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Putting your expectations in writing helps encourage patients to pay at the time of service.

Fam Pract Manag. 2004;11(4):17-20

How many times have patients come to your office, received quality medical care, including an armload of free medication samples, and left without paying a dime? Probably more times than you’d like to recall. Getting patients to pay at the time of service is vital in an industry where the cost of doing business practically doubles each year, but putting a price on caring makes almost everyone uncomfortable. Our primary job is to take care of people’s medical and emotional needs and somehow we have to work in asking for payment for those services without appearing unsympathetic. How do you handle this delicate situation without offending patients or giving away the farm? Start by developing a written payment policy.

Payment policy essentials

A payment policy lets your patients know what you expect of them and what they can expect of you. A well-crafted policy will prevent patients from being surprised about their financial obligation when they receive your services. It will also give your practice some legal protection should a patient fail to pay what you are entitled to collect.

A payment policy similar to the one we use in our practice appears on page 18. You should tailor your policy to your practice, making sure to address the following elements:

  • When payment is due (e.g., usually the date of service, unless other arrangements have been made in advance);

  • Who is responsible for payment (e.g., self-pay patients are responsible for the entire amount of the bill; patients in health plans are responsible for any amounts not covered by their insurance);

  • How co-pays and deductibles will be handled (e.g., co-pays are collected at each visit without exception);

  • What forms of payment your practice accepts (e.g., personal checks, debit cards, credit cards);

  • Your practice’s policy regarding nonpayment (e.g., you enlist a collection agency’s help after three months of nonpayment).

If your practice charges patients for missing appointments, don’t forget to include that information in your payment policy. (Putting it on your appointment cards isn’t a bad idea either.) In my opinion, patients should only be charged for missed appointments if they know about the potential for it in advance.

You can also use your payment policy (or a separate policy) to explain discounts for self-pay patients, if you offer any. Our practice offers a discount equal to what Medicare allows if self-pay patients pay at the time of service. If they don’t pay then, they don’t receive the discount. In our opinion, $42.50 in the bank is worth much more than $50 sitting in accounts receivable for 90 days. You’d be amazed at how grateful patients are for the discount and how much it can help your practice’s cash flow.

Once you’ve written your payment policy, have each patient read, sign and date it. Then add it to the patient’s chart. If a patient says, “I didn’t know I had to pay my co-pay, or deductible” or whatever, simply refer to his or her chart. There is something about patients seeing their own signature on a document that seems to make them more willing to comply.

Why patients don’t pay

Some patients are hesitant to pay anything up-front simply because they don’t understand how their insurance works or what services are covered. You may have had patients ask: “Why does the doctor need my $10 or $20 co-payment in addition to what he’s already getting from the insurance company?” These patients usually aren’t trying to be difficult or game the system, they simply need to be educated about co-payments, deductibles and covered and noncovered services.

Most insurance companies now have automated fax systems that can supply you with this information, usually within minutes. With one phone call, the system will fax to your office a description of your patient’s benefits including deductibles, co-payments, covered services and out-of-pocket limits. This extremely valuable service can make things much easier when approaching your patient about his or her financial responsibility. Our office keeps these fax sheets in the patient chart so they can readily be referred to when a question about coverage or responsibility arises.

If you practice long enough, you will unfortunately encounter a few people who have no intention of paying you. These people will try to dominate, manipulate and dump guilt on anyone they think they can intimidate. They have one goal in mind: to get away with as much as they can. What they can get away with depends on how you handle the situation. The key in dealing with patients who don’t want to pay is to stand your ground. Be calm, be polite and keep referring to the payment policy. It will inform your nonpaying patients what they can expect if they refuse to pay.

Of course some patients have genuine difficulty when it comes to making ends meet. An astute physician or practice administrator can ascertain when this is truly the case. People lose jobs, get divorced or face catastrophic illness. These people need our help and they will be truly grateful when you are able to give them a break.


The payment policy below is similar to one used in the practice where the author works and can be used as a guideline to help you develop your own (click below to download the policy). Patients are asked to read and sign a copy of the policy, which is then attached to their chart for later reference.

Payment Policy

Thank you for choosing us as your primary care provider. We are committed to providing you with quality and affordable health care. Because some of our patients have had questions regarding patient and insurance responsibility for services rendered, we have been advised to develop this payment policy. Please read it, ask us any questions you may have, and sign in the space provided. A copy will be provided to you upon request.

  1. Insurance. We participate in most insurance plans, including Medicare. If you are not insured by a plan we do business with, payment in full is expected at each visit. If you are insured by a plan we do business with but don’t have an up-to-date insurance card, payment in full for each visit is required until we can verify your coverage. Knowing your insurance benefits is your responsibility. Please contact your insurance company with any questions you may have regarding your coverage.

  2. Co-payments and deductibles. All co-payments and deductibles must be paid at the time of service. This arrangement is part of your contract with your insurance company. Failure on our part to collect co-payments and deductibles from patients can be considered fraud. Please help us in upholding the law by paying your co-payment at each visit.

  3. Non-covered services. Please be aware that some – and perhaps all – of the services you receive may be noncovered or not considered reasonable or necessary by Medicare or other insurers. You must pay for these services in full at the time of visit.

  4. Proof of insurance. All patients must complete our patient information form before seeing the doctor. We must obtain a copy of your driver’s license and current valid insurance to provide proof of insurance. If you fail to provide us with the correct insurance information in a timely manner, you may be responsible for the balance of a claim.

  5. Claims submission. We will submit your claims and assist you in any way we reasonably can to help get your claims paid. Your insurance company may need you to supply certain information directly. It is your responsibility to comply with their request. Please be aware that the balance of your claim is your responsibility whether or not your insurance company pays your claim. Your insurance benefit is a contract between you and your insurance company; we are not party to that contract.

  6. Coverage changes. If your insurance changes, please notify us before your next visit so we can make the appropriate changes to help you receive your maximum benefits. I f your insurance company does not pay your claim in 45 days, the balance will automatically be billed to you.

  7. Nonpayment. If your account is over 90 days past due, you will receive a letter stating that you have 20 days to pay your account in full. Partial payments will not be accepted unless otherwise negotiated. Please be aware that if a balance remains unpaid, we may refer your account to a collection agency and you and your immediate family members may be discharged from this practice. If this is to occur, you will be notified by regular and certified mail that you have 30 days to find alternative medical care. During that 30-day period, our physician will only be able to treat you on an emergency basis.

  8. Missed appointments. Our policy is to charge for missed appointments not canceled within a reasonable amount of time. These charges will be your responsibility and billed directly to you. Please help us to serve you better by keeping your regularly scheduled appointment.

Our practice is committed to providing the best treatment to our patients. Our prices are representative of the usual and customary charges for our area.

Thank you for understanding our payment policy. Please let us know if you have any questions or concerns.

I have read and understand the payment policy and agree to abide by its guidelines:

____________________________________________ ______________________

Signature of patient or responsible party/Date

The physician’s role

When discussing payment policies, there is one rule I feel is crucial, albeit difficult to follow: As much as possible, physicians should try to distance themselves from the actual collection process. A well-meaning physician who tells a patient he or she can wait and pay what’s owed next time undermines the staff person’s authority and credibility and also sets up a silent payment arrangement: “If I complain loudly enough, the doctor will let me get my way.”

Of course, there will be special circumstances when a staff member may want to confer with a physician (e.g., when a patient has confided he or she has just lost a job or is experiencing some other financial hardship); however, this should not be done in front of the patient. Once the payment policy is in place, it should be effective enough to handle most situations without having to take the physician away from practicing medicine.

Every dollar counts

Unfortunately, keeping medical practices up and viable gets tougher every day. We struggle to survive in an industry where outside sources tell us how much we’ll get paid, when we’ll get paid or even whether we’ll get paid at all. This makes it more important than ever not to let the money you’re entitled to slip through your fingers. That money may be the difference between keeping your practice doors open or having to close them.

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