Debt Collection for Healthcare Providers
Simon’s Agency, Inc. is, at its root, a team of debt collectors supported by an exceptional staff that specializes in collecting outstanding medical and health care bills. In 1965 this company was born from a handful of medical clients (mostly independent doctors) and today this very same agency serves over 600 health care industry professionals and groups. Medical debt collection is at the foundation of what Simon's Agency has offered for over 50 years. Learn more about how Simon's Agency can shorten your days in receivables and increase your revenue cycle - Begin your recovery today!
Simon's Agency offers specialized debt collection services for the following medical segments and many more:
In addition to debt collection for healthcare, Simon’s Agency, Inc. also excels in the areas of Consumer Debt Collections, Commercial Debt Collections, Municipal Collections and Early-Out/Self-Pay Pre-Collections.
Selling Debt Recovery to Your Management Team
You've been tasked with finding a third-party debt collector to enhance your revenue cycle strategy. Now what?
Before you can bring in a debt recovery agency to handle your lost receivables you need to get your executives on board. Without the support of your C-Suite you won’t be able to get very far with your plans. You must come up with a strategy that outlines how hiring a debt recovery firm will improve your business and help achieve the goals of the C-Suite members. The step-by-step instructions featured here will give you a good place to start:
Build A case and Set The Stage
Be An Effective Agent of Change
Find an Executive Champion
Revenue Cycle Director
Chief Financial Officer
Chief Executive officer
chief information officer
chief medical officer
three more officers to consider
Build A Case and Set The Stage
The first thing you need to do is build a business case for hiring a debt recovery agency. This means documenting and explaining how this will help your organization achieve its business goals and increase revenue now and into the future. Take a good look at your own organization and ask yourself some key questions:
Why do you want to hire a debt recovery agency?
Clearly state your reasoning. What are you trying to improve? What accounts would the agency work? How do you expect it will increase the organization’s revenue and meet your revenue cycle goals?
What are your goals?
How much additional income do you expect to generate? What kind of improvement to your receivables and revenue cycle do you want to generate? How seamlessly can you integrate your accounts with the agency in order for them to begin their collection process?
What are your challenges?
Which aspects of your business stand in the way of achieving those goals? What part of your organization will stand in your way?
How does this help the organization as a whole?
How will outsourcing help your billing department? In what ways will the employees in this department be able to improve their work once the burden of collections is no longer theirs? What portion of their current work does collection currently represent? Do accounts currently enter a “dead zone” period where they are rarely, if ever, worked internally?
How are delinquent accounts currently being handled?
What efforts does your billing department currently make on delinquent accounts? How effective have they been at collecting debt of a certain age? Where do your current efforts break down?
How are you planning to make this work?
How does the flow of information work? How and when will you receive the collected revenue and how will the agency provide transparency back to you? How quickly can you get these accounts to the agency and how quickly will the agency begin working the files?
1. Find out what portion of delinquent accounts your organization is able to collect. Perhaps you have an 80% recovery rate on accounts under 30 days old, but that dips to 40% at 60 days and below 10% after 90 days. It stands to reason that you should absolutely be looking to place all accounts over 90 days old into a third-party collection agency.
2. Prepare yourself with the statistics: How much money would you place annually? How many accounts does this represent? What is the average balance? How much would you expect the recovery agency to be able to collect? How much increase in annual revenue would that represent for both the billing department and organization as a whole?
3. Does your organization have a large backlog of accounts that could be worked by collections? Is it money that has been long forgotten? If so, consider the windfall of additional revenue this could bring into your organization.
Be an Effective Agent of Change
Once you have crafted your argument for hiring an agency you need to set the wheels in motion. You know that this will help increase your organization’s revenue and allow your billing department to increase its productivity and positively impact your entire organization. Now it’s time to get the rest of the organization ready to embrace this vision and transform your ideas into reality.
You will need someone to act as the primary "Agent of Change." Transformation requires a catalyst and maybe you are the perfect person for the job. But if this can’t be you, you will need to recruit someone who can do this for you. This person is responsible for making this transition possible by aligning the company with your vision. This person should share your goals and possess the knowledge needed to illustrate to the C-Suite how it will help your organization.
Just as a jogger needs to prepare for his morning jog by warming-up and stretching before hitting the pier, so too does an agent of change when preparing to sell their board on a game-changing plan.
1. Be a strong leader. Initiating the path to change requires courage and the fortitude to make bold moves and the willingness to admit to mistakes that may occur along the way.
2. Put the time in. Now that you’ve built your case and educated yourself on the subject of outsourcing debt recovery to a third-party, don’t rest on your laurels. It’s time to start working toward your goals.
3. Be realistic with your goals. Don’t set goals that you cannot meet. In the early going, it’s important to have an achievable model for success even if you expect that result to improve over the long term. You need to build upon the faith of the C-Suite and show them immediate improvement, even if it is small.
4. Find and embrace partners. Your voice is always louder if you get key members of your billing department and the personnel operating on the front lines on board with this idea. Their support is critical to your success as well.
Find an Executive Champion
Once you’ve built your case with your billing department and other stakeholders in this arena, it’s time to bring your idea to the C-Suite. You need the support of an executive to champion your idea to the rest of the board. Gaining their enthusiasm and support will give your project greater weight among their peers. Executives have a higher level, and an oftentimes all-encompassing view of the organization as a whole and will be more adept at seeing additional ways your project can positively affect all parts of the organization. Executives also have direct influence over resource allocation and decision making. Recruiting an executive to share in your vision is one of the most vital and challenging stages to implementing large scale change. Be prepared, speak with confidence and be ready to provide analysis to prove your points.
"You need the support of an executive to champion your idea to the rest of the board. Gaining their enthusiasm and support will give your project greater weight among their peers."
We will now outline some of the questions you can expect from key members of the C-Suite. Each executive has a different perspective that will affect the information you present and the method you use as each will present their own unique concerns. By embracing their concerns and addressing them directly, you will best position yourself to be successful in your endeavor.
Revenue Cycle Director (RCD)
The Revenue Cycle Director’s role is probably the most familiar to you. The RCD most likely reports directly to the CFO and therefore should be consulted before you bring your idea to the CFO. It is imperative that you get this person on board with your idea and championing it with and for you.
It will also help if you speak to the managers of Revenue Cycle that work beneath the RCD and CFO. They are on the front lines of billing and collections and their input should support your agenda of bringing in an outside agency to help them. Without the RCD, the billing managers and representatives supporting you, there is very little chance your idea with carry weight with the C-Suite. The RCD is likely to ask the following questions:
Questions & Answers
1. Will this move help to increase revenue? The answer to this question is of course, “Yes!” Collection agencies provide a specialized service which embodies the core of what they do. Any successful agency should be able to increase the amount of money your organization receives from its delinquent accounts in a way that is both measurable and which moves the needle in a noticeable manner. Click here to understand what it takes to offset losses.
2. Will this allow the organization to increase productivity? Hiring a third party collection agency will get your organization back to doing what it does best - serving its patients and clients. Your billing department in particular will be able to focus on the paying consumer accounts and providing customer service to your base instead of chasing increasingly harder to collect delinquent debts. This strategy should relieve much of the hardest burden from this department which is good for both productivity and morale which will carry throughout the whole organization. Click here to learn how to increase your collections ROI.
3. How will this help the organization retain its customers or patients? This will allow your organization to refrain from engaging your patients in the sometimes unpleasant work of debt collection. It will create a buffer between your customer service and consumers with delinquent accounts. Speaking to customers and patients who are having trouble paying their bills is a specialized skill and many times these consumers will have more than just your debt to pay. Collections professionals are trained to work with consumers to obtain arrangements that can work for everyone. They also have the experience to deescalate confrontations and remain professional and courteous to your customers and patients. Click here to view our negotiating with a debtor blog series.
4. Can we ensure our patients' and customers' personal information is safe? An agency should be able to keep your data as secure, if not more secure, than your organization is able to. Agency’s working with medical debt must be HIPAA compliant (as do all healthcare organizations) but in addition to this, collection agencies are regulated by the FTC and FCC and are in a position where they must safeguard one of their most important assets – your data. The heart of any modern agency lies in their ability to analyze, recall, view and change their data as well as their ability to keep it safe. Any reputable agency should be able to demonstrate how they do this.
Chief Financial Officer (CFO)
You will need the staunch support of the CFO because, more than any other executive, the CFO is concerned with the bottom line and is driven by analytics and return on investment (ROI). This person’s goal is to manage expenses and ensure profit growth while minimizing risk and exposure. Like the CEO, be sure to highlight how outsourcing collections will increase revenue and minimize the organization’s risk and exposure. Use analytics to prove your points and illustrate that every penny collected is a positive ROI since there should be little financial investment (if any) and, with a good agency, the time to transition accounts over to them should take a minimal time investment on your organization’s part.
Your CFO will always be thinking about these points which clearly factor directly into your goal:
• Increasing profit
• Increasing value for shareholders
• Positive ROI
• Measuring and monitoring performance
• Doing more with less
The CFO is likely to ask the following questions:
QUESTIONS & ANSWERS
1. What is the ROI of this solution? You will be much more likely to win over your CFO if you can legitimately show him or her that hiring a third-party agency will help to increase profits and productivity in the billing department. While no reputable agency can guarantee their recovery rate, they should be able to give you a recovery range for what they can reasonably assume they will collect given their track record, your industry and the type of consumers or patients you serve. Compare this to your current recovery rate for accounts at 60 days, 90 days, 180 days, etc. You should be able to illustrate by how much the agency’s recovery rate will surpass your own in-house efforts. Additionally, this would allow your billing department to refocus on your 15-45 day recovery efforts and current payment arrangements which will help increase your organization’s recovery rate for these accounts. By dedicating more of your organization’s time and resources in harvesting the low hanging fruit and increasing the time allotment it can dedicate to customer service for those consumers who are either current or slightly behind, should also increase the revenue for the billing department as well as the goodwill received from your organization which can trickle down to referrals and repeat business.
2. Why should we prioritize outsourcing our collections? Why shouldn’t we? Doing so will increase revenue for the organization while relieving a struggling department that is presumably overwhelmed with delinquent accounts. Removing the strain of the collection process will free your organization to return focus to its business priorities, essentially getting the organization back to doing what it does best – serving its customers and patients. Collection agencies are uniquely positioned to do the specialized work required to resolve the delinquent debts that are spinning your organization’s wheels. Additionally there is very little risk involved. Outside of some of your organization’s time dedicated to shape the effort and work with the agency to receive your placements, your organization’s investment is quite small. Agencies will work by commission on each account meaning that if they don’t collect on the accounts they won’t receive any money and their fee will generally come out of the money they collect so there is no out-of-pocket cost to your organization!
3. Does this comply with regulations? Especially important for the Healthcare industry is making sure the agency is HIPAA compliant and adheres to FCRA, FDCPA and TCPA rules and regulations. While not all locations in the United States require collection agencies to be licensed or bonded, many do. So be sure your agency is licensed to collect in the cities and states where your customers and patients reside. Additionally an agency should exhibit good “ bedside manners” by treating them with dignity and respect – these are, after all, your customers and patients.
FCRA (The Fair Credit Reporting Act is federal legislation enacted to promote the accuracy, fairness and privacy of consumer infomration contained in the files of consumer reporting agencies.
FDCPA (The Fair Debt Collection Practices Act prohibits debt collection from using abusive, unfair, or deceptive practices to collect from consumers.)
TCPA (Telephone Consumer Protection Act of 1991 regulates and restricts the use of various technology in the process of collecting debts or marketing products.)
For more information please visit www.consumer.ftc.gov.
To view State Licensing restrictions for Collection Agencies please visit www.insidearm.com/state-licensing
Chief Executive Officer (CEO)
The CEO is the key executive and will likely have the most concerns regarding outsourcing. CEOs are accountable to stakeholders (such as the board of directors). Their focus will be on both long term progress and immediate results – each of which can be obtained between a backlog of accounts and what will become your monthly placements. They will focus on the big picture and may not be as sympathetic to change within a given department but rather how that change will affect the organization as a whole. This person may err on the side of caution and be somewhat averse to risk. For your goal of outsourcing collections this can be a dream come true because removing this responsibility from your organization is sure to increase revenue and minimize the organization’s risk and exposure.
The CEO is likely to ask the following questions:
QUESTIONS & ANSWERS
1. How will this impact the bottom line? Increasing the amount of revenue your organization is able to collect from its delinquent accounts is money in the bank! It costs the organization only a little in the way of time investment early on but after that there is very little work to be done and there are no out-of-pocket costs. It will allow your organization to refocus its billing efforts on its paying patients and customers and increase its customer service offerings without hiring additional staff. It’s a win-win for the whole organization and is any easy way to immediately increase revenue and profit which can then be used to help fund the C-Suite’s own growth projects.
2. How does this affect our risk and exposure? It should actually decrease your organization’s risk and exposure. Many of these points are covered in the CMO section but for the CEO you will want to illustrate that all risk associated with following the rules and regulations of debt collecting now fall on the shoulders of your chosen agency. With a secure transfer of information in place all risk is basically transferred from your organization to the agency. Your exposure to potential lawsuits and regulatory violations are greatly minimized.
3. What is "time to launch" and "time to value?" The best agencies should be able to start working with your staff immediately to get your placement file exported or your billing system integrated into their own system accurately and securely. They should then be able to start working your accounts in earnest (and according to the rules and regulations of the trade) within 30 days. Time to value can vary based on your industry but your organization should be seeing consistent value by the six month mark with a negotiated remittance schedule beginning as soon as 60-90 days.
4. What additional resources will be needed? Your organization’s billing department and database managers or information technology department will need to work with your chosen agency’s client services team to organize the process of placing your accounts and the monthly or weekly schedule of doing so moving forward. Once this is ironed out and passes the agency’s, as well as your own stress tests, there should be very little of your own resources needed to manage the flow of collections outside of selecting the right accounts to move over to the agency, monitoring their progress and reporting payments made directly (if you accept them). Ultimately the idea of hiring a third-party agency is to save your organization time while increasing its collection rate and limiting its exposure.
CHIEF Information OFFICER (CIO)
CIOs are in charge of the technology strategy for your organization. That means they find, connect and implement the tools and technologies that help to run your business. The CIO will want to evolve your organization’s infrastructure with the future in mind so it is important to demonstrate the technological prowess of the agency you choose. Integrating with the organization’s systems and information infrastructure in a reliable and secure manner is of chief concern to the CIO.
The CIO is likely to ask the following questions:
QUESTIONS & ANSWERS
1. How secure is the transfer of placement data? Any placement process should include bank-level encryption (256 bit) through an online login or SFTP pipe. Make sure you verify this with your sales representative.
2. How much of IT's time will you need? Your CIO will want to spend as little of their time and resources on this as possible. So be sure to find out exactly what your chosen agency will need from your organization. If your sales representative knows your billing system or understands your organization’s capabilities for exporting data they should be able to talk to their client services and IT departments to give you a very clear picture of how much of your organization’s time they will need in order to begin collecting your debts. Additionally, this time should only be needed leading up to the first placement and possibly right afterwards in order to iron out any remaining details or errors. Once the information is being sent and received without errors, the placement process should truly run itself. A great agency should require very little time from your information and technology teams.
3. Will it integrate with our current billing system? You should check with your database administrator or someone in the CIO’s department to first identify the billing system your organization currently uses and if that system is capable of generating a spreadsheet of your placements with contact information, notes, services rendered and payment history. Generally, a CSV (comma separated values) output file is ideal. Other times an agency might be able to directly interface with your billing system or be able to build this integration into their own database.
CHIEF Medical OFFICER (CMO)
While this role does not pertain to all businesses it is an important one for healthcare organizations. As a member of the C-Suite, the Chief Medical Officer helps to define the overall business strategy and direction of the organization including the overall clinical vision for the organization and provides clinical direction to all divisions. This person provides medical oversight that helps to ensure the delivery of affordable quality healthcare services and products.
*If your organization’s C-Suite does not include a Chief Medical Officer, many of these questions would pertain to another CMO, the Chief Marketing Officer, who, like the CMO, will be most concerned about the communication with and treatment of the organization’s patients or customers.
The CMO is likely to ask the following questions:
QUESTIONS & ANSWERS
1. How will our customers be contacted and affected in general? You should have a solid understanding of the agency’s procedures at this point and it is important to explain them to the CMO even though they may not always agree with the strategy. Your agency should not only follow all Federal, State and local regulations but should also use all available legal technology to assist in their efforts and this may include automated dialing technology, letter services and credit reporting. It is important to balance this with the human side of what the agency does as well. So you should include the agency’s tact and track record in this conversation. How many calls do they make in a year versus how many complaints they receive? How do they respond to consumer complaints online and via social media? What method do they use when contacting consumers? Are they pleasant? Are they helpful? Do they exhibit good “bedside manners?” Perhaps the agency can provide some audio examples of their work. All of these things can help sway the CMO onto your side. If you speak strictly in terms of technology you probably won’t get very far, but if you can illustrate the human factor that the agency will use with your customers and patients you may very well sway the CMO onto your side.
2. How will this change our process for customer feedback and complaints? Much of the negative feedback your organization receives from the billing side is probably from delinquent accounts. Once you pass along these accounts to a collection agency, those complaints and feedback will start dropping on their doorstep instead of yours. It should immediately reduce the time your organizations spends on dealing with them and of course reduces your organization’s overall exposure to receiving them.
3. What level customer service will an agency provide to our customers or patients and how is that communicated back to us? The agency should provide the highest level of customer service - first, by being available and, second, by helping your patients and customers address and resolve their debts with sufficient payment arrangements. It is the agency’s directive to be available to assist these consumers. Making sure they provide this level of communication is important to your CMO. Additionally the agency should have a process in place with your organization to handle any and all disputes as this is the right of all consumers and will inevitable come up. Your organization should have an open line of communication with the agency should any disputes or questions about services rendered present themselves.
4. How do our customers connect and communicate with this agency to pay their bills, see their account information and receive customer service? Your CMO will want your customers or patients to have transparency with your organization and the agency as well. As such, they will want to understand all ways that consumers have to communicate with the agency and pay their debts to the agency. An agency should be able to provide this to the consumer both online as well as via telephone during all times that a collection agency can contact consumers (generally 8am to 8pm). The agency should also offer Saturday hours for consumers to contact them. Any additional methods of communication (such as “chat” or online account logins) should also be illustrated to the CMO in detail as they will inevitably come up. Your organization should have an open line of communication with the agency should any disputes or questions about services rendered present themselves.
Three More Executives to Consider
CHIEF OPERATING OFFICER (COO)
- High-level corporate officer with responsibility for the daily operation of the company.
- The role can vary dramatically, depending on the style and needs of the organization but will generally have influence on all aspects of the organization's operations.
- See CEO and CFO.
Chief Technology Officer (CtO)
- High-level corporate officer responsible for the company's technology, reseach and development direction.
- The focus of this position is typically overseeing the development, use and transition of all technology used by the organization and its vendors.
- See CIO.
CHIEF Compliance OFFICER (COO)
- High-level corporate officer responsible for the company's compliance with all local, state and federal laws and regulations.
- The focus of this position is keeping the patients and customers of the organization safe from a variety of different internal influences.
- See CMO.
Encouraging the C-Suite to believe in the benefits of outsourcing your organization’s debt recovery needs to a third-party agency is the cornerstone of implementing your solution and should be a relatively easy quest once you understand each of the executive’s perspective, and, in turn, present the points that are most relevant to them. Each has their own unique viewpoint and emphasis within the organization. As a result, appealing to their individual perspectives and showing that you understand their concerns will go miles for you.
Remember to follow the tips for being a successful agent of change, mind the details that will define each executive's wants and needs throughout the process, and follow through with each executive to find your champion who will support you throughout the process.
Ultimately, remember to build the strongest case you can for each member and then demonstrate how this choice will be a positive ripple throughout the organization. At the end of the day the service should speak for itself. It is truly a matter of getting everyone comfortable with the idea and choosing the best agency to meet your recovery needs.