It's a well-known fact that patient debt is often uncollectible in the healthcare industry. For every dollar billed to a patient, only 35 cents is ever collected. Just a few years ago, this wasn't a huge concern because insurance companies typically paid the vast majority of medical bills - roughly 90 percent. The remaining 10 percent may or may not be collected from patients, while the rest was simply written off or sent to collections.
Now that more and more people are switching to high-deductible insurance plans, the patient's portion is a greater concern. If a patient owes 10 percent of a $1,000 bill, it's not particularly harmful if the $100 is written off. When the patient is responsible for 30 percent (or more), the uncollected portion is much more significant.
Unfortunately, it's been proven time and time again that traditional collection practices simply don't work. Most healthcare organizations collect a copay at the time of treatment, then send a bill for the remainder. These bills are usually disregarded, misplaced or forgotten, so the office follows up with a phone call, which is usually ignored. These process continues until the past due account is referred to collections or simply discharged. The patient is unhappy because their credit is adversely affected, and the doctor or hospital loses much-needed income.
So, how can healthcare companies collect more effectively? Here are the newer, more efficient guidelines that should help:
Paper bills and follow-up phone calls are notoriously ineffective. Quite simply, they're a waste of time and resources. When given the option, most patients prefer electronic billing to paper billing. Due to ever-present caller ID and the rising number of telephone scammers, many people don't even answer phone calls from numbers they don't recognize. Instead, front desk employees should ask a patient for permission to bill electronically.
Unfortunately, billing problems sometimes arise due to disorganized finances or accounting practices on the business end. Sometimes legitimate charges fall through the cracks because they were never billed or billing practices weren't followed up. If the accounting process isn't in order, this should be remedied ASAP. Otherwise, the company is open to numerous problems, including missed income and angry customers who were billed incorrectly or late.
Communication is key when it comes to collections. Even more important, though, is the type of communication. Patients will likely balk at brusque, matter-of-fact attempts to collect a debt. When a doctor or hospital expresses concern and a friendly demeanor, collection efforts are typically more successful. As a bonus, the customer's loyalty may increase.
Technology is essential for almost every industry in today's world, and healthcare is no exception. The latest technologies can make collection practices much more efficient. Most patients are practically attached to their smartphones, so mobile billing is always a great idea. Text messages and emails are the best replacements for paper bills and phone calls; patients are much more likely to respond to this type of communication, and it's convenient for the company as well.
Patients are much more likely to pay an outstanding bill when it's easy for them to do so. Finding a checkbook, writing a check, filling out an address and purchasing a stamp are all barriers that prevent timely payments. Instead, healthcare companies should consider using electronic options, making the payment process as easy for patients as possible.
Sometimes patients aren't paying their bills because they don't have the money for the entire bill at once. This is especially true for large bills, but even smaller ones can be a huge dent in a tight budget. That's why a payment plan option is often quite effectual for collections. If a customer has a $500 bill that they can't pay all at once, they may simply ignore it completely. When offered a payment plan of $50 per month, the bill suddenly doesn't seem so huge. While it may take 10 months to pay the bill completely, that's much better than the alternative of no payment at all.
That leads to the next point: collections. Whenever possible, it's best to avoid collections entirely. Collections companies typically have shady practices that leave customers upset or angry, losing their loyalty to that particular doctor or hospital forever. In addition, the collection company usually charges a significant fee for their work. Worst of all, even the best collections companies only boast a 25 percent success rate. The average collection company has much lower success rates, with some as little as five percent. That means 75 to 95 percent (or more) of the debt is lost.
All of these collection practices together may seem daunting. If handled manually, the time and financial investment would be significant. However, automated technology simplifies the entire process, greatly reducing the manpower and budget necessary to produce great results.
With Enter's Intelligent Billing software, healthcare companies can streamline their entire collection process. Customers receive automated text reminders that are friendly and compassionate. From there, a simple click links them to a payment portal, and credit card information can even be saved to simplify future payments. Thanks to this automated mobile billing, quick payment process and payment plan options, business revenue increases and customers are content with no collection company interference.
Don't be fooled - there is little benefit these days from your EMR's "streamlined billing module" for your in-house or outsourced teams.