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?
First things first, what is a copay?
“Copay” refers to the payment a patient has to pay when he or she arrives at the office.
Essentially, it is a specific dollar amount that patients pay on the spot each time they go to the doctor or fill a prescription. For example, a patient may have a copay of $15 for a doctor’s visit or $10 for a prescription drug. Copays tend to vary from plan to plan, and not all insurance plans use copays.
The goal of a copay is to prevent patients from going to the hospital for just about everything. Without a copay, some patients would go and see a doctor for things they can probably handle on their own. These types of visits, multiplied across the entire healthcare system, would drive up insurance expenses.
It’s important to note that copays are not the same thing as deductibles.
While a copay is a fixed fee for service, an annual deductible is the amount a patient pays toward covered medical services before their insurance provider pays its share. For example, if a patient’s deductible is $2,000, this means the patient will have to pay $2,000 out of pocket for covered medical care before their insurance covers any expenses.
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:
- 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.
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 healthcare plans.
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.
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 insurance.
Given the number of individuals confused about foundational patient payments terms such as copay, 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.