Guest Blog: New Era of Self-Pay Calls for New Approaches to Patient Payment

By Pete Heydt

Out-of-pocket healthcare costs are climbing, tightening pressure on patients’ pocketbooks, while the proportion of self-pay patients jumped to 46% by the end of 2024, a recent HFMA webinar shared.

It’s a finding that feels all too familiar for physical therapy practices—and it’s one that leaders must address to protect revenue and the patient financial experience this year.

An Emerging Focus for Therapy Practices

Even as researchers begin to study the factors that influence whether a patient will continue therapy or choose to self-discharge from care, few are examining the role that increased financial responsibility plays in these decisions. Instead, such studies focus on the patient’s perception of the progress made, the complexity of the condition or the approach to pain management.

But physical therapy—along with occupational and rehabilitative therapy, in general—has always presented unique challenges for patients and practices when it comes to the financial aspects of care. For example, patients often receive care multiple times a week, generating a new claim with each visit. Imagine what happens when a patient receives multiple billing statements, each with a different balance. Suddenly, navigating the cost of care becomes confusing and, if the practice hasn’t prepared the patient for this, quite stressful, too.

Even among physical therapy practices that take a proactive approach to patient financial communications, consumers’ confidence in their ability to seek the care they need is changing. Nationally:

• Six out of 10 American adults say they have skipped getting the care they need due to concerns about healthcare costs.
• Four out of 10 people with employer-sponsored coverage say they find it very or somewhat difficult to afford care. So, too, do half of people covered by Medicare.
• Half of working-age adults who have skipped care say their condition became worse because of it.

Financial concerns also increase the risk that patients will either delay payment or simply choose not to pay their medical bill at all—a disastrous scenario for both consumers and providers.

Putting a More Modern Approach into Play

Trends like these make it clear: It has never been more important for physical therapy practices to have a strong patient financial engagement strategy and provide solid financial experiences.

At a time when the success of a physical therapy practice depends in part on its ability to collect out-of-pocket balances for care delivered, organizations can’t afford to leave their payment strategy to chance. Kendra Brummund, revenue cycle director for GO Physical Therapy in Nebraska and for Powerhouse Therapy Billing, also out of Nebraska shared successful strategies from her organization:

1. Look for ways to eliminate confusion in the patient financial encounter. A patient’s account balance for therapy services may continually change, especially when they receive care multiple times a week. This can make it difficult—and frustrating—for patients to stay on top of what they owe. That’s why it’s important to ensure that the order of out-of-pocket balances shown to the patient starts with the most recent date of service. This gives patients a clearer view into which claims have been processed, how much they owe, and which appointments and services have been paid. Taking a proactive approach to eliminating confusion at every point of the patient financial encounter gives patients greater confidence that they can manage their account.
2. Incorporate patient preferences into financial communications. Three out of four consumers want to pay their medical bills digitally, yet 71% of providers most often collect out-of-pocket expenses using paper communications and manual processes, a J.P. Morgan survey found. So often, the mindset among providers is that certain populations—elderly patients in particular—won’t respond to digital communications requesting payment. But that’s a mindset that must shift given that consumer preferences have changed across generations, with many favoring the convenience of digital over paper statements and communications. Kendra specifically notes, “In Nebraska, we’ve found success in sending payment notifications via text and leveraging text-to-payment. A secure link sends patients directly to their bill with all of the details included, such as insurance and office payments made to date, without the need to log into a patient portal.  Across our 19 location physical, occupational, and speech therapy group, our text-to-payment feature collects 40% of electronic payments within the first eight days of bill notification, before a paper statement drops. This not only decreases days in accounts receivable, but also reduces the expense associated with paper statements. It also increases patient satisfaction as the majority of patients—across all ages—want the ability to pay on their own, outside of normal business hours.”
3. Ensure that digital communications have a branded feel. Design communications so that the branding of the practice, including the logo, is clearly presented in all communications and on patient bills. This assures patients that digital communications are legitimate. It avoids confusion and speeds action. In fact, GO Physical Therapy has found that some payments are captured within the first minute after a text is received.

By keeping a pulse on self-pay rates and behavior and adjusting payment mechanisms to focus on flexibility and convenience, physical therapy practices can more protect revenue while strengthening the patient financial experience.