Patient Payments: How to Improve Your Practice’s Collection Rate

Quick Answer: How Can Practices Improve Patient Collections?

The best ways for medical practices to improve their patient collection rate include:

1. Verify insurance and benefits upfront
2. Collect co-pays and deductibles at the time of service
3. Provide clear and easy-to-understand statements
4. Offer multiple payment options (online, mobile, credit card)
5. Use payment plans for high balances
6. Train staff on financial conversations
7. Leverage reminders and digital tools

For many providers, outsourcing medical billing services for small practices helps streamline these steps, reduce unpaid balances, and improve cash flow.

Introduction: Why Patient Collections Are Challenging

Healthcare costs are increasingly shifting to patients, with rising deductibles and co-insurance responsibilities. For small practices, this means patient collections are now a major driver of revenue.

According to the Medical Group Management Association (MGMA), patient responsibility accounts for over 30% of practice revenue in some specialties, but practices often collect only a portion of it (MGMA).

Without a strong strategy, balances pile up, staff waste hours chasing payments, and cash flow suffers.

Step 1: Verify Insurance and Benefits Upfront

Collections start before the appointment. If eligibility and benefits aren’t confirmed, practices risk billing patients incorrectly.

✅ Confirm active insurance coverage

✅ Check deductibles, co-pays, and co-insurance

✅ Identify services requiring prior authorization

Pro Tip: Medical billing services for small practices include real-time eligibility verification, saving staff time and preventing mistakes.

Step 2: Collect at the Time of Service

One of the biggest missed opportunities in collections is not collecting at the front desk.

• Train staff to collect co-pays and known deductibles at check-in.
• Provide payment estimates when possible.
• Use card-on-file agreements for future balances.

Why it matters: According to Becker’s Hospital Review, the chance of collecting from patients drops significantly after they leave the office, with only 21% of balances paid after 90 days (Becker’s).

Step 3: Provide Clear and Patient-Friendly Statements

Confusing bills are one of the top reasons patients delay or avoid paying.

✅ Use plain language, not jargon

✅ Highlight total due, due date, and payment options

✅ Avoid cluttered, multi-page statements

Best Practice: Combine paper and electronic statements to reach all demographics.

Step 4: Offer Multiple Payment Options

Today’s patients expect convenience. Offering only checks or in-office payments limits collections.

• Online portals
• Mobile payments
• Credit/debit cards
• Automated recurring payments

Step 5: Use Payment Plans for Large Balances

High out-of-pocket costs can overwhelm patients. Offering flexible payment plans makes it easier for them to pay over time.

✅ Automated recurring payments

✅ Transparent terms (length, monthly amounts)

✅ Soft collections language, not aggressive tactics

Step 6: Train Staff on Financial Conversations

Front desk and billing staff should be comfortable discussing balances.

• Provide scripts for explaining co-pays, deductibles, and statements.
• Train staff to handle sensitive conversations with empathy.
• Make financial discussions a normal part of care, not an afterthought.

Step 7: Leverage Digital Tools and Reminders

Automated reminders reduce the workload of chasing payments.

• SMS or email payment reminders
• Patient portal alerts
• Automated late-payment notices

Why it matters: Digital-first practices collect faster and reduce manual follow-up time.

Why Outsourcing Improves Patient Collections

Small practices often lack the staff or systems to manage collections effectively. Outsourcing medical billing services for small practices helps:

• Automating eligibility checks and estimates
• Providing clear, professional statements
• Offering patient portals and digital payment tools
• Following up on unpaid balances
• Reducing staff workload while improving cash flow

Quick Recap: Keys to Improving Patient Collections

1. Verify benefits before visits
2. Collect at check-in whenever possible
3. Provide clear statements
4. Offer online, mobile, and card payments
5. Use payment plans for large balances
6. Train staff for financial conversations
7. Automate reminders and follow-ups

Conclusion

Improving patient collections is critical for small practices facing rising patient responsibility. By implementing clear communication, offering flexible payment options, and embracing digital tools, practices can significantly raise their collection rates.

For many providers, partnering with a medical billing company ensures these steps are handled consistently and efficiently, allowing staff to focus on patient care while protecting the financial health of the practice.

Supportive References

1. MGMA – Tips for Improving Patient Collections
2. Becker’s Hospital Review – Patient Balances After 90 Days

FAQs

1. What is a patient collection rate?

It’s the percentage of patient-responsible balances (co-pays, deductibles, co-insurance) successfully collected.

2. Why do small practices struggle with patient collections?

Limited staff, outdated payment systems, and a lack of upfront verification often cause delays in collecting balances.

3. How can practices increase collection rates immediately?

Start by collecting co-pays and deductibles at the time of service and offering online payment options.

4. Do payment plans really help?

Yes — flexible payment plans increase the likelihood that patients will pay large balances over time.

5. Can outsourcing improve patient collections?

Yes. outsourcing medical billing services provide technology, expertise, and follow-up systems that improve collection rates while reducing staff burden.

Related Resources

• Medical Billing Services for Small Practices
• Denial Management Solutions
• Credentialing Services
• A/R Recovery Services
• Essential KPIs for Your Practice
• Step-by-Step Guide to the Billing Process

About the Author

Hasnain Ali is the Founder & CEO of Global Tech Billing LLC, a U.S.-registered medical billing and revenue cycle management company serving 50+ specialties. He helps independent providers and private practices reduce denials, improve collections, and streamline the revenue cycle.

Connect with Hasnain on LinkedIn