Blog Post

How to Address Self-Pay Collections during a Pandemic and Beyond

Addressing Self Pay Collections Web

The difficulty of collecting patient balances is an ongoing reality for revenue cycle leaders. With COVID-19 forcing millions of people out of work, self-pay balances are at even greater risk as consumers tighten their purse strings and reprioritize expenses. This presents a dilemma for providers in their local communities: how to ethically pursue patient balances while demonstrating empathy and understanding of the situation?

What’s at Stake

Self-pay collections account for a growing portion of overall health system net revenue. This has largely been driven by the prevalence of high-deductible health plans (HDHPs) increasing the patient’s portion of overall health cost. Between 2014 and 2019, the percentage of covered workers with a general annual deductible of $2,000 or more for single coverage increased from 18% to 28%.

These growing out-of-pocket (OOP) costs for patients have left providers more dependent on a less reliable source of reimbursement. Additionally, high levels of unemployment in this challenging economic time will also increase the number of individuals who may have lost their health insurance altogether, further driving up the self-pay portion.

As the COVID-19 case count increased, some health systems suspended patient billing for related testing and treatment to encourage patients to seek care. But since self-pay balances for non-COVID-related services still make up a significant portion of accounts receivable (A/R), they cannot be ignored indefinitely. Doing so would result in negative consequences across the revenue cycle, such as increases in A/R days, bad debt write-offs, and resource expense, along with a decline in cash flow.

At the same time, public perception within the community will deteriorate for those organizations that fail to provide a transparent and patient-friendly billing experience during the pandemic and beyond.

What Organizations Should Be Doing

There is no universal playbook for optimizing self-pay collections during a pandemic. However, focused strategies that strike the right balance between collecting from patients who can afford to pay and providing flexibility for those that cannot are available. Additionally, organizations must critically evaluate the consumer-facing components of their self-pay functions to ensure they are aligned with near- and long-term realities in this new environment. Reassessment of key pre- and post-visit activities should also be part of a comprehensive organizational strategy.

The table below summarizes several traditional approaches for addressing patient collections along with suggestions for adapting those approaches to the current reality.

Revenue Cycle Area


Suggested Actions in a COVID-19 Environment

Price Estimates

Let patients know OOP cost up front.

Determine whether patient estimate algorithms need to be updated for COVID-19-related services to discount or eliminate patient liability.

Financial Clearance Policies

Develop a comprehensive policy that incorporates screening for Medicaid eligibility, consumer discounts, and charity care.

Consider implications of enforcing financial clearance in the short and medium term. Suspend or revise home liens, aggressive collections, or follow-up cadence in the current environment.

POS Interactions

Collect insurance information and payments, and complete other finance-related processes during check-in.

Increase sanitization practices, and encourage mobile payments via contactless or facial recognition.

Payment Technologies

Offer traditional payment options (cash, check, credit card, online).

Partner with established vendors to implement mobile payment applications, and ensure support for popular touchless payment options such as Venmo, PayPal, Apple Pay, Google Pay, etc.

Propensity-to-Pay Segmentation

Evaluate factors such as credit score and payment history to categorize and prioritize outreach.

Reassess stratifications and outreach strategies. Consider temporarily scaling back outreach attempts to consumers who traditionally have low to medium propensity-to-pay scores.

Payment Plans

Follow a structured approach with payment minimums and term limits based on statement balance.

Provide alternative third-party financing options and include more flexible payment plan options, such as deferred payments or variable terms.

Bad Debt Placement

Adhere to a standard statement cycle and debt placement process for nonpayment (e.g., three statements, one pre-collection letter, account sent to agency at 120 days).

Consider the implications of enforcing collections processes in the short and medium term. Adjust the timeline for bad debt placement.

Additionally, many insurance providers have waived the cost for COVID-19 tests and diagnostic services, requiring organizations to update patient billing processes. For uninsured individuals, $1 billion was appropriated to reimburse providers for testing while also requiring organizations to abstain from balance-billing any patient for COVID-related treatment. Staying informed on evolving payer requirements and assistance programs will ensure providers’ ability to act as a patient advocate throughout the billing process.

How to Proceed

Throughout the pandemic, healthcare organizations must continue to align process, resource, and technology infrastructure to optimize their self-pay collections strategy. Providers also need to be sensitive to patients’ needs. Those that support a solid and compassionate self-pay collections process in an age of increased patient financial struggles will benefit from removing as much ambiguity as possible. This includes giving patients a clear understanding of their financial responsibility along with awareness of available resources.

Building a culture that acts on patient needs and demonstrates empathy while maintaining focus on the organization’s financial requirements should be a foundational tenet. This may include approaches such as delay/defer policies in response to challenges with financial obligations, “touch-free” payment options that adhere to social distancing guidelines, and ongoing process evaluation to improve collections performance.

Providers that fail to proactively address this area of the revenue cycle now place their future financial health at risk. But by prioritizing a patient-centric approach, organizations will improve their financial outcomes.