Like most health systems, LifePoint Health offers patients several payment options, ranging from up-front payment in full to payment plans that can extend over several years.

Its newest payment method is the “hotel” option, inspired by the standard hotel practice of placing guests’ credit card information on file but not processing bills until guests check out and the payment amounts are known.

Here’s how it works:

When patients scheduling services at LifePoint hospitals receive estimates of their out-of-pocket responsibilities, they are given the option of providing credit card numbers rather than paying up front or establishing payment plans. The card information is encrypted and securely stored.

When the hospital receives remits and the actual out-of-pocket costs are known, emails are automatically sent to patients notifying them of the amounts and that, unless patients stop the payments, their charges will be processed in three to five days depending on the state in which the patient lives.

For example, if a patient was given an estimate of $100 and the actual out-of-pocket owed is $98, the card is charged $98. The patient receives a statement showing a zero balance.

If the patient was given an estimate of $100 and the actual out-of-pocket owed is $200, the patient is notified by email but the card is not automatically processed. “There’s an extended period where we reach out to the patient and say, ‘You authorized us for $100; the bill is actually $200. How would you like us to resolve that? Do you want to charge the $200? Would you like to set up a payment plan?’” says John Kerndl, operations CFO for LifePoint Health.

If the patient was given an estimate of $100 and the actual out-of-pocket owed is $110—within 10 percent of the estimate—the card is charged $110 unless the patient takes advantage of the opportunity to cancel the payment, as per the email notification.

This “hotel” payment option solves two problems associated with out-of-pocket estimates and up-front payment:

The need to refund money to a patient. LifePoint’s policy is that money over-collected from a patient will be repaid to the penny. Charging the credit card after remits have been received avoids the hospital spending staff time and resources to issue small refunds to patients,” Kerndl says.

The need to collect a tiny amount of money from a patient. “If we collect $100 up front from a payment and then we send them a bill for $12 because the estimate was wrong, it just looks bad,” he said. Because the hotel payment option doesn’t charge patients until all costs have been calculated, LifePoint can avoid that scenario.

Lola Butcher is a freelance writer and editor based in Missouri.

Interviewed for this article: John Kerndl is operations CFO, LifePoint Health, Brentwood, Tenn., and is a member of HFMA’s First Illinois Chapter.

Publication Date: Wednesday, November 04, 2015