Medical debt collection has become increasingly difficult. Medical practices have consolidated and struggle with compliance issues. Health insurance changes, due to both the Affordable Care Act and the insurance industry market conditions, do not help matters.
My area of interest is working with smaller medical practices to help them recover bad debt. Smaller offices, with fewer staff, are less likely to have defined roles. Patient care obviously comes first, followed by medical billing and compliance, and bad debt recovery often falls by the wayside. Some practices do not pursue non-paying customers as a preference, others do not have the time or the inclination to do so.
One of the myths of medical debt collection is that sending a patient to a collection agency will give the patient incentive to sue for malpractice. While this could happen, I have never seen it, and I have been collecting medical bad debt for a dozen years. Of course, if a patient has mentioned a problem or threatened a lawsuit, that patient is one whose file should not be referred for outside collection.
There are certainly patients who do not pay their bills because they do not have the money. Increased cost sharing by way of larger deductibles and higher co-pays and coinsurance have put a squeeze on everyone. In my experience, however, even more patients do not pay their bills due to a breakdown of communication regarding office procedures and policies, and a lack understanding of their insurance coverages. Therefore, success in medical debt collection is very much dependent on how well you communicate with your patients, from the very first contact.
Here are some simple things you can do to help recover from non-paying patients:
1. Gather as much information as you can from patients, hopefully before you see them for the first visit. New patient forms should be on your website. Ask patients to complete and return them to you before the first visit. Some will, many won’t but at least you will be on the right path.
2. New patient forms must advise your policies on missed appointments and bad checks.
3. Do everything you can to obtain insurance information before the first visit. Confirm coverage with the insurer. Review coverage terms and conditions with the patient, and ask them to acknowledge same.
4. Every new patient must sign a form to acknowledge that they are responsible for any sums not covered by insurance. Every.single.one. No exceptions! This is especially important for patients without insurance, or for procedures that may or may not be covered by insurance.
5. Are you “out of network” with certain insurers? If you are, insurance payments may be sent directly to the patient. All patients with out of network or “non-par” insurance must be asked to acknowledge in writing, that they understand that they will be receive the payment and that it must be forwarded to you within 30 days. You may decide to accept whatever non-insurers pay, but patients should know that you reserve the right to balance bill them if they do not remit the insurance company payments promptly.
6. Document all patient payment plans in writing.
7. Review your receivables monthly. Send a gentle but firm collection letter to delinquent patients.
8. Review delinquent accounts monthly. Set the limit of time you are willing to wait to get paid. (We recommend 90 days after insurance billing).
9. Hire a collection agency that has experience with a practice like yours.
Medical debt collection does not have to be confrontational. Communication with your patients will not only get payments in sooner, but will make your patients feel better about their overall experience with your office.