Payment policies for aesthetic services are more akin to booking a luxury cruise than buying a car. You can’t repossess a facelift, so it only makes sense to require payment in advance and to charge a substantial booking fee. The business of medical aesthetics may seem straightforward—you provide a service, the patient pays a fee—but the reality of patient billing is more complicated. For example, how do you handle payment for procedures like neurotoxin or filler injections that may vary by appointment? Do you charge for consultations and no-shows? How can you protect yourself against charge-backs? Following are seven timely tips on how to create payment policies that improve workflow, patient satisfaction and practice growth.
No. 1: Don’t be a money handler.
“When it comes to money, aesthetic practices need to set up an interface between the doctor and the patient,” says Christina Majeed, chief product officer of Nextech. “It’s important to hire a patient coordinator as a conduit for money matters. Patients need to view their doctors as healers, not merchants.”
Andrew Rosenthal, MD, plastic surgeon in Boynton Beach and Boca Raton, Florida, and medical director of Modernizing Medicine’s Electronic Medical Assistant software, EMA Plastic Surgery and EMA Cosmetic, agrees. “Our patient care product coordinator presents payment information both verbally and in writing during the initial consultation,” he says.
No. 2: Do adopt payment policies that reflect the type of practice you want to run.
Payment policies start with the forms of payment you are willing to accept and comprise details ranging from when payment is due to how you handle missed appointments. Here’s a typical policy based on a review of practice websites:
All cosmetic services must be paid in full on the date the service is scheduled. We accept payment by cash, debit card, personal/cashier’s checks with valid ID, and Visa, MasterCard and American Express credit cards. We assess a $25 fee for each check returned because of insufficient funds. For your convenience we do partner with [name of patient financing firm] which may allow you to pay for some services over time.
“The forms of payment you accept can depend on the type of practice you are trying to establish,” says Majeed. “If you pride yourself on being a small, high-touch practice, maybe you can get away with accepting cash and checks only and keeping overhead down. If you want to grow your practice, it will certainly be better to accept whatever form of payment is easiest for the patient. Taking credit cards is often the easiest and being able to accept payment online through your website makes payment even more convenient. For example, a patient who bought the Obagi system during an office visit and loves it is more likely to buy it through you again if you offer the convenience of online purchases. You want to offer the payment type patients prefer.”
Every form of remuneration has its advantages and disadvantages—even cash. “It is wise to at least consider offering a small discount for payment in cash because credit card transactions do cost you, and with cash in hand there is no risk of charge-backs or canceled checks,” says Dr. Rosenthal. “You do need a good practice management system. To minimize the risk of employee theft—something that happens more often than you would think—your reporting systems should reconcile quotes and payments, and guard against unauthorized changes. It should also give you a history of who used the files and when they accessed them.”
Policies governing payment for surgery are the most consistent. “When I came into the industry in 1978, surgeons were already requesting deposits—a booking fee based on the total cost of the planned surgery—and, in many cases, patients were asked to pay the full fee at least 10 working days before going into the OR,” says Karen Zupko, a practice management specialist working primarily with plastic surgeons.
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“We do collect for surgery two weeks in advance,” says Chicago-based facial plastic surgeon, Steven H. Dayan, MD, “but it isn’t always practical to get payment in advance for neurotoxin and filler services. Until you’ve seen the patients and talked with them, you don’t know what the charges will be. Most patients come in asking, ‘What do I need?’ and may leave with a little Botox, some filler or both. This could change with every appointment,” he says.
Still, counsels Majeed, it is a good policy to conduct the consultation, let your patient coordinator present and collect the charges, and then perform the services. “For this reason, both patients and practices can benefit from creating packages,” she says. “Patients can buy a package, finance it through Prosper or CareCredit, and the practice can deduct the appropriate amount from the prepaid package at each visit.”
No. 3: Do pay attention to credit card costs and protect your practice from credit card fraud.
Have you upgraded your credit card system to meet the new EuroPay, MasterCard and Visa (EMV) standard? The EMV card networks developed the standard more than a decade ago, and it is widely used in Europe and other nations. Businesses in the U.S. were told the deadline to offer EMV technology was October 1, 2015, but industry experts estimated that fewer than 40% of U.S. citizens have credit cards with chips and fewer than a third of U.S. businesses had installed chip and pin terminals by that date. So why make the change in your practice? Because failure to do so could leave you holding the bag for any credit card fraud.
“My recommendation is that every practice be compliant, but the transition is expensive,” says Majeed. “The decision depends on how much risk the practice is willing to take. If the practice believes there is zero chance of loss, perhaps the cost outweighs the risk. If you estimate the risk at higher than 5%, compliance is essential. All fraudulent transactions stemming from a loss of credit card information through the practice become the responsibility of the party that is least EMV compliant. Credit card systems should also be PA-DSS 3.0 compliant, which means the system meets the latest payment card industry data security standards.”
The real risk is in how you handle credit cards, says Dr. Rosenthal. “Before we began using Modernizing Medicine’s EMA software, we had credit card numbers written on sticky notes attached to patient files or located in the margins of paperwork on booking software. This left information open to theft from viruses,” he says. “Credit card companies can often trace theft to a particular business, and that business can be liable if they have mishandled credit card data. EMA encrypts credit card data so the actual card numbers are never seen, yet the data is available if the patient wants to set up recurring payments for treatments or products, for example monthly deposits for a scheduled breast lift. EMA also has remote signature capture as insurance in case a patient tries to deny or charge back a credit card charge.”
Credit card and electronic record systems can be separate. “We have just upgraded our system to keep credit card information in an encrypted form, but we don’t take payments through our EMR,” says Dr. Dayan. “We’ve found it easier and more reliable to stick with QuickBooks.”
Protecting card holder security isn’t the only issue when it comes to credit cards. “Cost is another issue,” says Zupko. “We advise practices to bid out credit card processing services every 18 months. Service fees are not all the same. For example, the TransFirst processing fee for American Express is comparable to Visa and MasterCard. Fees often vary from card to card and service to service.”
Additionally, there is more to choosing a credit card processor than getting the lowest rate. Factors, such as how and when you enter credit card information and fees for incorrectly entering your standard industry code, can increase the total cost of these transactions. Most practices could benefit from expert help when it comes to setting up merchant services.
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No. 4: Do value your time. Charge for consultations and missed appointments.
Adopt a cancellation and missed appointment policy. Post it on your website and email it with appointment confirmations, says Zupko. “Doctors are highly trained specialists; their time is worth something. If you don’t charge for consultations, you may find yourself offering second opinions for free to patients who have no qualms about setting up multiple consults—even after booking surgery with someone else, just to be sure,” she says.
Whether to charge for consultations and missed appointments is a big issue for physicians, says Dr. Dayan. “There is no standard. Your policy may depend on whether your practice is just getting started and its competitive situation,” he notes. “I have always charged for consultations from the beginning. I believe there is value to what I offer. This policy may scare away some tire-kickers but it hasn’t hurt my practice. Charging for missed appointments is a more difficult call. Our policy has been to charge half of the normal fee if the patient doesn’t cancel 24 hours in advance, and we give the money we collect to charity. But today’s patients seem to be much less committed to appointments than they were even five or six years ago, so no-shows are becoming a real problem. We’ve just started taking credit card information when we book an appointment and letting patients know that we will charge a fee—10% to 20% of the normal charge for the reserved time—if they miss the appointment. We’re just testing this and haven’t decided yet if it’s a policy we will keep.”
No. 5: Don’t discount.
“Today clients walk into practices demanding discounts,” says Zupko. “You need to be prepared to explain what each of your services covers and articulate the value you offer. For price-sensitive services, such as breast augmentation, your staff needs to be prepared to offer price-shopping clients a range for the service and explain why prices can vary for different patients. If your practice is more dependent on Internet referrals than word-of-mouth referrals, avoiding discounts can be more difficult. It’s very important to have competently trained people to respond to Web leads. We talked with 151 practices in a recent mystery shopper survey and found that 67% were able to quote a price range for the procedure we asked about. When we were not quoted a fee, the reason was often because the service being requested was not specific enough.
“You are not everybody’s plastic surgeon,” continues Zupko. “Know your target clientele. Women who work with a plastic surgeon for their aesthetic needs and are pleased with the outcome will refer friends. More than 80% of their friends will have comparable incomes. They are in a sense prequalified for your services and less likely to experience sticker shock because their friends will have shared what their services cost.”
Dr. Dayan agrees with the need to minimize discounting. “We do our best not to use discounts as a way to attract patients. Occasionally we may use discount programs as part of an overall program that reinforces our brand,” he says.
No. 6: Do work with one or more patient financing companies.
“We recommend working with a patient financing company like CareCredit for a number of reasons,” says Zupko “Financing allows patients to spread out payments and more easily afford what they really want. For example, a patient who comes in for a breast augmentation may have saved enough for the implant procedure but be unable to cover the breast lift she also needs. Patient financing will allow her to have both procedures without waiting. CareCredit is endorsed by the American Society of Plastic Surgeons (ASPS) and has been for more than 10 years. There is no application fee for patients and procedure fees for practices are reasonable.”
Dr. Dayan uses both CareCredit and Alphaeon Credit. For a list of patient financing companies, read on.
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No. 7: Do select an EMR system that enhances your workflow.
An integrated EMR makes keeping track of money easier and it helps with patient communication,” says Majeed The physician or his assistant uses an iPad application to enter a picture of the patient, click on Botox, enter how much is injected and where, and the information is imediately available at the front desk. There’s no need for the person at the checkout desk to ask, ‘What did you have done?’ This gives aesthetic practices an edge because patients view the use of the latest technology as a sign that the practice is keeping up with the times and makes them more confident in your practice as a whole.”
“Integrated systems with PayJunction prevent errors and fraud. Patient signature capture saves time and avoids the need for re-entering data. All of this is important for the financial health of your practice,” adds Dr. Rosenthal “EMA also allows online payments, something that can be very important when you charge for consultations. The patient can set up the appointment and pay online prior to the consultation, which is safer than taking information on the phone.”
The EMR system that is best for a practice depends on many factors, including size, practice goals, existing systems and, of course, how much the practice can afford. For a list of EMR systems especially targeting specialty practices, read on.
Patient Financing Options
The explosion of patient finance companies has left many practice owners scratching their heads about which to choose—listed below are some that specifically serve aesthetic practices. In addition to asking about enrollment charges, ask how long the company has been offering patient financing, what kinds of programs they offer your patients (loan limits and interest rates vary wildly), and how you can assess their patient approval ratings. The ease and speed of the patient approval process and the speed with which the practice is paid are also important considerations.
Alphaeon Credit www.alphaeon.com
CareCredit www.carecredit.com
CarePayment www.carepayment.com
Enhance Patient Financing www.enhancepatientfinance.com
MyMedicalLoan www.mymedicalloan.com
Prosper Healthcare Lending www.prosperhealthcare.com
SimpleSelect Patient Finance www.simplepatientfinance.com
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Electronic Recordkeeping Systems
Your electronic recordkeeping system should be able to work seamlessly with your payment policies and your preferred office workflow. Here are a few companies offering EHR systems designed with aesthetic specialties in mind.
Advanced Data Systems EHR Software for Dermatology www.adsc.com/dermatology
CosmetiSuite Practice Management and EHR software for aesthetic practices www.cosmetisuite.com
CureMD Dermatology EHR www.curemd.com
Doc2MD EMR www.doc2md.com
eDerm System EHR www.edermsystems.com
EZDERM www.ezderm.com
Modernizing Medicine Electronic Medical Assistant (EMA Plastic Surgery and EMA Cosmetic) www.modmed.com
Nextech specialty-specific healthcare technology www.nextech.com
PracticeStudio Dermatology EHR System www.practicestudio.net
Precision Practice Management www.precisionpractice.com
RevenueXL Dermatology www.revenuexl.com
Linda W. Lewis is the contributing editor of MedEsthetics.
Photo copyright Getty Images.
