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Practice Management Alert

Swipe Your Way to Easy Fee Collection

Published on Thu Aug 01, 2002

If your practice does not accept credit and debit cards, you may be missing out on hassle-free fee collections. Patients are increasingly willing to pull out their plastic at the checkout counter.

"Most patients do not have the money to make cash payments in full," says Gwendolyn Ousley, CHCS, collection manager, Esse Health, St. Louis. "Therefore, practices should accept the patients' good will to pay their debt through credit-card payments, etc. Our collection motto is, 'If we can take it to the bank, then we will accept it.' "

What Are the Benefits?

Accepting credit and debit cards has many benefits:

  • Less embarrassment for patients: For example, a patient doesn't have to admit that he has only $2.36 in his pockets.
  • Expediency: A patient can give a credit-card number over the phone or through the mail. And with a patient's permission, practices can automatically bill a card for deductibles, coinsurance, and other balances after the time of service, when an insurance company has determined who owes what.

    "The permission form is a signed statement that indicates it's acceptable to bill a credit card based on the amount due," says Elizabeth W. Woodcock, MBA, FACMPE, director of knowledge management, Physicians Practice Inc.

    Ousley suggests you get the patient's verbal commitment while you're obtaining authorization. Then, give the patient the confirmation number and proceed to debit or post the credit to the account. Once the transaction is approved, Ousley sends a written confirmation to the patient that says: Thank you for your credit payment today in the amount of $_____. Your receipt and/or carbons are enclosed along with your confirmation number for _____ date(s) of service.
  • Reliability: You cannot always count on patients having a checkbook or a $20 bill on them for a copay, but most will have plastic. And the more payment options you offer patients, the more at ease they will be.
  • Increased collections: "The ability to offer a credit-card payment option to patients while speaking with them over the telephone can generate an extra several thousand dollars per month in some practices," says Chris Uthe, director of centralized billing services for iLIANT Management Directions, Winston-Salem, N.C. For years consumers have purchased clothes, flowers, gifts and other items over the phone, he points out. "Why not medical services?"

    How Should You Process the Transactions?

    Typically a practice relies on a "merchant account" from a bank to process card transactions. Banks charge a 2 to 3 percent fee for each transaction and often an additional fee of about 25 cents. Following are some tips to consider when setting up your charge system:

  • Reduce your fees. Consider turning your card processing over to a credit union or a wholesaler such as Costco, which advertises a 1.53 percent fee plus 21 cents per transaction. Even if you decide not to go this route, knowing all your options will help you to negotiate a better deal with your bank.

    Don't let the fees discourage you from accepting plastic. What you would pay the bank for processing a $20 copay is about the cost of mailing an invoice and you are guaranteed payment.

  • Get the necessary equipment. You will need a "swipe" machine and receipt printer for card transactions. Banks sometimes throw in a swipe machine for free. If you buy one separately, expect to pay about $200 or more. A printer will cost you about $200 to $300.
  • Set up a separate account. You need to maintain the payments separately for internal controls, and it's advisable to track the form of payment so you can respond to a patient inquiring about her balance by being able to tell her the credit-card or check number that was used in the transaction, Woodcock says.

    Ousley says you should have separate payment codes or descriptions to easily identify the different payment methods.

    Note: Some credit-card companies offer the ability to set up payment plans for the patient such as FlexPay by MedCard. See Patient Flex Pay at www.upcbiz.com/healthcare.html.

    Provide Financial Counseling

    Having been in the collection business for over 10 years, Ousley recommends that everyone provide financial counseling. Such counseling promotes a positive relationship with the patient and allows the practice to set up ways to preauthorize credit-card payments as well as devising tactics for dealing with credit denials. You can do this by selecting an employee who is goal-driven, willing to go the extra mile and provide quality customer service.

    This person should be:

    someone able to counsel the patients regarding their outstanding bills, credit denials, etc.

    someone who can review financial hardship information and persuade the patient to commit to signing promissory notes, setting up a monthly budget plan and making payment arrangements involving preauthorized credit-card payments. $ $ $

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