Is your team struggling with healthcare receivables? This free downloadable report from insideARM.com helps you improve returns on healthcare receivables.
The U.S. healthcare receivables industry is enormous, representing one in every six dollars spent in this country, or roughly $2 trillion, in 2005. The aging of the population and other macroeconomic trends suggest that this industry will grow moderately for the foreseeable future. Part of this growth has heightened an industry problem: more bad medical debt. Healthcare providers in the United States set aside $129 billion annually to cover bad medical debt, amounting to roughly 7 percent of the industry’s revenues – and more than double the industry’s average net profits of 3 percent. As bad debt has caused profitability to wane, healthcare providers have partnered more with companies that specialize in the collection of delinquent medical receivables.
1. Acknowledge the impact of self-pay patients
The U.S. Census reports that 46.6 million citizens, or 16% of the population, had no health insurance in 2005, an all-time high. With fewer employers providing health coverage for employees, the incidence of uninsured patients has grown even with unemployment near alltime lows. Uninsured patients place financial strain on healthcare providers in obvious ways, particularly when they arrive through emergency rooms, which are required by law to treat all patients regardless of their ability to pay. Employees covered by insurance may also have increased co-pays, further placing the burden of healthcare costs on the consumer. The impact of these trends on healthcare providers has been formidable, forcing these companies to place more emphasis on the recovery of outstanding debts, both early in the revenue cycle and later as receivables management in order to maintain profitability.
2. Start early.
Many healthcare receivables are caused by patients who use hospital emergency rooms as their primary destination for medical care. These individuals are likely to be uninsured or underinsured, placing strain on the operational and financial resources of the hospitals and physicians that provide them care. Recovery efforts succeed most when efforts begin early in the revenue cycle, both by healthcare providers and their service providers, sometimes before a patient even arrives at a medical facility. In fact, the healthcare companies that manage receivables most effectively mitigate the severity of bad debt towards the end of the revenue cycle by maximizing the effectiveness of front-end procedures such as patient admittance, charity care classification, and insurance approval. As a result, receivables management companies are frequently asked to provide revenue cycle management, first party collection, insurance processing, and other related services that would not typically be offered by companies in other sectors of the ARM industry.
3. Use different services for different purposes
Healthcare providers have intensified their use of receivables management companies for a variety of purposes. First party or early stage collections takes place under a healthcare provider’s name, either by the creditor itself or by receivables management companies working under its brand. Contingency collections take place as a third party service provided by receivables management companies to healthcare companies seeking to monetize delinquent or charged-off accounts. Healthcare providers also sell portfolios of delinquent receivables to debt
Those are just three of the eleven tips to improve your healthcare receivables returns. Download the paper and learn more:
- Learn how new competitors in medical receivables have utilized pricing to gain marketshare.
- Find out how the average contingency fee for primary placements of medical debt has decreased.
- Discover how healthcare executives are reacting to the behavior of the medical receivables management industry.
If you’re working healthcare receivables accounts and you’re not getting the returns you think you should be, then download this free report and check your strategies against our list. Odds are you might be missing something – we’ve got you covered.
Download the report and get the list, then take action to improve your returns.