Published: Jan 09, 2024
Revenue Cycle Management

Upfront Collections: How to Get Physicians & Staff Onboard with Collecting Pre-Service

Suzanne Delzio
Suzanne Delzio
8 minute read
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When one Florida, three-hospital healthcare organization discovered its low upfront collections were sapping revenue, it determined to tackle the issue head-on. 

The organization was frustrated with how late in the patient journey their bills were going out, but staff had fallen into a pattern of billing long after service was delivered. Without the budget for new hires, exploring bottlenecks and delays felt impossible. 

Once the system brought on a third-party solution to help them with front-end issues like patient data accuracy and upfront collections, net revenue surged. Upfront collections increased over 45 percent. In addition, days in A/R dropped by 18 percent. This second gain occurs reliably in upfront collections case studies as every dollar captured upfront is a dollar that stays out of A/R. 

Retraining clinicians and staff that upfront collections were a new normal they would have to convey to patients was a challenging but ultimately rewarding step in improving upfront collections. When for so long, providers simply billed after care, both staff and patients needed the language and workflow to make the shift. Patients were suspicious. Staff didn’t want conflict at the busy front desk and, as carers, felt uncomfortable bringing up money at all. Still, it took a clear-eyed adoption of insisting on upfront collections to win the revenue needed to provide competent care and keep serving their patient population. 

Upfront collections now a necessity

This Florida organization reflects a nationwide trend of increasing patient debt stemming from higher deductibles and coinsurance, as well as an increase in the number of self-pay patients. 

Patients’ outstanding accounts are surging, a concerning issue in healthcare finance. Accounting, consulting, and technology firm Crowe LLP’s study, “Hospital collection rates for self-pay patient accounts” sheds light on this recent surge in days in provider A/R. After surveying daily transactions from more than 1,600 hospitals and 100,000+ physicians nationally from 2018 to 2021, they found: 

• the number of patients who owe more than $7,500 more than tripled from 5.2 percent of all accounts in 2018 to 17.7 percent in 2021

• patient balances higher than $14,000 almost quadrupled from 4.4 percent of all accounts in 2018 to 16.8 percent in 2021

And higher balances were particularly difficult to collect. Crowe LLP finds: 

• the collection rate for claims between $5,000 and $7,501 was 32 percent

• the collection rate for claims between $7,501 and $10,000 was 17 percent

While this study focuses on hospitals and self-pay patients, physician groups and other healthcare systems report similar disruption in revenue due to increased patient financial responsibility. An MGMA Stat poll asked medical practices how their collections — as measured in days in A/R — have changed recently. The majority (56 percent) said days in A/R have increased. 

Patient debt is a serious threat to provider revenue. The farther down balances move from 30- to 45- to 90-day buckets, the less likely they are to be collected. By the time a bill goes to more than 120 days in accounts receivable, the average collection rate on it is just 10 cents per dollar. According to a survey conducted by the Healthcare Financial Management Association (HFMA), 70 percent of providers are concerned about collecting patient payments, and 95 percent believe that it is more challenging than ever.

Take a quick tour of how you can simplify upfront collections when you automate eligibility verification and estimate generation here:

Patients now fuel 30 percent of provider income

In the days when patients were responsible for just 10 percent of provider revenue, many providers didn’t feel sufficient pain to request payment upfront. It just didn’t impact revenue significantly enough. 

In today’s healthcare environment, however, due to the increase in high deductible healthcare plans and the number of self-pay patients, patients are now responsible for more than 30 percent of provider income — enough to make or break a practice, group, or healthcare system. The resulting climbing accounts receivable and bad debt leave healthcare organizations struggling to capture adequate revenue. 

 In this article, we'll delve into the world of upfront collections, exploring the reasons behind this discomfort, the latest trends and developments, and expert advice to help healthcare professionals get comfortable with collecting their fees to keep the organization viable.

What are upfront collections at healthcare organizations? 

Upfront collections in healthcare is the process of collecting payments from patients for services at the time of their visit or even before the service is rendered. Patients pay their portion according to the fees and terms stipulated by their insurance contracts. Upfront collections involve a combination of technology and patient engagement strategies. For instance, using automated price estimators helps in providing accurate pre-service payments, which is crucial for setting clear expectations with patients. Additionally, training staff on effective communication techniques for collecting co-payments and other charges at the point of service is vital. The aim is to ensure that collections are maximized at or before the point of service, as the likelihood of collecting payments decreases once the patient leaves the facility.

Pre-service payments may appear novel, they are becoming increasingly prevalent in the healthcare landscape, driven by a need for improved revenue cycle management and patient financial responsibility. However, physicians and staff often feel uncomfortable with asking for fees before services are rendered. 

Barriers to upfront collections and their remedies

To comprehend the reasons behind physicians’ and staff's discomfort with collecting upfront, we must first look at the challenges and concerns they face when it comes to this important step in optimizing revenue.  

The provider’s tricky role as bill collector 

When it makes perfect sense that collecting upfront is key to better revenue, why healthcare organizations aren’t doing so frustrates physician group and management services organization executives. 

People often bring up that mechanics and accountants don’t shy away from collecting fees for their services upfront. Why don’t doctors? 

Physicians are in a particular bind when it comes to collecting revenue. They’ve chosen a “caring” profession where the relationship between patient and doctor can impact health outcomes – in a way wholly different from how taxes turn out after a few calls with an accountant or how the car runs after a repair. In healthcare, bringing money into the transaction can feel like a betrayal. 

When payers handled the majority of the payments, providers could exist as the patient’s ally. Financial issues could be pinned on the payers, and providers could direct any patient animosity in that direction. Further, providers know well that patients are struggling to pay their healthcare bills. A report from Revenue Cycle Intelligence reveals that 60% of patients with high-deductible health plans struggle to pay their medical bills, and 15 percent of American adults have past-due medical debt owed to hospitals. They also know well that 66.5 percent of American bankruptcies are tied to medical bills.   

The remedy

First and foremost, the majority of patients want and even seek pre-service estimates.  A study by InstaMed reveals that 80% of patients want to know their payment responsibility before receiving care. As they pay greater portions of their medical bills, they seek clear information about their financial obligations beforehand to better prepare and plan. Healthcare providers get more comfortable with tackling upfront collections head-on when they understand it doesn’t have to be an act of aggression. 

When the process of providing a patient pay estimate includes a discussion of a payment plan, financial counseling, and healthcare payment governmental and other resources, providers embody the caring professionals they envision themselves as. Providers can also make paying easier for patients by accepting convenient payment forms whether that’s cash, check, credit/debit card, text or email. In the end, they get their patients the care they need AND strengthen their relationships. 

Staff and clinician fear of patient pushback

Physicians and staff identifying as carers is just one issues that stops them from insisting on upfront collections. No one in a busy office wants to handle patient push-back. 

The barrier

Physicians and staff fear that asking for payment before service will result in pushback or resistance from patients. The concern is that patients might perceive this as a money-first approach, and as mentioned above damage the provider-patient relationship. 

The remedy

To address this concern, healthcare must focus on effective – and early – communication. Emphasize that your organization is dedicated to full clarity and transparency. You can even stress that the No Surprises Act of 2022 is mandating that patients know their payment responsibilities upfront. 

Patients are more likely to accept pre-service payment requests when they understand the reasons behind them and believe they are receiving value in return. Transparency about the cost of care and the financial policies of the healthcare facility can go a long way in mitigating this fear. 

Below, we’ve included some language that conveys your concern for the patient while holding firm on the need to collect. 

Lack of pre-service estimates or concern about estimate accuracy

First, to collect payments upfront, providers and patients must create accurate estimates for the medical care proposed. Organizations with no patient estimate solution software in place must manually calculate patient estimates, a burden on front desk staff requiring significant time. After all, the process of estimating patient responsibility is intricate, often influenced by factors like payer contracts, state laws, and the varying policies of individual healthcare practices. 

In addition, the government has mandated that a portion of patients are legally entitled to payment estimates. Beginning on January 1, 2022, the No Surprises Act (NoSA) required healthcare providers and insurers to provide good faith estimates (GFEs) to patients who either pay for their own healthcare or are uninsured. These GFEs inform patients about the anticipated costs for specific medical services or items they request or have scheduled. A comprehensive GFE should cover the main services and items, along with any additional ones that are likely needed, including those from other providers or facilities.

Although the No Surprises Act will only penalize healthcare organizations that fail to give GFEs to self-paying or uninsured patients, many doctors' groups also provide these estimates to insured patients.

With front desk staff juggling many tasks along with face-to-face patient interactions, however, mistakes can occur, preventing the delivery of an accurate estimate. A mistake in an estimate can result in an angry patient who may not recommend and even criticize the provider online. Worse, should the estimate overcharge the patient by $400 or more, both parties could face the lengthy patient-provider dispute resolution process. 

The remedy

Clearly, the first step in improving your upfront collections is getting a reliable patient pay estimate workflow in place. As healthcare consumerism continues to grow, providers are adapting by offering tools and websites to help patients understand and manage their financial responsibilities. These tools include self-service cost estimation tools, payment plans, and clear communication about upfront payment expectations. Only software can deliver a real-time cost estimate to patients using a website, however. If you do not have a trained internal staff, outsourcing and using patient pay estimate software may be your best option. 

Lack of training and experience

The Barrier

The prevailing concern about estimate accuracy stems from a widespread issue in medicine – medical professionals' lack of familiarity and competence in the business of medicine. 

According to the Harvard Business Review, during medical school or residency, most physicians receive little to no training on business management issues like patient collections. Consequently, when faced with the need to collect payments upfront, they may lack the confidence and knowledge to navigate this process. The bottom line is that healthcare providers feel ill-equipped to discuss financial matters with patients. When this discomfort percolates to staff, upfront collections don’t happen. 

The remedy

Train clinicians and staff to educate patients on their financial responsibilities Physicians and management must model the collection of upfront payments to staff.  Consider conducting mock training scenarios. Model handling objections. Make sure they’re comfortable explaining what the practice expects of patients. Emphasize that collecting payments upfront, or prior to providing services, can represent a shift from traditional practices patients are accustomed to. Pushback may occur, particularly among older patients who are accustomed to being balance billed only. Mentioning how your practice or group with aid with payments (custom plans, financing, financial counseling) will demonstrate your dedication to providing the care the patient needs. You can also share that you can accept many forms of payment including, cash, check, credit/debit card, text to pay, or email. 

The language of compassionate upfront collection 

Change is tough for everyone, particularly when change involves money and health. This guidance will prepare you to educate your staff and your patients on the importance of collecting patient payments upfront. Respond with kind clarity, but hold firm. Keep in mind that patients, too, have heard about bankruptcies stemming from medical bills. Offer as many alternatives as possible to keep the patient on the path of receiving care. 

First, prepare for objections

If the patient says:

 Why has the policy changed? 


We have to remain compliant with governmental regulations and with the changes in payer policies. This is the only way we can keep providing care. 

If the patient says:

What if I can’t pay today?


If you’re not comfortable paying today, we can reschedule your appointment to a time that’s more convenient for you.

If the patient says:

Medical costs are outrageous these days! Who’s causing this? The drug companies? The doctors? 


American healthcare is very complex right now. I’m not really an expert on all the forces causing price changes. These are our policies and we’re happy to work with you on a payment plan, financing, and healthcare payment guidance. 

If the patient says:

But I've already paid or this should be covered by my insurance. 


  • Your last payment was a copayment/estimated amount/deposit. Would you like to learn about our custom payment plans and financing options? Many patients rely on them these days.   
  • We’ve checked with your insurance and confirmed that this is your share of this cost. Ignoring that constitutes insurance fraud. But we have several options to help you meet your responsibilities in a way that works for you. 

If the patient says:

But I never received a patient pay estimate / estimation of benefits.


I will mail that out today. The patient responsibility amount is circled in the right column / listed at the bottom in red / at the top in bold. 

If the patient says:

What if you overcharge me?


We will refund you any overcharges. It’s the law. The estimates are not always exact, but all expenses will be clearly listed. 

Two providers who provide estimates to insured and non-insured patients

Florida’s Health First hospital redoubled its efforts with upfront collections by providing 100 percent of their patients with estimates pre-service. They increased their upfront collections by 27% and experienced 2.7% net revenue in point-of-service collections. Given that the industry benchmark is 0.7%, their gains have been dramatic.

Shortly after this shift, Health First collected their highest percentage of upfront revenue ever. The year saw an increase of $2 million in upfront collections. Not only did this simple shift improve their collection rate, customer satisfaction rose as well.

In another example, a small Illinois hospital boosted point-of-service patient collections by 300 percent by collecting patient payment responsibilities upfront. This step helped the hospital to exceed their $7,000 per month collection goal for all point-of-service payments, including walk-in visits.

Deliver accurate estimates to improve upfront collections 

The journey to effective upfront collections is multi-faceted. It involves educating staff and physicians about the importance of this practice, not only for the organization's financial health but also for patient transparency and satisfaction. It requires a cultural shift within the organization, where collecting payments is viewed as part of the healthcare delivery process. This change is facilitated by providing the necessary training and tools that empower staff to handle these conversations with confidence and empathy.

Moreover, technology plays a crucial role. The implementation of user-friendly systems like MD Clarity’s Clarity Flow that can accurately estimate patient responsibility and streamline the collection process is essential. These systems, combined with a compassionate and well-informed approach, can significantly alleviate patient apprehensions about costs, leading to a more positive healthcare experience.

In this evolving healthcare landscape, upfront collections are an integral part of the equation. Organizations that effectively navigate these waters will not only see improved financial outcomes but also foster stronger relationships with their patients. 

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