Easy Pay Solutions

How To Set A Payment Plan Policy

Payment plans are becoming a necessity in many healthcare practices. The treatments your patients need are simply too expensive, and their deductibles are too high for them to pay a large balance.

In order to collect the full amount of billed services while preventing past due A/R from climbing, payment plans are a good option. To make payment plans successful you’ll have to do a little planning yourself. Below are some simple steps that can help you develop an effective policy.


Do some analysis of your billing. What are your average billed amounts for specific treatments, office visits, labs, etc? Identifying these amounts is essential to developing a payment plan policy. If you know your average billed amounts and how your patients pay them, you’ll know that anything over those averages will have a higher probability of going past due.

Discover the price point at which a high percentage of patients have trouble paying their bill on time. If 80% of your billing under $75 gets paid on time but only 57% of billing between $75 and $100 gets paid on time, you may need to use payment plans for anything over $75. (I realize these numbers are probably low for most practices – use the numbers that you discover for your patient panel).


Give close attention to the demographics of your patients. Knowing the average income and how that affects their economic situation will help you determine how long to spread payments out. (obtain these figures from your local Chamber of Commerce or real estate professional)

It works like this. If you know that the average income in your area is $53,000 annually and the amount you need to live comfortably is $60,000 (these are actual numbers from the place I live), then you know that the ‘average’ family will probably have trouble paying unforeseen medical bills.

You also know that that ‘average’ family is probably already struggling. An additional monthly payment is going to increase that struggle. So, you can reasonably conclude that the longer you give your patients to pay, they better they will pay.


Automate payment plans with software. Manually managing payment plans allows the patient to stay in control of whether or not you get paid. You will need a ‘set it and forget it’ program that automatically debits the patient’s credit or debit card for the agreed upon balance on the agreed upon date. That way you control when you get paid instead of relying on the patient to remember he made an arrangement and needs to write a check.


People are often bad at revisiting a policy once it’s written. We remember the work we put into it to get it off the ground in the first place and don’t want to redo that work. But revisiting your policy and adjusting it from time to time is necessary. Economic conditions change. Pricing to patients changes. Insurance coverages change. Reviewing and adjusting your policy should be done at least yearly. You may never need to change it but it’s good to know when you should.

These four steps will give you a start to writing your payment plan policy. If you need help, please contact us. We have written custom policy for many practices and can walk you through or give you some templates to consider. Whatever the policy ends up being, you should at least have one in place. It will help your patients and your practice.

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