Patient Collections Best Practices

by Applied Medical Systems

Patient collections refer to the process of collecting payments from patients for a healthcare service they received. In the complex landscape of healthcare, patient collections stand as a crucial aspect for providers to navigate. Efficient and effective patient collections not only ensure the financial health of healthcare facilities but also contribute to fostering positive patient experiences. However, the process of collecting payments from patients can often be intricate, requiring a delicate balance between compassion and firmness. 

Patient Collections

Here at Applied Medical Systems, we know how important both patient and insurance collections are to the health of a practice’s revenue cycle. The truth of the matter is, that while insurance collections have many rules and guidelines, protocols, and contract obligations, patient collections require more finesse and empathy. Here, we delve into some best practices for patient collections that can streamline operations while maintaining patient satisfaction.

Oftentimes we see practices, unsure of how to dialogue with their patients regarding balances owed, delay, or even inhibit the patient collections process. This can have the paradoxical effect of making patients more upset when that bill finally does come, and can even lead to higher patient payments due. For example, if a patient needs to update their primary insurance on file but isn’t notified in a timely enough fashion, by the time the information is updated, the timely filing window may have already closed.

AMS Practice Coaches Sunni Nelson and Natalie Glancy discuss how to create an empathetic, efficient, and practical patient collections protocol in Episode 20 of the Pulse Practice Management podcast ( And to illustrate even further, here are Applied Medical Systems’ tried and true standard protocols for patient collections.

  1. Transfer all eligibility denials to the patient immediately and send a written notice requesting they update their insurance with the office as soon as possible to ensure the best chance of insurance collection. Try reaching Medicare-aged beneficiaries and/or balances over $300 by phone as well, as a courtesy, but do not hold statements. Written notices are the most effective way to reach patients.
  2. Create a practice protocol for out-of-network balances. If a practice chooses not to participate with an insurance plan and the patient has been made aware, it is perfectly acceptable to collect that balance in full. However, if there has been a credentialing glitch causing a cluster of surprise denials, some practices will choose to write those off as a courtesy. Pick the scenario that best fits your practice.
  3. Consider collecting known balances at the time of service to save on collection costs and prevent sticker shock when the patient receives the statement at a later time.
  4. After three statements have been sent with no response, AMS recommends transferring the balance to a collection agency. Research has shown that by the time a fourth statement is sent, patients are unlikely to pay the statement.
  5. Customize your statement settings to help them understand their balance and direct them to the proper action. Examples include:
    1. “If your prescription has been filled but not dispensed, you may disregard that balance until you pick up your prescription.”
    2. “Please review your insurance company’s Explanation of Benefits for more detail about why this balance is patient responsibility. If you still have questions, don’t hesitate to call us! We are more than happy to help”
    3. “If you believe your insurance company denied in error, please reach out to them immediately. If you still have questions, don’t hesitate to call us!”

Work With Applied Medical Systems

We’re here to answer your questions about the importance of patient collections! Do you want to evaluate or improve your medical billing processes but are still figuring out where to start? Our team at Applied Medical Systems is here to help. Check out our website or give us a call at (919) 289-8415 for more information.