How to prevent bad debt from damaging your medical practice

Almost half of hospitals senior executives responding to a recent Transunion survey reported a marked (between 6 and 10 percent) growth in bad debt over the past 18 months. Over 25% realized between 11 and 20 percent growth in this key metric.

Additional important information in the survey included:

- Nearly 79 percent of respondents said they are concerned that Consumer Directed Healthcare Plans will increase their bad debt within the next two years.

- Hospital executives are spending a lot of time worrying about patient collection issues. Improving patient collections was the number one priority for over 40% of executives. Close to 20% have focusing on lowering bad debt as their top goal.

Given the current economic times and the trend outlined in the survey, it is critical to excel at patient collections. It is critical to use ll of the tips, tricks and tools available to improve patient collections. Without the latest (and proven) approaches it is easy to spend a lot of resources without much result in patient collections:

- Better use of on-line electronic payment tools. The latest tools can make it easy for you to accept practically any form of payment on-line and for patients to pay in a self-serve manner.

- Never miss a patient payment because you have a credit card reader break. Also, do not allow credit card processing to create a backlog at check-in or check-out. Install a second credit card reader. In addition, use one that includes the ability to take a regular check and instantly deposit the funds into your account.

- Establish a consistent policy on whether you’ll reschedule these patients or let them see the doctor and mail in their money later. If you choose the latter route, make it easy for patients to remember their responsibility. Hand them a self-addressed envelope marked “COPAY-URGENT”.

- Tailor your follow-up based on the credit status of each patient. Your three basic categories could be: (1) insured, employed patients with a record of timely payments; (2) insured, employed patients with a spotty history; and (3) uninsured or underinsured patients. You might want to dispense with follow-up calls altogether for the underinsured or uninsured, but as part of your collection policy, you might help them sign up for Medicaid or charity resources from the get-go.

- Use a monthly bonus system for employees that collect patient payments in the office. Make the amount meaningful and the metrics clear and easy to track.

The tips and techniques above can help protect you from the growing specter of bad debt.

Copyright 2008. Carl Mays II

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