NPR Explores Recent Changes in Medical Debt Collection Practices

On its AM drive-time program “Morning Edition” Friday, National Public Radio ran a segment that delved into the world of medical accounts receivable management and the rising tide of bad debt at hospitals. The piece also revealed some interesting recent changes in debt collection practices.

The segment, titled “With Medical Debt Rising, Some Doctors Push For Payment Upfront,” examines the issues healthcare providers are facing with increasing co-pays and deductibles leading to rising bad debt balances. Increasingly, even patients with full coverage are left owing sizable amounts directly to providers after compensation from insurers.

Between 2008 and 2012, medical practices saw their bad debt go up 14 percent, according to a survey by the Medical Group Management Association (MGMA), a trade organization for doctor practices. Many practices are now shifting their billing and collection strategies to deal with the rise.

One such example is the time doctors wait to engage with third party collection agencies.

Ken Hertz, a principal consultant with the MGMA, noted that the traditional standard was to wait 180 days before sending accounts to a collection agency. But he noted that many patients would be completely healed by that time and didn’t have a sense of urgency to resolve the debt.

Hertz is now advising practices to send accounts to collection after only six to eight weeks.

The piece also explored the recent practice of upfront collections in hospitals, getting payment for the patient’s share of a procedure before it takes place.

At one practice, patients will be offered an even faster payment option. In the waiting room, they’ll be handed a tablet computer that’s attached to a device that takes credit cards and be given the option to store their payment information for future bills. The upfront payment model is working well for the that medical practice; bad debt has gone down by 25 percent over the past two years.

Listen to the piece here.