Payment Plans 101: Intro To Payment Plans

Your providers likely offer payment plans. Do you know how to access them?

November 10, 2021

Payment plans in healthcare are becoming increasingly prevalent. In 2020, survey results showed that 87% of providers offer payment plans.  While payment plans can be a great tool for paying medical bills, many patients still don’t know how to access them. This article will help you (1) understand how payment plans work, (2) prepare to obtain a payment plan, and (3) help your healthcare provider offer payment plans.

What is a payment plan? 

A payment plan is an agreement between a provider and a patient, wherein the provider allows the patient to break up a balance owed into smaller installment payments over an agreed-upon time frame. This typically occurs when patients receive a medical bill they cannot afford to pay for in one lump sum.

As a patient, it is not uncommon to receive a bill requesting the payment of hundreds of dollars within just 30 days of receiving the bill. However, 24% of consumers reportedly can’t pay a $400 medical bill in full. Payment plans exist to fill this gap. They allow patients the flexibility of spreading payment out over months while also ensuring that providers receive the fees they’ve earned. 

While some might suggest that provider-offered payment plans aren’t necessary because other independent financing solutions exist, this would mean overlooking one of the core features of payment plans–generally speaking, payment plans offered by providers are interest-free. Their interest-free nature makes them a great alternative to the predatory financing options typically offered–LendingClub and CareCredit. Because payment plans are not loans but simply payment arrangements, they generally do not require any credit check, meaning patients of all financial backgrounds should be able to utilize them. 

How do you obtain a payment plan?

While payment plans are usually a no-brainer for patients, it is unfortunately rare to find a provider that offers payment plans as a standard payment option. Providers normally prefer to collect payment in full whenever possible, thus only use payment plans as a last resort—as such, obtaining a payment plan arrangement will typically require a bit more work from you, the patient. 

Once you receive your bill (and determine that you will need a payment plan), your first step should be to contact your provider. Let them know that you received the bill and, if you are unsure if the bill is accurate, verify that the amount due is correct. Next, notify the clinic that your current financial situation does not lend itself to payment under the current terms of the bill. Reassure them that you intend to pay your bill in full, and explain that it is just not possible to do so in one lump sum. Request that they enable you to make monthly payments on a schedule that works for you–it’s a good idea to consider beforehand what frequency and amount you will work for you. If possible, especially if they are hesitant, let them know that you would be willing to make the first payment immediately. 

Once you get the provider to agree to allow you to make payments on the bill, don’t forget to ask whether the payment plan is interest-free. If it is not, it may be worth exploring other financing options or requesting that the provider not charge interest. Finally, be sure to request documentation of the agreed-upon terms of the payment plan. Doing so will help protect you in the future if there is any confusion surrounding your arrangement with the office. 

How can you help your provider offer payment plans?

One of the biggest reasons providers don’t offer payment plans more broadly is that they are incredibly manual to implement without the proper tools. Front office staff members often end up tracking payment plans on spreadsheets (or, even worse, on sticky notes), and the already busy office staff is left trying to remember which days to charge patients’ cards. Plus, patient card information will need to be stored in a PCI DSS compliant manner, throwing an additional challenge into the process.

Essentially, administering ad hoc payment plans is a nightmare for providers. But patients overwhelmingly want this option. And with the cost of healthcare rising for patients, providers need to start offering what patients are asking for: interest-free financing options.

So, who can help? 

Peachy can. And you can.

Peachy enables providers to implement automated, self-serve payment plans. No more negotiating payment plans with patients over the phone, tracking payment dates in spreadsheets, or keeping card information on a sticky note in the desk drawer.

And you, dear reader, can help them enable this by referring them to Peachy

You shouldn’t need to call your doctor’s office to ask about a payment plan. Flexible payment options should be the default. And we want to help you enjoy that. Just let us know who your providers are, and we’ll do our best to help them start offering you the simple, easy, and interest-free payment plans you deserve.

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Published on: 
November 10, 2021

Note: This is not to be taken as tax, legal, benefits, health or financial advice. Since rules and regulations change over time and can vary by location, consult a lawyer or financial expert for specific guidance.

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