When patients are medically treated, billing is often either first-party claims (billed to the patient directly) or third-party claims (billed to insurance). Knowing about first-party medical bill claims is vital for health providers—especially when dealing with self-pay patients, high-deductible plans, or insurance-denied claims.
What Are First-Party Medical Bill Claims?
A first-party medical bill claim is when a healthcare provider bills the patient directly for treatment, rather than billing an insurance company. This happens in the following instances:
✔ High-deductible health plans (HDHPs) in which patients pay first out-of-pocket
✔ Non-medical services (cosmetic treatments, certain therapies)
✔ Out-of-network or denied claims where insurance will not pay
While third-party billing (insurers pay) requires open communication, accommodating payment terms, and good follow-up to gain on-time collections, first-party billing calls for similar requirements.
Key Challenges in First-Party Billing
1. Patient Payment Uncertainty
Most patients don’t anticipate big medical bills and might have difficulty paying.
Solution:
- Offer cost estimates upfront (as mandated by the No Surprises Act).
- Provide payment plans or discounts for timely payment.
2. Higher Risk of Unpaid Bills
Patients will delay or disregard invoices, resulting in more bad debt.
Solution:
- Install automated payment reminders (email, text).
- Utilize credit card on file systems for regular payments.
3. Compliance & Legal Risks
First-party billing must comply with federal (HIPAA, FDCPA) and state collections statutes.
Solution:
- Train employees on ethical collections practices.
- Partner with a medical billing credentialing services provider to ensure compliance.
Best Practices for Managing First-Party Claims
1. Verify Insurance First (Even for Self-Pay Patients)
- Some patients presume they’re uninsured but have coverage.
- A medical billing credentialing services staff can assist in checking coverage prior to classifying a patient as self-pay.
2. Offer Multiple Payment Options
- Credit/debit cards
- HSA/FSA payments
- Payment plans (0% interest options)
- Online portals for easy payments
3. Send Clear, Itemized Bills
- Avoid confusion by breaking down charges (procedure codes, dates).
- Include instructions for payment or financial assistance.
4. Follow Up Strategically
- First notice: Sent immediately after service
- Second notice: 15-30 days later
- Final notice: 45-60 days, with possible collections referral
When to Consider Outsourcing First-Party Billing
Managing first-party claims in-house can be time-consuming and costly. Many providers partner with a medical billing credentialing services firm to:
✅ Improve collections rates (reducing bad debt)
✅ Ensure legal compliance (avoiding fines)
✅ Automate patient billing & reminders
✅ Handle disputes & payment plans professionally
Final Thoughts
First-party medical bill claims necessitate a unique strategy compared to insurance billing. By using good communication, reasonable payment terms, and good follow-up, providers can reduce bad debt and maintain cash flow.
For collections of self-pay that are problematic in practices, medical credentialing services can make the process less cumbersome without compromising compliance.
Struggling with first-party billing? Concept Billing Solutions excels in patient collections & credentialing—call us now!
