Four Ways to Prevent Accounts from Moving to Collections

As a healthcare provider you should be doing everything in your power to prevent accounts from reaching collections. Turning over a patient’s bill to a collection agency, while a necessary step for many accounts, should be viewed as a last resort.

There will still be plenty of work for your collection partners well into the future. But you have a responsibility to your organization to keep accounts sent to collections at a minimum. Below are four ways you can prevent accounts from moving to collections, although all can be distilled into one overarching tactic: Collect as much as you can up front.

Collecting a bill earlier in the patient treatment lifecycle obviously means it won’t have to be collected at the back end. And as all revenue cycle professionals know, the odds of collecting on any debt grow worse the longer the debt remains unpaid. But what every healthcare provider is either coming to realize or will soon realize, the number of patients who will avoid their financial obligation is growing, and growing exponentially. Many healthcare providers are reporting that of their patients who have insurance–not self pays, but those with commercial insurance–more than 50 percent are not paying their financial responsibility. This is the result of higher deductibles and co-insurance as employers look to reduce healthcare costs by shifting responsibility for healthcare onto their employees.

What follows are four trends that healthcare providers across the nation are employing to head off their accounts receivable from heading to collections:

Make every patient touchpoint a collection opportunity. Throughout the patient treatment cycle there are touchpoints, those moments where there is human interaction between provider and patient. Those touchpoints should always include an opportunity to collect, or at the very least, a meaningful exchange with the patient about his or her financial obligations. At scheduling, day-of-service, post-service follow-up, all are opportunities where patients should be made aware of what they owe or will owe, and your staff should have th ability to collect from them.

Expand your transaction capability. In many organizations, even in this digital world, there is limited capability to swipe a patient’s credit card. This is not to suggest that nurses should walk around with card readers attached to their phones, but the ability to take a payment from a patient should be no more than five minutes away. Many hospitals have installed credit card readers in every department, and have seen double-digit increases in point-of-service collections.

Implement a web portal where patients can pay bills 24/7. This technology has now matured so that it is easy for patients to use and more importantly, it is where a good percentage of your population is now conducting most of its business. Paying bills online has become the norm, and if you don’t make this option available to your patients, you have created a choke-point where patients actually may prevent patients from paying for their healthcare services.

Implement a successful “early-out” program. Many healthcare organizations are utilizing this “pre-collection” technique to help increase the amount of self-pay payments prior to being written off and sent to collection agencies. A successful early-out program focuses mainly on reaching out to those patients that have patient responsibilities in a customer service friendly manner, and helping with payment arrangements and establishing a good working relationship prior to going to the collection stage. A good organization like DECA Financial Services, can lower your internal costs of phone calls and letters that are being spent in the self-pay arena, as well as help you focus on where your expertise are – billing insurance. A solid early-out vendor also knows how best to contact and locate your self-pay patients and will maximize your returns all for a lower fee than traditional third-party collection agencies.

Implementing any of these four steps is far easier to say than to do, for each represents a significant change in workflows for your staff as well as expands the responsibility of collecting revenue within the organization. The “what” is easy to define, but the “how” of it will be implemented will require tremendous effort and cooperation within your provider organization. However the days when these options could be considered “nice-to-have” are long gone; the very survival of healthcare depends on every stakeholder in the patient treatment lifecycle–revenue cycle departments, clinical staff, physicians, and patients–to be knowledgeable and aware of their respective financial responsibility.

John Owen is the Director of Client Development at DECA Financial Services in Fishers, Indiana. Check out other great content in the DECA Blog–Bottom Line Results Matter–on insidePatientFinance.com.