Personal Pay Revenue Cycle Management

Editor's note: This is Part 3 of a 12-part series focused on optimizing medical group financial performance. Each brief in this series takes 2 to 3 minutes to read and identifies specific actions medical groups can take to achieve sustainable financial improvements.

Assessment

This opportunity encompasses two patient groups: Insured patients who are responsible for copays, deductibles and coinsurance; and self-pay patients who are responsible for the full cost of services. Establishing a functional personal pay net collection rate metric for both groups depends on the organization’s financial resolution system. Best practices recommend setting clear payment expectations before services and, when applicable, offering financial assistance options. In an optimal system, each patient’s net collection rate is calculated as the amount collected divided by the total amount agreed to during the financial resolution process.

A conservative estimate of the revenue opportunity can be determined by subtracting the actual self-pay net collection rate from 92% and multiplying the difference by the total expected patient net revenue (including direct personal pay and balances transferred to patients).