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It is a common phenomenon in the healthcare industry for medical practices to struggle with collecting their patient obligations. Its not that you as the doctor didn't provide quality healthcare or the patient was dissatisfied with your service. Unfortunately medical bills get put on the back burner because generally speaking, the mortgage payment, car payment and other various bills have top priority by a lot of consumers. Having a patient payment plan in place can make the patient obligation more affordable, which means they are more likely to pay.

Is offering a patient payment plan a smart business move from a medical practices point of view? According to Dallas L Alford IV, CPA and President of Atlantic Financial Consulting, a medical billing firm in Wilmington, North Carolina, there are benefits to offering a payment plan.

The first benefit is that you will establish loyalty with your existing patients. An example of this may be a geriatric practice whose patient base consists of older patients that are more than likely on a fixed income. These patients have every intention of paying but may not be able to afford their bill. If you offer them a favorable payment plan, you can guarantee they will pay their balance and will be back to see you again since they need your services. They will more than likely tell their friends and family about your practice, which will in turn further increase your patient base and revenue.

The next benefit is you will increase your patient base and revenue since you will continue to see patients that are enrolled in your payment plan. A lot of practices have a policy in place that they refuse to see patients that have an outstanding balance. While this type of policy is understandable and you may end up collecting 100% of your patient obligation with such a policy, you may also limit the number of repeat patients that visit your practice. Let's compare the numbers of a practice that has this type of policy versus a practice that has a payment plan in place. The practice without the payment plan may be collecting 100% of $125,000 while the practice with the payment plan is only collecting 98% of $200,000. The first practice may be collecting 100% of their patient balances but has fewer patients while the second practice is only collecting 98% of its patient balances but has more patients due to the availability of a payment plan. You have to ask yourself what is better for your practice, collecting 100% of $100,000 or 98% of $200,000?

The key to a successful payment plan is to minimize your practice's risk and headache associated with administering the plan. To improve cash flow for your practice, ask the patient to pay as much as possible up front and collect the remaining amount via an automatic payment plan that drafts the patient’s checking account for a predetermined monthly amount. This type of service can be done in-house or handled by a third party billing service.

The bottom line is patients are becoming more responsible for healthcare costs due to such insurance plans as health savings accounts and those practices that can adapt will grow their patient base and increase their revenue.