Financing Eyecare Services

Many ophthalmology practices find themselves functioning as a finance company for patients’ unpaid balances and co-payments.

Carrying some of these balances for certain managed care plans may be inevitable, but acting as a finance company‹a finance company that charges nothing for its services‹is not a business strategy in your best interest.

The best collection strategies include collecting at the time of service; submitting “clean claims” in order to effectively collect all contracted claims; and offering various forms of financing for balances owed by patients. Financing allows you to collect payments when the patient is not able to pay cash or to write a check at the time of service.

Encouraging the Use of Credit Cards
Patients are accustomed to physicians accepting the use of a credit card to pay medical bills. Practices accepting credit cards have experienced improved cash flow, reduced billing costs, reduced uncollectibles, etc. Unfortunately, many practices don’t adequately promote the use of credit cards as a valuable service for the patient. Several approaches the practice staff can take to encourage the use of credit cards by patients include

  • Having prominent signage promoting the practice’s acceptance of credit cards. o Usually the credit card vendor provides this signage.
  • Advising patients (when scheduling telephone appointments) of your payment policy.
    – Good telephone training is critical for this step. Patients should never be made to feel that the telephone conversation is focused on a financial transaction rather than on their medical needs.
  • The Academy’s new online telephone training course can be accessed at
  • Including your financial policies in your patient information brochure, website, and telephone recording.
  • Posting a sign at the patient checkout station.
  • Including credit card payment options on all bills you send out.
  • Considering offering a discount to patients who pay by credit card.
    – This discount incentive is usually not allowable for your Medicare and contracted patients.
  • Offering to handle the transaction by credit card when you make collection calls to patients.

Communication of your new financial policy to established patients needs to be handled diplomatically. When staff members are learning a new policy, they may feel uncomfortable asking for credit card payments. This initial discomfort should not be conveyed to the patient. Rehearsing with a script will help. Some script phrases might include

When making an appointment by phone or when leaving the office: “ We’ll see you at 10:00 am on Wednesday the 28th. Don’t forget that your PPO requires that we collect your $10 co-payment before you see the doctor, and for your convenience we can place the charge on your credit card.”

When patients arrive in the office: “ Hello. It’s nice to see you. I see that your insurance requires a $10.00 co-payment. At the end of your visit, I’ll be able to give you an itemized bill for your records and accept your payment by credit card, check, or cash.

As you change policies and are successful in both avoiding current and reducing outstanding receivables (60­90 day), you can use either credit cards or alternative funding programs to reduce the old receivables. These patients should be contacted and offered the opportunity to handle their account by credit card or alternative funding. For those accounts in which payment is not received, either send them to collection (more than 90­120 day) or write off the balance (in the case of financial hardship or low balance). Note: When writing off Medicare co-payments, you must document financial hardship. Write-offs for financial hardship should not be routine office policy.

Many surgical patients are responsible for a portion of their bill. This amount is usually known by your billing staff in advance. Ideally, collecting all or a portion of the bill for noncovered surgical care should be done prior to hospitalization, but in some instances the patient may be too anxious to take part in a financial discussion. Good staff training is critical under these circumstances. While almost all patients understand that you are running a business, no one wants to feel like a customer while receiving unsettling medical information.

  • Good patient information brochures, good patient and family education, and discussing finances in private (away from the reception area) are important.
  • A message at the bottom of the statement‹such as “We can accept a credit card payment by phone to handle this balance. If a credit card payment is not an option for you, please phone the office to discuss alternative funding programs”‹ is recommended.

The optical dispensary is a retail business, and as with other retail businesses, the goal is both to provide patients with what they want and to maximize sales. Optical sales can range from less than $100 to more than $1,000. As in other segments of our consumer market, financing is a way to enable patients to have the eyeglasses they really want but may not be able to pay for up front.

Most banks or other financial institutions have a processing fee that ranges from 1.5% to more than 5% and is either a per-transaction fee or a percentage of the charge. Professional medical associations, such as the Academy, the AMA, and the state medical societies, have sponsored credit card plans that offer physician or association benefits. Credit card companies are very competitive. Don’t accept the first offer you hear. Do comparative shopping.

Some patients’ financial histories make them ineligible for credit cards, or in some cases, a patient’s credit cards are at their credit limit. In cases like these, there are finance companies that specialize in funding medical services. These credit plans have high interest rates and a requirement that the practice agree to pay the unpaid balance if the patient defaults.

An Internet search identified the following websites that offer patient funding services. (NOTE: the Academy has not researched these companies and makes no recommendations regarding them.)


The goal of utilizing patient funding programs, including use of credit cards, is to transfer the funding of your practice’s services from your accounts receivable to an entity that is in the business of providing financial services.

Our experience in many practices is that there is little resistance from patients to using credit cards, and if the communication of the policy is well designed and well rehearsed, patients adapt easily. The use of credit cards or of funding programs can also be an asset in promoting elective services in your practice. Advertising refractive surgery with the tagline “we can provide financing” places you one step ahead of the competition.

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