It’s not uncommon for patients to be financially stressed to the point where they cannot feasibly pay their medical bills at the time of service. This means that the payment ends up getting delayed. Sometimes it can be delayed so much that it turns into an outright case of non-payment. The patient might even stop receiving necessary care.

This pattern of delayed payments can even end the long-term relationship between the patient and the provider. Thus, leaving the patient without the treatment they need to live a healthy and productive life.

Preventing this cycle requires medical healthcare providers and insurance providers to work together while maintaining a clear understanding of how much a patient owes out of pocket, as well as what are the most viable means to collect the patient’s balance. All without damaging the long-term relationship between the patient and the provider.

There are several possible ways to do this via some innovative strategies which can help the health care institutions to receive payment from the patients without applying undue pressure and stress.

Offer Payment Plans & Partner with Financial Institutions

Identifying a patient’s ability to pay starts with the use of special analytics tools. You might be able to capture $100 as a form of deposit then the remainder of their balance is allocated to a managed payment plan. There are even some financial institutions that offer easy-to-qualify credit programs for patients who might not be able to pay the full balance at the time of service.

This type of strategy ultimately benefits both the patients and providers. It can also increase your revenue without having to charge the patient the full amount upfront.

Track & Manage the Collection Rate in Your Revenue Cycle

One of the most critical factors in any thriving medical or mental health practice is precision revenue cycle management. Though this goes beyond simply keeping your eye on your income. It is also a primary indicator of your clean claims ratio

It’s effectively a representation of the percentage of claims paid directly by the payer. You can use this ratio in a variety of analytics to measure just how well your revenue cycle management strategy is doing. Then you can make any necessary adjustments monthly or quarterly to continually refine and optimize the clan claims ratio.

As a general metric, a clean claims ratio is less than 80% is a key indicator that your organization is experiencing too many rejections and denials to remain financially viable in the long term. Ideally, you want the clean claims ratio to be at 90% or greater throughout every segment of your revenue cycle, regardless of if the chosen duration is measured in months or fiscal quarters.

Interpreting Your Charge Value

Your practice’s charge value is another critical metric for maintaining a healthy revenue stream. It’s calculated by the charges minus any contractual adjustments. You can then use this information to identify revenue lost due to non-contractual adjustments and/or nonpayment.

The amount of reimbursement will be based on an amalgam of the payer mix, specialty, automation, and other factors, including inappropriate write-offs or not having access to all fee schedules.

Interpret Your Net Collection Rate

Your practice’s net collection rate is another critical metric that indicates whether your practice is collecting reimbursements effectively, or if there needs to be a change in protocol. It allows you to identify areas where you can improve and/or limit non-contractual adjustments.

For most practices, the net collection rate calculates both the net collection rate, as well as aged data. This is in addition to calculating the gross collection rate.

Eliminate or Reduce the Use of Paper Billing

A lot of practices still use paper billing. While it might be the traditional method for handling medical billing, there are a lot of great benefits to making the switch to digitizing their billing processes.

By eliminating or reducing the use of paper billing your financial process becomes more effective. It also lets you communicate bills and financial responsibilities to your patients quickly. This gives them more lead time to prepare their financials for faster payment.

You can also use digitized medical billing with reminder features that help patients stay informed about their bills via an e-mail notice or text message. This helps keep their financial obligations to you in the front of their mind much better than a paper bill that might be inserted into a drawer and forgotten about.

Be Proactive About Improving Patient Engagement

Patient engagement plays an important role in managing your practice’s revenue cycle. By creating a strong relationship with patients it increases their chances of making a full reimbursement for services. This starts with training your staff on how to explain their financial responsibility to patients, as well as ways to keep them abreast of payment options.

A lot of patients perceive the billing process as being complicated. Yet the more time you spend helping them understand it, the more likely they are to make timely payments.

This sort of improved communication between your practice’s administrative staff and each of your patients will go a long way toward avoiding confusion. While also improving the entire experience in a way that makes the patient want to take responsibility for their out-of-pocket costs.

This is also a great vehicle for providing each of your patients with established payments and information before their procedures, which will also factor into higher patient satisfaction rates. This also boosts patient retention in the long term.


Outstanding patient debt can be an obstacle to both your revenue stream, as well as your relationships with each of your patients. By being upfront about patient financial responsibilities, offering payment play options, and switching to digital billing, your patients will feel better informed. They will also be more likely to embrace their payment options, rather than avoid them.

In the end, your revenue stream will be more consistent, your patient retention rate will be higher, and your patient-to-provider relationship will be stronger in the long run.