Generic Letters Cost Medical Debt Collectors Time and Money, Expert Says

Medical debt collectors who mail the same generic letter to self-pay patients regardless of their balance or ability to pay are costing themselves time and money and contributing to the aging of the receivables they are hired to recover, says a revenue cycle strategist.

Tina Eller, senior director of revenue cycle services for SearchAmerica, says letters to self-pay patients need to go further than making sure recipients understand what they are reading. These letters need to inform self-pay patients about their options for getting the bill paid with the help of insurance, a financing plan, government assistance or charity care program. Low income and charity care patients also should receive applications for any assistance programs they may qualify for, Eller said.

“Too many patients get the letter, and then start the process,” Eller said. “Why can’t it be started with the initial contact? [Collectors] should use this initial contact as an opportunity to educate the patient about their options, rather than just give them a bill.”

Eller said the additional information increases the likelihood that self-pay patients will respond to the letter. And including the information in contact letters limits the amount of time collectors spend on the telephone educating patients about their options.  The additional information also may help some self-pay patients decide what method they will use to settle the bill before the call.

“Now they’re proactive,” Eller said. “They’re informed and they’re not ignoring this bill because they don’t know what to do with it.”

First, however, collectors should categorize self-pay accounts according to demographics and the patient’s ability to pay.  Medical debt collectors can use automated software to segregate the accounts, a skip tracing solutions company to verify patients’ contact and demographic information, or the hospital’s own financial classification records, Eller said. 

The key is that insured patients should get a different letter than someone potentially eligible for charity care, she said.