The High Costs of Uncollected Copays

For patients with insurance, the traditional payment model for medical services involves the patient paying a copay up front, and after the fact the patient is billed for any amount not covered by insurance. In theory this would mean hospitals would be able to collect all copays, but in practice this is frequently not the result. Some hospitals even report that a majority of their copays are going uncollected, and this can mean staggering financial losses for the hospitals:

How can hospitals collect more copays? While hospitals can send notices to patients with unpaid copays, the procedure is time-consuming and frequently has very little effect. A more drastic approach involves using the services of a collection agency, but this method is so costly that the expenses often outweigh the returns. The reality is that if a copay is not collected at the time of service, the hospital is unlikely to ever see that money. The best way for hospitals to improve on their copay collection rate is by increasing the number of copays that are collected up front. The good news is that there is one simple step hospitals can take to accomplish this: offer more payment options. This is often the easiest step hospitals can take to see a huge return in the amount of copays that are collected.

Many people don’t carry much cash, so offering other payment options can significantly increase the chances of collecting copays.

Many facilities require that copays be paid in cash, but patients frequently aren’t carrying enough cash to cover the copay. Hospitals can greatly increase the chances that patients will be able to pay their copays up front by accepting multiple forms of payment such as credit and debit cards, checks, and – for employees and their families – payroll deduction. The more convenient the payment process is, the more payments will actually be received – and employees especially love the convenience of having copays and other charges directly deducted from their paychecks. Uncollected copays often result in huge costs for hospitals, but they don’t have to – offering payroll deduction and other payment options can go a long way toward eliminating the problem.