RCM Foundation Series · Continuity Practice Partners
Module 8 of 9
Module 8 · Patient Collections
What this module covers
After insurance pays their portion, whatever remains is the patient's responsibility. How that balance is communicated, collected, and managed directly affects the clinic's cash flow — and the patient experience. In a therapy clinic where patients come in repeatedly over weeks or months, patient balances can accumulate quickly and quietly if there is no consistent process for collecting them.
What patients owe
Depending on a patient's plan, they may owe any combination of the following after insurance processes their claim.
Copay
A fixed dollar amount due at each visit, regardless of the service cost or what insurance pays. This is the most predictable patient responsibility — it should be collected at check-in every time, before the visit begins. There is no reason to wait for the EOB to collect a copay.
Deductible
The amount a patient must pay out of pocket before insurance begins covering services. High-deductible health plans are increasingly common. A patient with a $3,000 deductible who has not yet met it owes the full allowed amount for every visit until the deductible is satisfied. This can be estimated at check-in using eligibility verification data and collected as an estimated patient responsibility.
Coinsurance
A percentage the patient pays after the deductible is met. For example, 80/20 means the payer pays 80% of the allowed amount and the patient owes 20%. This cannot be collected precisely at the time of service since the exact allowed amount is determined by the payer — but an estimate can be collected and reconciled after the EOB arrives.
Non-covered services
Services the patient's plan does not cover at all. The patient is responsible for the full cost — but they must be informed before the service is provided. Informing a patient after the fact that a service was not covered is a collections and relationship problem that could have been prevented at financial clearance.
Why TOS collection is the most important step
Time-of-service collection is collecting the patient's known portion — copay, estimated deductible, or prior outstanding balance — before or at the time of the visit. It is consistently the highest-probability collection moment in the entire revenue cycle.
Once a patient leaves without paying, a statement is generated and mailed weeks later. By then the visit is a distant memory, the bill is unexpected, and the patient is less motivated to act quickly. Statement response rates are significantly lower than in-person collection rates. The downstream cost to send statements, follow up by phone, and potentially refer to an outside collections agency is significantly higher than a brief conversation at the front desk.
Staff often skip TOS collection because the conversation feels uncomfortable. That is a training and culture issue — not an unavoidable reality. A short script, a clear expectation, and management support makes this step routine. Without all three, it will remain inconsistent.
The patient collections process
After insurance processes and a patient balance is determined, the collections process follows a sequence. Each step should be defined, documented, and consistently applied.
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Statement cycle: After the EOB posts, a patient statement is generated and sent. Most practices send statements on a defined cycle — typically monthly. The statement should be clear, itemized, and easy to understand.
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Follow-up outreach: If the statement is not paid within a defined window, billing follows up by phone, patient portal message, or text — depending on the practice's tools and the patient's stated communication preference.
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Payment plan: When a patient cannot pay in full, a documented payment plan policy determines the terms. This is a management decision — not a front desk or billing judgment call. Minimum monthly payment, maximum plan length, and approval process should all be defined in writing.
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Small balance write-off: Below a defined threshold, it may cost more to collect the balance than the balance is worth. The write-off threshold is a management policy decision — documented and applied consistently to every account, not decided individually by billing staff.
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Collections referral: After a defined period with no payment and no payment plan in place, unpaid balances may be referred to an external collections agency. The timing, threshold, and agency relationship are management decisions that should be documented in the collections policy.
What breaks — and what it costs
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Balances accumulating visit after visit: A therapy patient with a $35 copay per visit who is never asked to pay can accumulate a $350 balance over 10 visits before anyone notices. By then collection is harder, the patient is surprised, and the relationship is strained — all of which were preventable.
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No documented collections policy: Each staff member handles collections differently. Some patients get payment plans, some do not. Some balances get written off at $5, some at $50. Inconsistency creates compliance risk and is unfair to patients.
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Non-covered services not disclosed upfront: Patient receives a bill weeks after the visit for a service their plan does not cover. They did not know, they were not warned, and now the practice has a collections problem and a patient relations problem at the same time.
Before the next module
Ask your team: do we have a written patient collections policy? What is the TOS collection expectation — is it documented and is it being followed? What is the payment plan policy? What is the small balance write-off threshold? If the answers vary by who you ask, those are gaps. Write down what you hear.
Knowledge Check
3 questions · pass all 3 to unlock the next module
1. A therapy patient has a $35 copay per visit. Over 10 visits, the front desk never asks for it. The patient receives a $350 statement. What is the most likely outcome compared to collecting at each visit?
2. A patient owes $420 after insurance processes. They say they cannot pay in full today. What should happen?
3. True or false: The small balance write-off threshold — the amount below which a balance is written off rather than pursued — is a decision billing staff should make individually for each account.
Module 8 Complete
Module 9 is unlocked →
Staffing the Revenue Cycle — building a clinic where the process works reliably and does not depend on any one person.