BLOG: Third-party financing programs can help patients address cost concerns
Health care professionals in nearly every field, including dentistry, ophthalmology, cosmetic surgery, podiatry, ambulatory surgery centers, bariatrics and even veterinary medicine, have seen the use of third-party patient financing programs become popular to pay for out-of-pocket costs and treatment not covered by insurance. When out-of-pocket costs for health care are high, patients may delay or decline the care they need. It can be a financial strain for many patients to write an unexpected check from their monthly budget in today’s economic environment.
To help patients address cost concerns, health care practices should have a comprehensive financial policy in place that includes payment alternatives available through a third-party financing provider. Adding a third-party financing program allows a health care practice to address cost concerns without stepping into the role of a bank or financing company by billing patients in-house. Patients may even prefer using this payment option instead of consumer credit cards because of available special financing options.
With third-party financing programs, a health care practice does not assume the risk and expense of billing and collections. Once a practice enrolls, patients apply for credit directly with the financing company. After the patient is approved, which is subject to credit approval and requires minimum monthly payments, the provider is charged a processing fee as he or she would with any credit card when patients charge transactions. The fees vary based by the type of financing used or company the practice uses.
For patients, having a monthly payment option can be a motivation to schedule a procedure or move forward with care. For health care providers and practices, one of the biggest benefits is that once approved, the financial arrangement is between the patient and financing company. The practice receives payment via an electronic transfer in as few as 2 business days, which is subject to representations and warranties in agreement with participating providers. This improves the practice’s cash flow and reduces accounts receivable.
Once a practice adds a patient financing program to its financial policy, it is best to review it with the team so everyone understands the terms and options. It is also helpful if team members practice scripts and role-play to be comfortable in explaining payment obligations and options to patients.
Disclosure: Morris reports he is a paid employee of CareCredit.