In part one of our three-part series on improving patient collections, we talked about the increase in patients as providers’ largest “payer,” especially with the proliferation of high deductible health plans (HDHPs). As well, we offered ways to make bill paying easy for patients, since as the Consumer Financial Protection Bureau’s Report “Consumer Experiences with Debt Collection: Findings from the CFPB’s Survey of Consumer Views on Debt” found, 31% of healthcare consumers did not find bills simple to pay; 42% found medical bills unaffordable, and 47% did not understand cost beforehand.
In part two, we’ll discuss ways to improve your patient receivable by collecting payments at the earliest point possible in the revenue cycle.
Point of Service Collections
A 2015 survey by Availity called The Impact of Consumerism on Provider Revenues revealed that physician practices were able to collect the full amount requested during point-of-service collection efforts from 56% of patients. That same survey showed that in 2017, physician practices expect to use point of service efforts to collect at least partial payment from 44% of patients.
Train your staff to have collections on their mind at the earliest points of contact, such as paying past-due balances when scheduling appointments or paying copays and known coinsurances when checking in for a visit.
Timely Statements
When collecting copays or co-insurance at the point of service is not possible, ensure patients receive statements as close to the date of service as possible through regular and frequent statement cycles, including eStatements. According to accounting firm Abo and Co., the earlier invoices are paid, the more fully they’re paid. For instance, the average recovery rate for a 30-day-old invoice is 97%, while recovery on a year-old debt drops to 47%.
“Issue invoices as soon as feasible, preferably coincident to the providing of the service or sale of product,” Abo and Co. recommend. “Delaying can lengthen the payment period.”
Collection Letters
Consider sending a pre-collection letter for balances that aren’t paid in two statement cycles. According to Abo and Co., accounts that are 90 days old still have a 90% chance of being paid, but clearly your normal statements are not creating the intended effect.
According to Robert C. Scroggins, in his 2014 Modern Medicine article “Collecting patient bills: When to use a collections agency,” an official-looking letter might get noticed when statements otherwise aren’t. Also, sending letters on practice letterhead but from a party other than the physician—like an office manager—might help deflect some negativity away from the patient-provider relationship.
Finally, Scroggins recommends enlisting the help of a third party to send the letters, as “they will be looking for a list of delinquent accounts monthly. When handled by internal staff, separate pre-collection letters become a low priority behind charge entry, payment posting, routine insurance follow up and monthly statements.”
Placement with a Collection Agency
At some point in the revenue cycle, the billing office’s attempts at collecting patient payments are no longer justified. That does not mean, however, that the past-due balance won’t be collected. Even delinquent accounts up to 180 days old still have as much as a 67% chance of being collected. And collection agencies often have methods for reaching patients, like GLA’s Collector Activity approach, that medical practices and billing companies do not have at their disposal.
In Part 3, we’ll wrap up our series by talking about the importance of not wasting time in trying to collect payments from the wrong party or at the wrong address.