African American elderly couple calculating payments

7 questions to ask providers of long-term payment plans.


A serious illness can put significant stress on a family as unexpected medical bills only add to their anxiety. The frequency of this one-two, illness-compounded-by-debt punch is increasing as changes in deductibles and co-pays make patients liable for a larger portion of their healthcare costs. And that can put your healthcare organization in a difficult situation.

On one hand, you want to help minimize stress and respect the dignity of your patients and their families. On the other hand, you need them to meet their financial obligations.

To balance these conflicting demands, an increasing number of healthcare organizations are expanding the number of payment alternatives available. For patients with larger bills and complex financial situations, some are now offering long-term financing plans. Many others would like to offer this option but lack the staff, resources or desire to manage these financing plans in-house.

The good news is multiple third-party solutions have popped up to fill the gap. The not-so-good news is long-term payment plans and vendors are not created equal. You will want to select the one that works best for you and your patients.

When comparing long-term financing solutions, it’s important to take a close look at your options to determine if they are patient-friendly and support your cash flow and revenue cycle goals. Here are some questions to get the conversation started:
  1. How will patients enroll?

    To achieve maximum patient participation, choose a plan that offers multiple ways for patients to enroll. Most plans are designed for a specific patient enrollment process, like in-person at the point of service, through an online portal, or over the phone. Few plans are flexible enough to offer all these options.
    You will achieve greater enrollment success if you choose a plan that caters to individual patient needs and is flexible enough to integrate with your own work processes.
  2. What are the payment term options?

    Every patient has a different financial situation, and your provider should offer payment terms that allow for flexibility. A general, all-purpose approach is almost certain to create an affordability gap for some.

    Look for plans where the term length is determined by loan balance size. Loan terms as short as six months or as long as seven years are reasonable and help make plans affordable.

    Additionally, consider a line of credit approach to consolidate future or subsequent services, or services across multiple locations or within a single household. Consolidating long-term payment plans into one monthly payment provides a better patient experience.
  3. When will you receive payment?

    Depending on the provider, the return-on-investment for long-term payment plans can vary dramatically. Most plans are set up as “pay-as-you-go,” with your organization receiving reimbursement as patients make payments.

    Consider a different alternative, like gross funding programs where the plan administrator provides full reimbursement upfront. Your organization can receive funds sooner, eliminating reconciliation issues and improving cash flow. The CommerceHealthcareTM patient finance program follows this model and is shown to increase healthcare provider’s net present value of payment plans up to 48 percent, compared to pay-as-you go plans.
  4. Does the plan provider’s reputation align with yours?

    When choosing a healthcare financing plan provider, reputation matters. Patients are more likely to respond to payment requests from well-established organizations with exceptional character and trusted reputations. As one hospital administrator told us, “Our patients would rather work with us than a collection agency.”

    Non-bank financial organizations with limited history and name recognition can lack credibility among patients. Conduct due diligence on prospective partners to find one with values and community standing that reflect your own.
  5. What level of customer support can you expect?

    An effective patient financing plan will offer strong customer support to both your patients and your healthcare organization. Everyone promises it.It’s your job to drill down during the evaluation process to discern what “customer service” really means to each plan provider. What you learn today can help prevent future frustration.

    Seek a lending partner that offers dedicated management and technical staff who will be assigned to your account to address issues, questions and concerns. Find out what will be expected of you during plan setup and operation. Check multiple references to learn about the provider’s customer service performance.
  6. What third-party vendors are utilized?

    It is common practice for healthcare financing organizations to outsource collection and other elements of their patient payment plans to third-party vendors. If outsourced call centers, collection agencies and others are involved, request information on their experience, approach and reputation. Ensure the vendor’s goals and processes align with the goodwill created by your organization’s financing plan.

    One possible alternative is to select a lending partner which provides both funding and customer service. This type of partnership eliminates additional financial risks to your organization and ensures an ideal patient experience.

    Also, be sure to ask how your program will be affected if your provider terminates its relationship with any third-party vendors. Partnerships with third-party vendors change frequently. You – and your patients – will benefit from seamless, long-term relationships.
  7. Is the provider large enough to accommodate volume growth?

    A small healthcare finance company may seem like a good fit for your healthcare organization today, but it pays to look ahead. Not every provider has the capability to scale to meet your needs as your volume grows. And moving your healthcare payment plan management to a larger bank midstream is inconvenient and disruptive. Choosing a partner that can grow with increasing demand may be more efficient and stable in the long run.

As their healthcare provider, you want to see your patients thrive. Unfortunately, increased hospital bills can put undue stress on their finances and life. By offering a payment option that works with their individual situation, you can help ease the pressure and strengthen your relationship with them. And, in the process, you can get paid faster and improve your cash flow.

Health Services Financing (HSF®) by CommerceHealthcare™ enables organizations to offer patients flexible payment terms backed by high-quality customer service. To learn more, visit our website or contact us

Also See

Care, not collections, in a high deductible world
How healthcare providers can use automation to get paid faster