8 Ways For Hospitals To Manage Patient Debts!

Health Companies Debt Collection – Meeting the challenges

The growth of any enterprise is dependent on a debt-free revenue cycle. In the healthcare industry, a substantial part of the revenue earnings of practice is lost to patient debts. It is believed that for every dollar billed to a patient, only 35 cents stands recovered. The situation was a lot different a couple of years ago, insurance companies paid close to 90 percent, and the liability for paying the 10 percent were the patients. If for any reason he defaulted, it was referred to collections or written off.

In the current scenario of high-deductible insurance plans, a large segment of patients is not fulfilling the liability of paying their portion of dues, raising concerns in the healthcare industry. 

If a practice has an outstanding bill of $ 1000 on a patient, and his portion of reimbursement to the clinic would be less than $100, it would not hurt the revenue cycle of the practice if the patient ignored the payment nudge from them. 

However, what if the insurance company paid only 70 percent, and the balance 30 percent supposedly was to be recovered from the patient who shows a reluctant intent to pay, this would significantly hurt the revenue cycle of the practice.

The trend followed by many healthcare organizations currently seems to have drifted towards collecting a copay during the time of treatment, and bills for the remainder are sent later. 

Unfortunately, there are many instances where bills are misplaced or forgotten, or in the worst-case scenarios are disregarded. Follow-ups by the practitioner’s office do not elicit any response, the issue carries on without settlement, until collection agencies take over, or the account is simply discharged. This affects the credit of the patient if the bills remain unpaid. The revenue cycle of the provider is adversely affected. 

What are the solutions healthcare companies can follow to streamline collections? 

• Switch to Electronic Billing & Stop Calling
• Restructure Accounting Practices
• Effective Liaison
• Tech Savvy
• E-Payment platforms
• Deferred Payment Plans
• Collection Companies
• Automation Solutions

Maybe these basic guidelines may have the answers.

1) Switch to Electronic Billing & Stop Calling

Electronic billing streamlines the billing process, whereas paper bills are time-consuming. Patients should be made to understand that electronic billing is more efficient and would serve their purpose more effectively. The process of follow-up calls should be discontinued, 9 out of 10 calls go unanswered and elicit no response at all.

2) Restructure Accounting Practices

Most of the billing issues arise from inefficient accounting practices. Very often billing inadvertently includes charges for procedures not rendered, or fails to include legitimate charges. This results in revenue loss for the practice or aggrieved patients that were billed incorrectly.

3) Effective Liaison

The fundamental of the efficient collection comes through liaison. Patients should never be confronted with blunt or terse attempts to have them pay their debts. Instead, an approach that is friendly and warm is well reciprocated and result oriented. The practice also retains the patient’s loyalty.

4) Tech Savvy

Technology is turning our industry very systematized and productive; with clear-sighted use of technology, we can turn corners and eliminate inefficiency. Smartphones have found their way into our lives. We are glued to our smartphones 24/7, and practices should enable mobile billing – replacing paper bills and phone calls with text messages and emails.

Most likely, patient responses will be swift and productive, besides making communications easier for front office staff.

5) E-Payment platforms

One more aspect of technology that will prune the downtime for processing bill payments, practices should tie-up with payment portals that will facilitate bill payments, dispensing the old practice of writing checks and mailing them through the postal service. Using mobile apps or electronic transfers will make life easier for patients liaising with healthcare providers.

6) Deferred Payment Plans

Emergency admissions to hospitals or visits to a medical facility are always an out-off-the-budget-expense for any household, offering patients a payment plan alleviates the burden of a single large payment. Be it $500 or      $1000, lump-sum repayments have the potential of delay, but split into $50 or $100 over a period of time, will expedite the repayment.

7) Collection Companies 

It’s not always prudent to use collection companies, with a kind of reputation, they cause more harm than good. The practice loses the loyalty of the patient, these companies use strong-arm tactics, and with a 25 percent success rate, the debt recovery is not guaranteed. They also charge exorbitant fees for the service.

8) Automation Solutions

Billing companies have proven automation solutions that alleviate manual processes for billing and coding. Especially, if a practice is medium or small, it benefits using a billing company than investing in expensive automation tools. The scale and volume of billing account for claim processing by medium or small practices don’t justify setting up an expensive in-house billing and coding infrastructure.

Concluding: 

Electronic billing mitigates inefficiencies and streamlines the billing process. Account processes also have to be restructured, making sure inconsistencies associated with costs for procedures and services are eliminated and are absolutely accurate. An effective liaison with patients is essential for retaining them for future visits and treatment.