I work for a hospital system in Illinois, and we are establishing payment plan structures. Currently, we have no criteria. I’d like to set a minimum payment for the plans. I also want to know if the best practice for payment plans is to offer certain months by balance (i.e., $500 or less balance equals six months maximum). If so, what are those tiers?
Answer 1: I recommend finding another system from the state to provide its policy. There are many factors to consider when setting up the criteria:
- How long does your organization want accounts open on their account receivables?
- What is the minimum balance you will set up payment arrangements on?
- Does your organization use an outsourcing vendor for their patient balances and, if so, at what point in the process?
- What does your organization’s financial policy state in terms of payments?
- Do you and/or will you be using any type of bank loan services?
- Is your organization setting these up pre-service and/or post service?
- Is there a deposit required?
Once these questions, and I’m sure there are more that will be added, are answered, it should help set the terms of your payment plans.
This question was answered by: Suzanne Lestina, FHFMA, CPC, director of administrative simplification policy, American Hospital Association, and a member of HFMA’s First Illinois Chapter.
Answer 2: In my personal opinion, minimum payment plans without taking into consideration patients’ ability and propensity to pay are no-win situations for both patients and providers. Forcing patients into payment plan amounts that they simply cannot meet will only result in broken promise plans and increased bad debt. Customizing payment plans, and offering loan options, is more patient friendly, and will result in greater cash payments.
This question was answered by: Christine Fontaine, CHFP, CPAM, senior director, revenue cycle optimization, Connance, and a member of HFMA’s Maryland Chapter.
Answer 3: Several hospitals where I have worked have outsourced all of their self-pay payment efforts. Some of these self-pay companies will provide assistance in developing self-pay policies if requested and will conduct themselves in accordance with providers’ desired approaches for payment, including providing financial counseling to patients who cannot pay their account balances in full.
This question was answered by: Robert J. Ellertsen, FHFMA, a former hospital CFO with more than 35-years of experience in healthcare finance, and a member of HFMA’s Massachusetts-Rhode Island Chapter.
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