Navigating the healthcare payment process can be difficult and overwhelming for both patients and providers, with challenges centering around affordability, payment flexibility, and support.
This guide addresses some of the main factors behind patient collections complexity, and options for healthcare finance teams to enhance patients’ payment experience while improving efficiency and increasing cash flow.
Key patient collections terms to know:
- Bad debt: Unrecoverable expenses for healthcare providers due to patients’ inability to pay, insurance issues, and administrative errors.
- Cash flow: The movement of funds in and out of a healthcare provider’s business over a specific period of time, crucial for sustaining operations and services.
- Electronic health record (EHR): Digital records of a patient's medical history, treatments, and billing information, often used in management of billing and collections processes
- Patient financial responsibility: The portion of medical costs that the patient is responsible for paying, after insurance coverage.
- Point-of-service: The time and place where healthcare services are provided, often where upfront cost discussions and payment processes begin
- Pre-service: The phase before healthcare services are provided, often involving discussions on cost, eligibility, and payment options
- Post-service: The phase after delivery of healthcare services are provided, including assessing patient outcomes, managing ongoing care, and ensuring continuity of support
- Revenue cycle management: The process of managing patient payments, from charges and claims to collection and analysis.
Affordability, transparency, and usability
Rising medical costs are a major concern for patients. Many cannot afford to pay for unexpected care without significant financial hardship; nearly 20 million people in the U.S. (1 in 12 adults) carry some form of medical debt, and every year, billions of dollars in debt goes unpaid.
Even when medical care is planned for, the billing process can bring its own surprises. Upfront pricing and insurance coverage before services are rendered is often limited, and patients can often be confused about what they’ll owe on the day of their care and in the weeks and months afterward.
In a recent Flywire survey of over 2000 patients, 75% said that bills for medical expenses are too complicated. Healthcare billing statements are often laden with complicated medical codes, jargon, and itemizations. Patients must work to decipher the exact amount they owe and what exactly they are being charged for. In some cases, patients must navigate multiple unfamiliar systems to pay different portions of their bill, increasing the chances of delayed or missed payments.
Healthcare providers also have to deal with an increasingly complex billing landscape. From managing bill coding and compliance requirements to coordinating with numerous departments to complete billing statements, the process can be tedious, inefficient, and highly prone to error. Many providers’ billing processes are specific to their EHR system, which can introduce technical complexities that are not easily resolved without assistance from IT staff or external teams.
Small mistakes such as incorrect charges or claim denials can arise due to many reasons, ranging from communication issues, regulatory changes, or information silos and overload. These mistakes delay and prolong an already lengthy process, further straining provider resources, creating bad debt and affecting cash flow.
Payment flexibility
Even if they understand what they owe, many patients don’t feel like they have many options for how to pay it. 81% of patients Flywire surveyed said they would like the ability to pay for an expense over time. While some payment portals include payment plan options, the terms of those plans may not match a patient’s specific economic circumstances - and it may not be clear what happens if a payment is missed.
Providers can be limited by the capabilities of their EHR system and/or payment software in terms of what flexibility they can offer patients, and their staff may not be equipped to handle the added complexity that comes with tracking and reconciling payments across a longer period of time.
Patient support
Support can be essential in guiding patients through their bills, payment options, and the payment process, whether that happens pre-service, at point-of-service, or post-service. Limited access to customer support due to technological or language barriers can result in misunderstandings, disputes and ultimately, delayed payments.
Staffing shortages, especially in administrative roles, may limit the support patients can receive with their payments. As limited staff are stuck finding a way to manage a heavy workload, delays in payment processing arise and declining response rates contribute to steadily growing patient inquiries. High turnover rates exacerbate these issues, as constant recruitment and training consume valuable time and resources, resulting in operational inefficiencies.
How can the payments process be improved?
Given the above challenges, there are a few different avenues for improving the patient collections process:
- Flexible payment options: Offering patients options to pay in installments, set up recurring payments, or customize their payment schedules can all help make healthcare expenses more manageable, reducing the risk of missed or delayed payments and accelerating cash flow while improving affordability and the patient experience.
- Automating administrative work: By implementing automated billing reminders, real-time payment tracking, and digital reconciliation tools, providers can reduce the workload on administrative staff and expedite payment processes.
- Engaging patients in different ways: Consistent and accessible reminders of payment deadlines and providing appropriate support at every stage of the payment journey can ensure a more personalized approach and help patients stay informed, boosting overall patient engagement.
Where Flywire fits in
Flywire's intuitive payment portal makes it easier for patients to view their bills, set up personalized payment plans, and complete payments securely from various digital devices, without staff assistance. Providers get real-time tracking capabilities and automated reconciliation tools that integrate with their EHR system.
The result? More payments completed.