In the healthcare revenue cycle, during the patient collections stage, there are two patient collection strategies: soft collections and hard collections.
Understanding, and using, both methods not only create a holistic, complete patient billing process, it can lead to optimal cash flow and customer service.
What are Soft Collections?
Soft Collections, occurs before the “bad debt” or hard collections phase. It can be referred to as first party collections, early-out collections, or extended business office services when provided by a vendor.
Soft collections involve collecting the medical bill from the patient before it is delinquent, typically 1-180 days after the patient financial responsibility has been determined. Communication methods enhance the typical 3-4 mailed statement workflow utilized by most healthcare providers. The earlier and more varied the communication methods, the more likely a patient will make payment arrangements.
Most internal providers use phone calls as their method of communicating beyond the statements. Some providers used vendor enhanced technology, like emails, to increase their methods and collectability.
The most complete soft collections process is provided by choosing a full-service vendor specializing in patient collections. These vendors can provide phone calls from call center staff AND enhanced communication technology, bringing the greatest cash flow with less overhead and resources for the healthcare entity. For example, technology-driven soft collection services may include emails, text messages, voicemail drops, online payment portals, and more! Soft collection services generally include “white labeled” communication, where the vendor provides services as an extended business office (“This is Jane from your doctor’s office”) which can further rapport and patient relations.
What are Hard Collections?
Typically referred to as the Bad Debt stage, hard collections involve outsourcing significant past dues, typically 150-180 days past the due date, to a third-party debt collection agency. Debt collection agencies, overseen by federal (see Fair Debt Collection Practices Act | Federal Trade Commission (ftc.gov) and Consumer Financial Protection Bureau (consumerfinance.gov)) and state regulations communicate through letter, phone calls, and other communication methods. Debt Collection agencies and collection attorneys can use escalatory measures, including credit bureau reporting and legal action, to collect payments.
One distinguishing factor in debt collection, or hard collections, is the communication must be disclosed as a third-party agency, sharing with the consumer or patient they are a collection agency communicating for the purpose of collecting a debt.
Learn if a medical collection agency is right for you at When to Utilize a Medical Collection Agency in Healthcare Offices | Beyond Green Solutions.
Does Hard Collections have to be “hard?”
Debt collections has a history and reputation as being harsh, and many small-to-midsize practices avoid their services at the expense of having higher uncollected patient past dues.
But not all collection agencies use harsh methods. New regulations are preventing medical bills from being reported to credit bureaus (How Does Medical Debt Affect Your Credit Score? – Experian) and innovative agencies are using more customer service friendly methods (Successful Debt Collection: How Nurses Improve Results Through Ethics and Empathy | Beyond Green Solutions).
Full-Service Process for Patient Collections
Looking for the best of both worlds? Choosing a revenue cycle management vendor who can provide the technology of hard collections, with the customer service of soft collections, as well as both phases of the patient stage, can create the optimal process, cash flow, and ease of vendor management. Sometimes referred to as Full-Service Collections, these agencies provide patient communication and payment communication from as early as Day 1 to months or years past due.
Learn more about Beyond Green Solutions Full-Service Collections at Full-Service Collections | Beyond Green Solutions.
