With patient responsibility making up a larger portion of a consumer’s healthcare costs than in the past, it’s important that your third-party agency approaches these debtors as patients first, since many times the patient may either be confused or simply needs a payment plan in order to get back on track. Either way, during many of these initial negotiations, collectors are finding themselves positioning closer to customer service reps than your traditional collection agent.
According to a new report from global payments company TSYS, in 2016, 68% of patients failed to fully pay off their medical bill balances. That’s a 15% increase from the previous year. TSYS’s healthcare survey also revealed that 54% of medical offices reported that up to 9% of all accounts go to bad debt. Of this debt well more than half (56%) takes over three months to collect. This firmly falls into third-party collections territory which begs the question, “How does your agency approach your patients?”
If your agency simply demands payment and offers no additional customer service to your patients, you might consider changing your overall approach. Collections work has evolved greatly over the last few years but none moreso than in healthcare collections which has experienced an even great level of disruption since the advent of high-deductible health plans fundamentally changed the type of health coverage available to your average patient who is covered by employer-provided insurance.
Another very important aspect is whether or not your agency can or will accept payments from HSA accounts. A study by Bankrate shows that 68% of American shave skipped recreation activities in the last year because they simply can’t afford them. Credit card debt, student debt and paying everyday bills are leaving plenty of people with little left for fun, let alone medical expenses. So, accepting payments from a patient’s Health Savings Accounts (HSA) can be a fundamental gamechanger for a lot of patients who have been contributing a portion of their income to an HSA account and might have some savings that they simply did not think to use or did not know enough about how to use it correctly.
While the primary task of collection agents is to get your delinquent accounts paid, doing so today requires a certain level of nuanced customer service and basic healthcare billing knowledge mixed with exceptional negotiating skills that should, in the long run, return better overall results to the organizations they serve as well as a positive perception by their patients.
Finally, the TSYS report also notes that administrative costs continue to rise for healthcare organizations. In fact, over a four-year period from 2009 through 2012 costs related to billing actually rose three points from 14% to 17%. Citing outdated processes such as faxes and redundant processes related to administrative task like billing wastes time and weighs on staff morale. Another example outlined in the report is the cost of keeping records using paper. PricewaterhouseCoopers found that the average organization wastes about $20 in labor just filing a paper document. Losing one? $120-$220 lost depending on whether the document was found or not! Simply moving over to digital recordkeeping and getting the delinquent accounts out of the office after 90-days will alone save your organization money, time and aggravation not to mention how much it will help their patients by having their files and invoices readily available. In the same manner, the third-party agencies these organizations work with should similarly be using digital records which will allow for a much more accurate, secure and fast way of sharing information.
At the end of the day, while we all must keep patient responsibility in mind, we can also take some responsibility for making that easier for your patients as well.
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