans is without a job due to the COVID-19 pandemic.
Difficulty paying healthcare bills has adverse effects on both patients and providers. Not only do unpaid bills delay the hospital’s revenue collection, but out-of-pocket-costs can dissuade patients from seeing a doctor entirely. Even in 2019 before the pandemic, up to 33% of Americans reported that either they or a family member had delayed treatment for a medical condition because of costs (that’s the highest this percentage has been in at least the last 20 years).
In times like these, payment plans are a great option to help individuals and families impacted by COVID-19. A payment plan option can help alleviate patient anxiety, ensure stable revenue collection, and build trust between both parties. Most importantly, a payment plan can re-introduce consistency into your institution’s billing cycle by decreasing the number of late payments.
Benefits of Offering a Payment Plan
Payment plans are an excellent way to stabilize your revenue collection and can seriously improve the patient experience. Here are some advantages of offering a payment plan:
Building Patient Trust
Many patients who would normally have no problem paying their bills on time will find themselves struggling to make payments in the coming months. Because the economic repercussions of the COVID-19 pandemic are predicted to last much longer than stay-at-home orders will, what might be a payable amount for a patient now might not be next month. To manage this uncertainty, offering a payment plan provides patients and healthcare providers with peace-of-mind. Patients feel more comfortable making an appointment knowing that they have options for payment, and healthcare providers have a more reliable revenue collection system.
Payment plans can also provide a more reliable way to secure collections. Without payment plan options, healthcare providers run the risk of uncollected patient payments. In addition to the hassle of extra administrative work to collect these payments, providers have more pressing issues to tend to, especially during a pandemic.
Finally, when a payment plan is structured correctly and clearly communicated to both current and prospective patients, you market your business as an option that is more affordable, more understanding, and more trustworthy than your competitor. Whether or not the competition actually has a payment plan in place, being proactive and positioning your business’s plan as a primary selling point can pique the interest of prospective clients looking for better customer service than what their current provider is offering.
Creating a Payment Plan
Once you’ve decided to incorporate a payment plan option into your billing structure, there are a few important components to think through. There is no “correct” way to structure a payment plan because different healthcare providers face a different combination of issues, from geographic location to size to client base. Having a conversation with your billing service can help you think through the specifics to determine a solution that works for everyone.
Determine a minimum payment amount
While a $10 minimum payment might seem like a good idea because most patients will almost certainly be able to pay this sum each month, a low minimum payment like this will drag out the payment period longer than necessary. If you decide to apply an interest rate, a minimum payment this low could be more harmful than helpful to your clients.
In reality, most patients will be able to pay $25 or $30 per month. With a minimum payment in this range, providers are now collecting revenue efficiently while still easing the patient burden of massive healthcare costs. $25 is also the minimum payment that many starter credit cards require.
Establish a plan for those who simply cannot pay
While most patients will appreciate and adhere to payment plan deadlines, there will always be a small handful who simply cannot pay their bills. Make sure to proactively establish a plan for those who fall under the federal poverty line and what the process will be for proving that the patient fits in this income category, as well as determining what Medicaid or charity options are available.
Decide on an interest rate (0% is just fine)
In some cases, an interest rate can boost revenue while incentivizing larger monthly payments. However, during an economic crisis such as today’s, providers may consider waiving an interest rate in the name of compassion.
Additionally, if the primary goals of implementing a payment plan are to build trust and make it as easy as possible for patients to pay their out-of-pocket costs, collecting interest could be counter-intuitive, and as mentioned above, predatory. If you decide an interest rate is needed, keep it as low as possible.
Consider a down-payment option
Offering an on-site down payment ensures that patients are paying as much as they are able to up-front. If you decide to implement an interest rate, a down-payment is another way to incentivize a larger initial payment.
Patients will be cautious of scheduling and keeping appointments if they aren’t aware of payment plan options. Announcing your payment plan options by incorporating them into your regular e-newsletter blast, updating your website, instructing receptionists to inform patients of their options when they call the office, and mentioning the plan during patient visits will help further establish a clear line of communication, decrease patient anxiety, and ensure that patients keep appointments.
The ability to increase patient payment collection will directly affect the cash flow and financial health of your practice. By offering patient payment plans, you can increase collection, improve the predictability of your cash flow, and boost the patient experience.
MailMyStatements offers clients the ability to choose from established merchant vendors in the healthcare industry. Our partnership varieties offer an exceptionally smooth and personalized onboarding experience, eliminating disruption and streamlining the user experience. These platforms offer additional technology like automatic payment withdrawals and next day funding. Learn more about these options today!