The key to successful upfront billing?

As reimbursement rates have declined and more employers are offering their employees high-deductible health plans, doctors’ offices are more dependent on often less reliable payment directly from patients. In 2012, strategies for handling billing those patients will be a focus of doctors’ offices experts say.

A healthcare provider’s revenue stream used to come mainly from insurance companies, said William Collins, Heartland Payment Systems’ executive director, vertical market strategy, with payment coming after services were rendered. Direct payments from patients are increasingly accounting for more and more of the revenue stream, he noted, making it crucial that providers put policies in place to capture payment from patients.

“Practices have to implement changes, both cultural and operational, that make it a standard practice to discuss financial obligations with their patients and ask for payment when applicable,” he said.

Practices should implement revenue cycle management solutions from front end to back by putting in place policies and procedures about the collection of payments from patients, Collins said. Staff should be trained on those procedures and policies and make the payment process patient-centric, including using tools that allow patients to make payment easily, like allowing patients to pay with a credit card.

Having financial discussions with patients is a shift in how things are done in medical offices, said Patrick Lukacs, chair of the Healthcare Billing and Management Association’s electronic health record committee, but they absolutely have to happen.

As patients are hit with the bills from the variety of providers involved in offering a service, doctors’ offices are going to find themselves in a long line of those trying to collect payment, Lukacs said – unless they get ahead by getting payment up front.

It may seem awkward at first, but up front payment for service isn’t completely alien to patients. Take a look at how the dental market handles payment, said Collins. “Much can be learned from the dental market model,” he said. “Dentists have mastered being able to collect that patient payment up front. We can all relate to the dental staff explaining a procedure, the cost of that procedure, how much our insurance will cover for the procedure, and what we as patients will owe at the time of the procedure.”

Sometimes doctors are too reasonable in their billing dealings with patients, observed Adam Dorin, MD, founder and president of America’s Medical Society, a nonprofit organization based in California. “To increase the likelihood of being paid, many will offer 20 to 30 percent discounts … for payments made in one lump sum prior to the delivery of care,” he said.

While it’s important that offices work with their patients and be reasonable in handling patients’ financial situations, said Lukacs, offices that habitually discount services in order to receive some payment will not survive. Work with those patients instead, he said, by making it easy for them to pay, including setting up payment plans and automatic payment reminders via an online patient portal.