Healthcare providers of all sizes, especially small hospitals and physician-owned practices, struggle with unpaid post-insurance balances. When collections lag, these balances often turn into bad debt. Providers classify a bill as bad debt after making reasonable efforts to collect and determining that the patient is unlikely to pay. With data showing collection rates dipping as low as 17% after insurance in some cases, providers must begin financial conversations with patients early.1 Ideally, this starts before insurance is processed to reduce the risk of bad debt.
Despite outdated perceptions, payment plans aren’t a slow path to revenue — they’re a proven one. Providers recover more when plans are well-structured. That’s why in this second installment of our Patient Pay Revenue Rescue series, we’re outlining practical ways to prevent bad debt and boost goodwill, starting with smarter, more flexible payment plans.
Engage Early to Prevent Bad Debt
Engaging patients in financial conversations before insurance is processed sets the stage for success. It reduces billing confusion, keeps patients informed, and helps your team stay ahead of potential write-offs. When paired with flexible payment options, this early engagement strengthens both patient satisfaction and practice cash flow.
Smart Payment Plans: What Works
- Start Early
Offer payment plans as soon as a balance is identified. - Keep It Manageable
Structure plans around realistic monthly installments and timelines that align with the patient’s financial capacity. A manageable plan increases the likelihood of successful payments. - Use Patient-Friendly Tools
Tools, like PatientFocus’s solutions, that reduce friction and ensure follow-up is simple and consistent include intuitive payment portals, click-to-pay text reminders, and bilingual call center support. - Automate, But Keep It Personal
Automated reminders and voicemail messages help maintain engagement without burdening staff. Personalization keeps the experience compassionate and patient-centered. - Lead with Compassion
Proactively offer discounts for on-time payments and evaluate patients for charity care eligibility. These steps reduce write-offs and demonstrate a commitment to patient well-being.
Rescue Revenue Before It’s Lost
Bad debt isn’t a given. With earlier engagement, structured flexibility, and digital-first tools, practices can recover more and preserve patient relationships. Best of all, avoiding write-offs is far more efficient than chasing payments down the road.
In part three of our Patient Pay Revenue Rescue series, we’ll take a KPI deep dive, outlining how to evaluate the success of patient pay efforts using metrics like self-pay collection rate, average days to collect, and patient satisfaction scores.
Ready to put a proactive, patient-friendly payment strategy in place? Schedule a consultation with PatientFocus and see how easy it is to turn potential write-offs into recovered revenue.
Sources
- “Hospital Collection Rates for Self-Pay Patient Accounts.” Crowe.Com, www.crowe.com/-/media/crowe/llp/widen-media-files-folder/h/hospital-collection-rates-for-self-pay-patient-accounts-report-chc2305-001a.pdf.