Bad debt is on the rise according to a 2008 survey from Transunion. This survey reported that almost 80% of the hospitals responding indicated bad debt growth of between 6 and 20 percent in the past 20 months.
Other key survey findings include:
- Consumer Directed Healthcare Plans are a source of concern for hospital administrators. Almost 80% believe they will be a significant source of additional bad debt by the end of 2010.
- Hospital executives are spending a lot of time worrying about patient collection issues. Improving patient collections was the number one priority for over 40% of executives. Close to 20% have focusing on lowering bad debt as their top goal.
It is there therefore supremely important to collect well from the patients. Clinics and practices need every tool available (basic and advanced) to streamline what is otherwise a very labor-intensive task:
- Better use of on-line electronic payment tools. The latest tools can make it easy for you to accept practically any form of payment on-line and for patients to pay in a self-serve manner.
- Have more than one credit-card reader if you're processing a lot of patients at the same time. If possible, install a card reader with a built-in check scanner to convert a paper check into an electronic one, debiting the patient's account that much faster.
- Develop and rigorously follow a policy concerning patients that cannot pay co-pays (and other prearranged payments) on the day of service. Will you tell them they need to reschedule? Will you call and collect payments before they arrive? If you see patients that cannot pay on the day of service then make it easy for them to pay you after the fact. Do not wait for the claim to adjudicate to ask for them to send the co-pay. Give them a patient statement showing the co-pay balance due before they leave the office. Include a pre-addressed payment envelope.
- Use a tiered approach to patient collections and match the collection effort not with the patient balance but with the expected payment. Credit Cards use this technique through the use of credit score. They know that a $2,000 balance on a consumer with a credit score with 720 is worth more to them than a $3,000 balance on a consumer with a score of 600. You can use this approach by looking at patients past payment patterns, healthcare credit scores (there are services that provide these) and/or employment status.
- Use a monthly bonus system for employees that collect patient payments in the office. Make the amount meaningful and the metrics clear and easy to track.
The tips and techniques above can help protect you from the growing specter of bad debt.
Copyright 2008. Carl Mays II