Copays: 5 Best Practices to Collect From Patients

Patients are now responsible for a larger percentage of their bills than they were in the past. This has a lot to do with the post-pandemic increase in self-employed patients.

As a healthcare provider, you need to focus on the tasks and activities that matter most, the ones that help you support your patients. And yet, the hard truth is you can’t effectively run your practice and focus on patient health without a healthy balance sheet.

To survive these trying times, you need to focus on collecting copays from your patients as well as properly adjudicating insurance claims.

In today’s article, we are going to explain how to collect copays from patients. The best practices below should help drive cash flow for your practice and improve the patient experience.

Let’s dive in!

“What Is a Copay?” Coinsurance Clarity for Patients Is Key

Nowadays, every patient should be familiar with a certain degree of cost sharing after a doctor visit. But we’d be remiss if we didn’t share that a seemingly harmless question can also be used as a way to defer cost.

Patient intent isn’t necessarily malicious. However, with the rising costs of prescription drugs, insurance premiums, and health care expenses across the board, patients are trying to minimize their outlay whenever possible – especially when they don’t understand what their health insurance plan is there to do.

You’ve likely seen this in action. Your office staff is ready to book a follow up and the patient tries to slide towards the door or at the very least, expresses surprise about owing a copay.

Office teams that can cheerfully connect the dots create a great office experience.

Clearing the Murky Copay Waters

As health care professionals, we all know that the goal of a copay is to prevent patients from going to the hospital for just about everything. With some financial skin in the game, we can assume that patients have real cause to be seen.

Without a copay, some patients would go and see a primary care physician for things they can probably handle on their own without professional healthcare services. Of course, this isn’t the best explanation for your office team to use!

It’s important to state that a health insurance policy doesn’t pay for everything and that nearly all of them, in spite of premiums and deductibles, require cost sharing in the form of a copay. In other words, a copay is effectively an office visit fee at a reduced cost versus the fee amount for those without health insurance – even with a patient cash pay model.

Another helpful way to frame this cost is a comparison to pharmacy costs. Mainly, the dollar amount for a copay at a doctor’s visit is similar to the requirement of a copay for prescription drugs. Most patients will understand the need for a copay with this explanation.

Also, it’s important to note that copays are not the same thing as deductibles. This misconception is another common objection to patient responsibility with health care costs.

To reiterate, the copay amount can be understood as a reduced fixed fee for services rendered by the provider (thanks to the patient’s health insurance policy). The annual deductible is the amount a patient pays toward covered medical services before their insurance provider pays its share.

Understandably, patients are feeling the pinch of rising health insurance premiums. All they see are costs mounting upon costs. It helps to walk them through the nuances of coinsurance as a way of reducing the overall costs.

It sometimes helps to share a customer story about a patient who’s not covered by a health insurance plan. Stressing how your patients come out ahead leads to an overall better experience (and seamless collection efforts).

To learn more about copays, check out this great article from Investopedia.

Collecting Copays From Patients: 5 Best Practices

Now that we understand the definition of copay and how it is typically used, it’s time to look at some strategies for collecting copays. The following strategies will help you develop a holistic approach to medical collections, one that leverages technology and transparency to provide a better patient experience and a healthier bottom line.

1. Focus on Payment at Time of Service

If you are struggling with collecting copays, consider developing an upfront payment policy.

This has become the norm for successful healthcare providers as it 1) eliminates the challenges of collecting overdue balances, and 2) reduces overhead expenses because your hospital or practice does not have to hire as many people to balance the accounts.

When it comes to upfront patient payments, the most important action that healthcare providers can take is to develop an upfront payment policy. This should be a formal policy (i.e., in writing) that is distributed to patients before their visits. An ideal policy will cover the following topics: health insurance plan, insurance company, copay collection, policyholder, office visit, emergency room visit, credit card, collection efforts, checkup, billing practices, telemedicine, practice website, hospital visit, patient account, healthcare costs, health plan, health maintenance organization.

• The party responsible for payment.
• When payments are due (i.e., at the time of service).
• What will happen if payment is not received.
• Payment options for patients.

A comprehensive patient payments policy will serve to inform patients and set expectations. This policy can (and should) be sent out via email and should also be shared in hard copy so patients can review and sign the policy before receiving care.

2. Consider a Patient Responsibility Form

A second best practice for collecting copays is to ask your patients to sign a financial responsibility payment form. Patient responsibility refers to the portion of a medical bill that a patient is required to pay rather than their insurance provider.

A patient responsibility form is a printable statement in which the patient acknowledges their financial obligations. When signed, patients admit that they are responsible for any medical charges that are not covered by insurance, including deductibles and copays.

If you need help determining total patient responsibility for your practice, there is a relatively straightforward calculation you can use. Take a look at the total amount of revenue you generate. Then, take a look at the total amount of that revenue that your patients are responsible for with their health insurance plan.

What percentage is this? This is total patient responsibility.

3. Double Down Staff Training

As most payments tend to be submitted at the front desk, practice management should focus on ensuring that their front desk staff is adequately trained to not only request payment upfront but to answer any questions that patients may have.

Training can start by reviewing your organization’s upfront payment policy, but can also be more in-depth in cases where new software has been deployed, or patient processes are in need of a radical redesign.

At a minimum, your staff should be able to:

• Determine a patient’s financial responsibility.
• Effectively communicate payment policies, particularly the necessity of upfront payments (they can be courteous but firm).
• Accept patient payments and navigate your POS system.
• Explain the finer points with respect to how insurance works (a pain point for many patients).

Once clear guidelines are in place, and your staff is trained, consider designating a specific staff member to oversee upfront payments. This will avoid confusion and provide a better patient experience. In the end, training sets both your patients and your staff up for an engaging and rewarding healthcare experience.

4. Leverage Technology to Make Payments More Convenient

As a society, we used to seek out information relating to products, services, and experiences. And yet, in the digital age, we are now fully accustomed to products, services, and experiences being delivered to us (think Amazon or Netflix).

Here’s something to think about–why should the patient payments experience be any different?

Today, patients expect a healthcare experience that is similar to other areas of their life. In other words, patients want an experience that is digitally connected, personalized, and offers convenience. It is here where healthcare professionals can leverage technology to develop modern processes and provide patient payment plans that better align with the expectations and preferences of patients.

In this respect, digital payment options truly shine.

It’s also important to understand that not every patient will be able to pay upfront. As such, a great option is to provide patients with different digital payments options. Digital payments improve business proficiency, help avoid medical collections proceedings, simplify record keeping, and (most importantly), meets the needs of the modern patient.

A great example is AccessOne’s MobilePay. Our solution will send patients a post-appointment reminder about their outstanding payments (via SMS). Then, with a single click, patients can access a payments page that shows them all the information about the bill and their payment options (including one-touch payments).

The result? Improved patient satisfaction while your practice increases the percentage of patients who pay their bills on time. Want to learn more? Check out our BestMed customer story.

5. Help Patients Improve Their Health Insurance Literacy

Collecting copays depends on health insurance literacy. In a nutshell, this term refers to the extent to which patients have the ability and knowledge to understand the intricacies of their health insurance plan .

The reality is that many Americans have low health insurance literacy. A recent survey published in Forbes Advisor demonstrated that up to 77 percent of patients are confused by basic healthcare terms such as copay, deductible, and coinsurance. Patients are often unfamiliar with the terms used in their health insurance plan.

In fact, our own survey from 2021 found that just 28 percent of insured consumers felt they had a strong understanding of the services covered by their health insurance plan.

Given the number of individuals confused about foundational patient payments terms such as coinsurance, it’s no surprise that medical bills typically lead to frustration for all parties involved.

There is a range of diverse factors impacting healthcare literacy that are outside of the control of healthcare professionals (for example, education). And yet, providers can implement a number of low-cost strategies that will go a long way in promoting health insurance literacy among patient populations.

A few best practices at the office include:

• Create a welcoming, transparent, and comfortable environment.
• Avoid medical or business jargon and speak in plain terms.
• Make sure all information is available both digitally and in print.
• Encourage questions.

To learn more about health insurance literacy, check out our article on the topic.

AccessOne: More Payments, A Better Patient Experience

And there you have it!

Five actionable best practices that can help your healthcare organization improve the patient experience and encourage patients to pay their copays. If you’re interested in learning more about how AccessOne is helping improve healthcare one payment at a time, don’t hesitate to reach out.

On the other hand, if you would like to demo one of our agile payments solutions – from MobilePay to Choice Repayments to Flex Repayments – you can see AccessOne in action by booking a demo today.