3 Reasons Patients Aren’t Paying Their Bills

July 10, 2019

If you struggle with getting patients to pay their bills, you’re not alone. According to RevCycle Intelligence, the average healthcare provider only collects 6.06% on the dollar for true-self pay and 15.51% for out-of-pocket costs after the patient’s insurance plan. If you believe this is due to patients not being able to afford their bills, you may not understand the full picture.
A McKinsey study found that 74 percent of insured consumers are both able and willing to pay their out-of-pocket medical expenses, up to $1,000 per year.
So why aren’t they paying?
Our company has spoken to thousands of patients who haven’t paid their bill in full, and even though some told us that they truly can’t afford to pay, many cited reasons that go beyond affordability. Some of these are quite humorous, actually. We’ve heard everything from patients not liking the waiting room or not being too fond of the front desk staff, to a patient who had just moved from Canada and didn’t realize his healthcare wasn’t covered.
Regardless of the variety of reasons patients give us, there are a few main themes we hear:

1. The patient didn’t receive or realize they had a bill in the first place.

Providers often assume once a statement has been mailed, the patient is aware that he or she has an open balance. However, younger patient populations don’t check their mailbox as frequently as you may think. When bills do get discovered, they often are set aside, to be dealt with at a later date. The problem is, these bills often become an afterthought and are then not dealt with until much later, or at all.
According to Inc. Magazine, millennials check their smartphones over 150 times a day on average. Cell phones are a great place to reach these patients if you really want your bill to be seen and dealt with quickly. So if your practice has not adopted text messaging as a way to notify patients of their open medical bills, it can be a good solution to getting the attention of this patient population.

2. The patient was confused by the bill, but hasn’t had the time to reach out and ask questions.

People are unlikely to fork over their hard-earned money if they don’t understand where it is going. And good luck finding anyone, even trained professionals, who don’t find medical bills to be complicated.
One of the main issues we see is that patients are confused when they get multiple bills for the same date of service. Most don’t realize the potential or understand the reason that one visit can be split up into multiple bills from the physician, the facility, the lab, and in surgical cases, the anesthesiologist as well.
A solution is to provide clear and simple billing statements, in an electronic format, and allow your patients to communicate with you both over the phone and digitally. Most patients don’t have the time to call during your normal business hours and ask questions. Give them alternative means to get their questions answered and it will help them understand their bills – an important first step to getting them to pay.

3. The patient wasn’t offered enough payment options, and cannot afford to pay the whole bill at once.

Collecting some money is better than collecting no money at all. Practices spend a lot of time trying to get patients to pay open balances in full, with limited effectiveness. Part of the struggle is that they have a one-size-fits-all approach they use with all patients. But in today’s world of high deductible health plans, more and more patients have unique circumstances, and their situations need to be handled individually.
Allowing the staff to design customized payment plans – for example, by creating different thresholds based on balance size – can help patients afford to pay their bills. And, working with patients based on their needs will help create a positive financial relationship with them, increasing the opportunity of retaining those patients in your practice.
Small improvements such as these can materially increase patient collections. Of course, there will always be individuals who will not pay their balances, even with the most effective patient billing operating model. However, the more you can do to improve your processes, communication, and payment options, the more likely you are to retain your patients and experience positive financial results.

About MedPilot

MedPilot is a leading AI-driven patient relationship management platform. Healthcare providers don’t have an effective way to contact patients about administrative and billing matters, relying instead on mailing expensive statements, juggling manual phone calls, and utilizing traditional collection agencies. MedPilot navigates patients through this healthcare experience. The company’s engagement platform personalizes outreach depending on who the patient is, and uses machine learning to optimize the experience and messages, based on the patient’s interactions.

 

Nathan Spoden

Author - Nathan Spoden
Nathan Spoden is the Co-Founder and COO of MedPilot, where he oversees the ongoing development of the company’s operations, product development, and business strategy. Prior to founding MedPilot, Nathan worked in revenue cycle management at Accenture and held product management roles in several healthcare technology companies. Click here for more info about MedPilot. 
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