Large hospital systems rely on collection agencies to ensure their receivables are recovered and their revenue cycle is complete. But should other health and wellness businesses use collections? Will using collections have a positive impact on the bottom line without a negative impact on the public relations side?
The best way to determine if you need help from a debt collection agency is to review your revenue cycle process and the cash flow it brings in. Let’s focus on the patient financial responsibility steps that impact patient collections and ways to improve or seek assistance.
Patient Statements, Payments, & Enhanced Communication
After health insurance billing is completed, your office determines the patient’s financial responsibility. Typically, 3 monthly statements are sent to the patient, followed by a last attempt communication.
When should you reach out for assistance with patient statements, payments, or enhanced communication?
- When your statements are not sent timely, are your statements going out monthly? Are all 4 statements being sent? Consider a letter vendor if statements aren’t timely or the cost of internal staff completing is prohibitive.
- Do you have multiple payment options? Are patients able to make electronic payments? Is the only way to pay via credit card by having your staff input the information manually? A payment portal can increase your payments and give your staff back time and efficiency!
- Are you communicating beyond mailed statements? Are your staff who are calling to collect effective (i.e. collecting more than the overhead cost)? If not, consider using an early-out (pre-collect) collection agency to communicate to patients on your behalf; this can increase cash flow and decrease days to collect.
Beyond Green Solutions Full-Service Collections includes pre-collect communications and branded payment portals. Learn more here!
Sending Patients to Bad-Debt
It’s been 3 to 6 months since you first made the patient aware of their balance. You have sent 4 letters. Maybe you have made a few phone calls, with promises to pay that have not been sent in by the patient. Should you send these accounts to a collection agency?
If you are an office proclaiming, “We do all of our collections in-house,” it’s time to see if this is the best return on investment. Is your team trained in asking patients for payments? Are they consistently making attempts? Are they interested and satisfied with this job responsibility? You may be spending more money to recover the balance than staff are recovering!
Collection agencies usually work on commission only. They likely will recover more delinquent accounts for the following reasons:
- Their focus is purely on past dues. Your staff likely has other responsibilities; examples include scheduling appointments, follow-up calls, prior authorization, submitting insurance payor claims, and following up on denials.
- Their training focuses on consumer conversations. A major training focus in collection agencies is phone etiquette and consumer relations.
- They spend more hours perfecting their consumer skills. Your staff may spend only a few hours per week calling for past-due accounts. Collection specialists reach out via phone for the majority of their day.
- Collection agencies are skilled in negotiation, have payment plan tools, and understand options for escalation beyond collections (legal). They also tend to have advanced technology to communicate with consumers (texts, emails).
Collections is a great tool and partnership to ensure communication with your past due patients continues. They will likely provide a better recovery rate due to their focus and tools and will be cheaper than internal staff due to their commission-only pricing model.
In short, all healthcare offices with past-due patient balances should explore collection agency partnerships!
Choosing the Right Debt Collection Agency
Choosing the right Debt Collection Agency is more than just effectiveness. You need a partner who will provide assistance without creating new problems. Looking for the right collection agency? Learn more at How to Hire a Collection Agency – 5 Things to Look For | Beyond Green Solutions
