8 Patient Payment Collection Tips for Boosting Practice Profitability

It's shocking, but true: Almost 1-in-5 dental invoices are 90+ days past due, which puts a limit on practice profitability.

Patients often fail to make payments because they either didn't receive or weren't aware of the bill initially. This issue is compounded by a lack of communication or reminders from the practice, making it difficult for patients to understand and promptly settle their outstanding balances.

We've compiled 8 highly effective strategies designed to help you collect more patient payments, faster — so your practice revenue continues to grow.

Challenges in Patient Collections

85% of patients today want to pay their healthcare bills electronically. Yet 75% of providers are still relying on manual processes and paper statements to collect patient payments. This leads to some common issues:

• Inefficient tracking: The biggest challenge with manual payment collection is the difficulty in tracking outstanding balances, identifying which patients require follow-up for overdue payments, and effectively monitoring overall revenue performance.
• Increased administrative work: Manual payment collection requires significant administrative effort, including calling patients, printing invoices, mailing statements, and recording each payment in the practice management system — causing staff burnout and consuming valuable time that could be spent with patients.
• Patient concerns about security: Many patients are rightfully protective about their credit card or bank information — they won’t give it out over the phone or write it down on a check or statement that will sit in their mailbox. This highlights the pressing need for practices to accommodate patients' preferences for a secure, digital payment process.
• Human error: A simple mistake can lead to inaccuracies in billing, recording payments, and reconciling accounts.

Top Strategies to Maximize Patient Collections

Given the direct relationship between prompt patient payments and practice profitability, it’s important to invest in improving the collections process. Here are a few proven strategies that can help you get more patients paying on time:

1. Establish Clear Financial Policies Upfront

Having a clear financial policy in place is the first step to expediting payment collections from patients. Consider outlining expectations including:

• Payment obligations
• Accepted payment methods
• Due dates

Ensure patients have read through the policy on their first visit to clear any questions beforehand and avoid any future disputes. Here is an example of a general financial policy from ADA.

2. Provide Price Transparency

Providing a good faith estimate early in the treatment process helps patients understand their probable financial responsibility.

3. Collect Accurate Patient Information

Maintaining accurate patient records, including demographics, insurance details, and contact information, streamlines billing processes and minimizes payment delays and errors. More practices are using digital forms to collect accurate patient information before their office visit, enhancing the overall experience and ensuring a smoother process for both patients and staff.

4. Offer Flexible Payment Options

Consider offering options such as payment plans, partial payment before treatment, or time-of-service payments via cash, check, or card.

The best practice is to choose a few payment options that align with your practice's needs and patient preferences to avoid overwhelming your staff and patients.

One great option is Apple Pay Later. This enables patients to split charges into multiple installments, enhancing affordability for larger payments. Practices receive the full amount upfront, while all financing is between the patient and Apple.

5. Digitize Your Collection Process

One effective method for promoting timely payments is to utilize a digital system that streamlines payment requests and reminders. Allowing patients to conveniently view their outstanding balance and make payments through a simple link makes it easier for them to pay on time. 

Choosing a payment collection tool that syncs with the practice management system is crucial for real-time updates of patient information, billing details, and payment records. This integration eliminates the need for manual data entry and reduces the risk of human errors.

6. Create a Follow-Up Collection Sequence

Implementing a systematic follow-up program is essential to helping staff avoid manually chasing payments. Automated reminders, such as text messages or emails, can be scheduled for various stages of the payment process, including payment reminders, due date alerts, 7-day follow-ups, 1-month follow-ups, and final actions. Here are 6 ready-to-use payment collection templates.

7. Offer Staff Training on Payments

Empower your team by investing in their practice knowledge through regular training and ongoing education sessions focused on effectively managing and communicating your payment policies to patients. This way, your staff has the confidence to navigate challenging situations related to payment collection without compromising your patient experience. Consider having:

• Regular staff training on insurance benefits, financial policy, and payment systems
• Documentation of the process and templates for communicating with patients consistently
• Talking points if a patient calls with questions about their bill

8. Streamline Payment Tracking and Reconciliation

Payment tracking and reconciliation are fundamental aspects of your practice's financial operations. They enable you to identify outstanding bills and accurately record and reconcile payments with the services provided. However, managing this process manually can be complex. That's why many practices choose to utilize automated reconciliation tools to match payments to corresponding patient visits, procedures, or treatments, ensuring accuracy and efficiency in the reconciliation process.

Use Digital Patient Payments to Streamline Your Collection Process

Online payments offer a convenient and efficient alternative to manual, paper-based collections, enabling patients to pay their bills securely and promptly — and unlocking increased profitability for your practice. When implementing a digital payment system, keep in mind:

• Convenience and Accessibility: Let patients conveniently pay their bills online, anywhere, using their preferred device.
• Hassle-Free Automated Reminders: Automated patient payment reminders offer a standardized and efficient method for communicating with patients while alleviating the administrative burden on staff.
• Integration with Practice Management Software: Select a digital payment solution that integrates seamlessly with your practice management system to eliminate the need for manual data entry, reduce errors in the billing process, and streamline operations.

With NexHealth Payments, you can save valuable staff time while boosting collections with an online payments platform that syncs with your practice management system. Your staff can promptly identify patients with open balances following insurance reimbursements, send payment requests via text or email, and automatically sync completed payments to the correct patient and procedure in the practice management system ledger. Learn more→.