Don’t sweat the small charges: Effective card on file collections amid COVID-19

The Medical Group Management Association’s most recent MGMA Stat poll asked healthcare leaders, “Does your practice keep patient credit card information on file?” The majority (32%) responded “yes,” while 68% said “no.”

Among practices with credit card on file (CCoF) policies, respondents noted that their practice collects the following upfront:

• Combination (copay, deductible/coinsurance, etc.) (69%)
• Copay (20%)
• Nothing (6%)
• Major procedure estimate (3%)
• Deductible/coinsurance (1%).

The poll was conducted Sept. 29, 2020, with 987 applicable responses.

A broader view of the industry in the 2020 MGMA DataDive Practice Operations data set (based on 2019 data) finds even more provider organizations embracing this method of payment: 77.9% of practices reported using CCoF, compared to 22.1% that do not. 

Both inpatient and outpatient facilities still face the issue of patients not returning for visits. As noted by a U.S. Census Bureau Household Pulse Survey in July, more than 90 million American adults said they had delayed medical care in the preceding four weeks because of the pandemic. Effective payment collection will be essential to ensure revenues continue to recover as volumes continue to rise.

Embracing new payment methods can do just that while also being patient-centric. During a recent MGMA webinar, Karen Zupko, president, KarenZupko & Associates, said that patients aren’t just searching for new, contactless ways of interacting with medical practices during the pandemic — they want it to be seamless. 

In addition to online payments via the provider’s website or patient portal, Zupko said that CCoF is another way to meet patients’ financial needs. In one CCoF example, a patient provides card information and authorizes charges of up to $200 for copays, deductibles, non-covered services paid out of pocket, or for portions of bills not covered after insurance has paid. Practices would then contact the patient for approval of charges beyond $200.

A 2017 MGMA survey suggests that CCoF for balances less than $200 can be beneficial in reducing patient debts/write-offs, days in patient A/R and cost of collections.

Mona Reimers, director, administrative operations, Ortho NorthEast, Fort Wayne, Ind., uses CCoF in her practice and said that “healthcare has to get on the bandwagon” of modernized payment processes, including CCoF.

“We started a policy that, if a patient wanted to go on monthly payments, they had to leave a credit card on file, because it was too easy for our patients to miss a month,” Reimers said. “We had concerns about what patients would think, but in a year, 500 people called to make payment plans and followed through.”

Zupko noted there’s a big benefit to speeding up collections, observing how one internal medicine practice can get a visit and lab test paid within three days, through a combination of billing insurance daily and then using CCoF to charge any balance remaining if a patient has not met a deductible.

Keys to CCoF success

• Ensure your practice management system has PCI-compliant storage, processing and transmitting of CCoF data. Some systems already have payment processors built in that are PCI compliant.
• Have a signed agreement with terms of the CCoF policy, and let patients know when they can expect to have the card charged when there is a balance. Make these terms easily available somewhere on your website and/or within the patient portal, and consider including them on any forms patients sign to acknowledge they are ultimately responsible for bill payment.
• Consider price estimation tools that can help practice staff provide financial education about cost of care to patients.
• If using a vendor, ensure a HIPAA business associate agreement (BAA) is in place.
  • Sample business associate agreement outline (MGMA advocacy resource 
• Consider providing a receipt of payment to the patient, especially if you have an electronic delivery method (e.g., email), to reduce inquiries made by patients.

MGMA Stat

Would you like to join our polling panel to voice your opinion on important practice management topics? MGMA Stat is a national poll that addresses practice management issues, the impact of new legislation and related topics. Participation is open to all healthcare leaders. Results of other polls and information on how to participate in MGMA Stat are available at: mgma.com/stat.

Additional resources

• MGMA DataDive Practice Operations — This data set represents more than 1,500 organizations for an understanding of how patients and staff interact with your organization.