Upfront Collections - A Critical Success Factor in Physical Therapy Practices

It is no secret that the vitality of cash flow is dependent on the critical success factor of upfront collections. Upfront payments on patient co-pay and money towards the deductible is the patient's responsibility and obligation to the clinic, and is an expectation set by the patient's insurance carrier. However, a large volume of billing balances directly owed by patients has grown at an alarming pace. The driving force in the rise of patient pay responsibility is the increase of insurance plans with high deductibles and high levels of co-insurance. Due to this, it is best to take a proactive stance of upfront collections at time of service versus pursuing patients for large balances in past due accounts several months later. Collection of money at the time of service is a critical indicator of good practice management and benefits both the patient, as well as the provider. It not only helps the patient manage a smaller, more affordable bill after graduation, but also assures the provider will obtain timely reimbursement.

It is important to remember that an insurance plan co-pay is a required amount that the patient must pay themselves. The insurance payer sets a benefit cost for the patient, with the co-pay amount influencing the premium cost most of the time. The higher the co-pay, the lesser the premium cost from the patient's employer. Therefore, the insurance carrier requires the patient to contribute to the final payment of their healthcare in the form of a co-pay.

Patients are well informed of their co-pay or co-insurance responsibility from their employers; the verification of their benefits should be confirmed by the Front Desk Coordinator (FDC). It is vital that the FDC establishes collection arrangement with the patient on the first visit to the clinic. Explaining their Physical and Occupational benefits, as well as outlining the amount that will be expected at each visit, is very important in the success of upfront collections. Patients are craving more and better communication about their financial responsibility. FDCs should take the time to clarify the expectations proactively therefore reducing confusion through the billing and collection processes.

Another best practice is to put the expectations of the financial plan in writing, which can be accomplished nicely with a "Welcome Letter" on the patient's first visit. Also, when scheduling for repeat visits, remind patients of their co-pay expectations.

Stay consistent and compliant with the collection of up-front money to ensure prompt payment and to create good-standing with the patient. Patients will be pleased to know you are actively helping them stay out of larger medical debts by collecting upfront on services rendered. Upfront collections are here to stay, and showing the value of physical or occupational therapy is important when asking patients to pay. The role of the front desk team for this task is key to the practice success.