Today's patients are responsible for footing larger portions of their surgeries than ever before, making it critical to the financial health of your facility that you collect co-pays, co-insurance and deductibles at the time of service — and later, on the back end and with the same diligence, collect patient balances in full. If that sounds like a lot to collect from patients, you're right. But I'm here to tell you that it's doable, especially if you make a staff person responsible for your collection efforts.

Last year, our front desk collected about $100,000 in time-of-service collections from our 3,000 or so patients. That's $100,000 out of a possible $110,000 (yes, some patients got away with, ahem, leaving their wallets and pocketbooks in their cars). In the weeks and months after surgery, we collected about $15,000 a month — $180,000 a year — from patients to settle their accounts after we'd filed claims with their insurance carriers. Here are 3 keys to our success.

Advise patients of their financial responsibility beforehand
Get a sense of each patient's financial landscape before the day of surgery. If a patient truly cannot pay his obligation, for example, find out on the front end and react accordingly (if the patient can't pay, maybe your facility isn't the right location for this patient). Verify their insurance benefits and their financial responsibility. Research the patient's deductible and find out how much he's met. What's his co-pay? What about his co-insurance amount? You can find these things out by calling the patient and by reviewing the insurer's website.

To give patients a sense of what they'll owe, send them a letter in advance of their surgery that spells out their obligations in as much detail as you're able to provide. Some numbers, like deductibles, are moving targets, but a co-pay is a fixed dollar amount that's printed on the patient's insurance card. Head off potential problems early on. "You know, it looks like you're going to have a really big balance after surgery," you might say. "We don't want to send you to collections after 90 days. Let's work out a reasonable payment plan."

Collect time-of-service fees
As soon as patients enter your facility, ask them to settle up. If they try the "I-left-my-pocketbook-in-the-car" excuse, counter with this. "That's OK. Your husband can bring it in when he comes to get you." Staff might feel uncomfortable asking patients for money, but this is a business. It's best to collect money with tact and diplomacy, but you're not running a charity. Track how much you collect from patients on the day of surgery. Our benchmark is 95%.

It's likely that a growing number of patients will have high deductibles, some as much as $5,000. Hold patients responsible for that — maybe not within 3 months, but certainly within the calendar year. It's not sufficient to just collect co-pays at time of service. We tried for a while to collect deductibles at the time of service, but found that oftentimes we were refunding money to the patient. If an insurer processed another provider's claim before ours, the patient didn't have a high deductible anymore. So we recommend only collecting the deductible if it far exceeds the total cost of surgery. In that case, ask for a significant deposit at the time of service.

Track down patient balances
Rather than sitting idly by while the missed payments pile up, call patients if they haven't paid at least one-third of their balance after their first statement. "We haven't gotten your full payment," we tell them. "We need to talk to you about this." Know what we've found? Patients appreciate this call because we're connecting with them. We're working through a problem with them, person to person, and giving them options, rather than letting the case go to collections.

If insurance denies a claim, call the patient and tell him you're going to appeal, but mention there's a chance he might have to pay the full amount. Send the patient a statement with the balance. If it's not paid off after 1 statement, call the patient and offer to let him pay the balance off in 3 monthly payments. You'd rather have an outstanding patient balance on your accounts receivable than write it off to collections, especially if you have a plan to collect it.

Taming unwieldy patient balances
The goals of your collections program are simple: to improve cash flow and to collect all that you're owed. The fewer delinquent patient accounts you have to turn over to an outside collections agent or, worse, write off, the better.

Unwieldy patient balances are difficult to tame. They leave a messy trail of small payments and missed payments. We've found it's best to take control at the outset. Here's what I mean. You file a claim with an insurance carrier, and 60 to 90 days later you're paid a portion of the billed charges. The balance transfers to the patient. And so begins the Great Money Chase. You generate an initial patient balance due statement and mail it to the patient. If you're not paid in full in 30 days, you send out a second statement. If you're not paid in full in another 30 days, you generate a third and final statement with a note that threatens to turn the account over to collections if the patient doesn't clear the balance. See the trouble with chasing the money? In 90 days, the patient is deep in arrears and you're in no danger of being paid. All of this plays out against an adversarial backdrop: Pay up or else.

We used to routinely send all delinquent accounts (we defined as 90 days after the third statement) to a collections agent. Nobody wins when you turn an account over to collections. Patients sink deeper into debt and their credit rating takes a hit. The collection agent tacks on a 33% fee to transferred accounts, as well as any court costs. And not only do we lose control of the account, but we're lucky if we receive 30% of what's owed to us. Now it's rare that we have to send an account to collections.