According to Experian Health’s State of Patient Access report, patients want two things when it comes to medical billing and collections: clear insurance information and accurate cost estimates. Yet, when they ask, “How much will this cost me?”, many find themselves without a clear answer. Slower payments are an inevitable result. For providers, sub-par billing hurts revenue and limits investment in patient care. Modernizing patient collections with digital tools helps deliver accurate estimates, tailored payment plans and simpler ways to pay, while giving patients the financial clarity they desire.
This article looks at the key components of patient collections, and how software-led solutions support a more transparent, patient-friendly and sustainable healthcare revenue cycle.
How medical billing and collections impact the revenue cycle
Every revenue cycle manager knows that unreliable billing and collections processes can throw the entire revenue cycle into disarray. A single mistake during patient registration, such as an omission in insurance verification or a typo in an address, can lead to inaccurate cost estimates, claim denials and delayed payments. Outdated collections methods force staff to spend valuable time clarifying and chasing payments, instead of focusing on patient care.
When these billing inefficiencies pile up, the financial strain spreads beyond the revenue cycle, jeopardizing the organization’s ability to make good on its core mission. A reliable medical billing and collection process is essential for both patient satisfaction and organizational resilience.
Breaking down the collection process in medical billing
To meet the needs of both patients and providers, an ideal medical billing and collection process should include the following components:
- Pre-visit insurance verification and cost estimates – At registration, staff verify coverage, confirm patient responsibility and provide an upfront cost estimate to prevent any surprise bills.
- Service and charge capture – Throughout treatment, clinicians document services accurately, and coding staff ensure all medical codes are correct, so bills and claims are error-free.
- Claim submission – With accurate data from the start, billing teams are set up to submit clean claims the first time and maximize the likelihood of reimbursement.
- Patient billing and payment – Once insurance processing is checked off, patients receive clear, itemized bills with links to convenient payment options.
- Follow-up and collections – Rather than pestering patients with phone calls, automated reminders sent via text or email give a less intrusive nudge to encourage timely payments. Healthcare organizations can offer flexible payment plans and, if bills remain unpaid, initiate a structured collections process that balances firm follow-up with compassionate financial counseling.
How to optimize the process for maximum revenue
If billing and collections teams are used to manual systems, making the switch to automated tools may seem daunting. Focusing on a few core principles, like transparency, accuracy and flexibility, will help ensure they prioritize areas that matter most to patients.
Here are a few examples of how digital tools tackle the most common problems that get in the way of better billing and collections:
1. Problem: Patients don’t understand their bills
Fix: Provider accurate estimates and clear, itemized statements
The State of Patient Access report found that 96% of patients want accurate upfront estimates. Yet, 64% did not receive them – and 14% said their estimates were wrong. Tools like Patient Payment Estimates software quickly pull together all the essential data to generate a more precise breakdown of who owes what. Patient Financial Advisor sends patients a pre-service text message with a secure link to their estimated patient responsibility, based on real-time rates, pricing and benefit information. Patients get instant confirmation of what they’ll owe and the option to make a secure payment then and there.
2. Problem: Payments are delayed
Fix: Offer online and mobile-friendly options
With 60% of patients saying they want more online options to pay bills, providers that continue to rely on checks and phone calls are missing a major opportunity. Digital billing and payment methods remove friction and make it easier for patients to keep track of their bills and remember to pay. An integrated payment processing system like PaymentSafe® enables providers to collect payments 24/7 from an increased number of collection points. The tool automatically pre-populates fields in patients’ accounts, allowing them to pay multiple bills simultaneously.
3. Problem: High administrative burden is taking a toll on staff
Fix: Use technology to prioritize high-value accounts and automate follow-ups and reminders
Automation can be a lifesaver for providers struggling with manual follow-up workflows, especially as increasing patient volumes outpace staffing levels. For providers, tools like Collections Optimization Manager help revenue cycle management staff collect more patient balances based on patient segmentation. This solution categorizes patients into different tiers according to their ability and likelihood to pay, using data analysis and predictive modeling. Collections Optimization Manager helps staff prioritize high-value patient accounts, so they don’t pursue uncollectable accounts and collect more with fewer resources.
On a recent webinar with Experian Health, Kristen Shoup, Revenue Cycle Director at Wooster Community Hospital, shared how Collections Optimization Manager and automated patient text reminders reduced the administrative burden on staff while offering a more convenient way for patients to pay their balances. Read more about how automated collections strategies helped Wooster achieve a $3.8 million increase in patient payments.
4. Problem: Unpaid balances are piling up
Fix: Implement flexible payment plans
Patients who are worried about being able to afford their medical bills are more likely to seek out providers that offer flexible payment plans. Personalized plans allow patients to explore tailored payment options and break bills into manageable amounts. For example, Patient Financial Clearance screens patients for Medicaid or other assistance programs, and directs them to the most suitable payment plan. This reduces the risk of unpaid bills and means fewer accounts are written off to bad debt.
See how UCHealth used automated financial clearance to identify $26 million in charity care.
Strengthening the revenue cycle through better billing and collection practices
Providers that listen to what patients say they need to help them stay on track with their financial responsibility will not only improve patient satisfaction, but also gain a competitive edge. Making the medical billing and collection process more compassionate and efficient drives higher collections, reduces bad debt and builds a revenue cycle that is both patient-centered and financially strong.
Find out more about how Experian Health helps healthcare organizations improve patient billing and collections.
