Health Care Reform May Restrict Hospitals’ Collection Outsourcing Activities
A proposal being discussed in financing options for health care reform would restrict when not-for-profit hospitals could enlist the help of outside collectors for recovery efforts.
Members of the Senate Finance Committee have been meeting all week to discuss policy options for financing health care reform ahead of a committee mark-up of comprehensive health care reform legislation expected in June. Included is a proposal that may delay how soon hospitals can outsource their receivables management activities and bad debt.
The proposal is meant to provide more free care and make not-for-profit hospitals more accountable for their tax-exempt status.
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Policy option papers submitted by Committee Chairman Max Baucus of Montana and Chuck Grassley of Iowa, the committee’s top ranking Republican, propose requiring not-for-profit hospitals to follow certain procedures before initiating collection actions against patients.
Details about the proposal aren’t likely to become available until a health care reform bill is released in June, a Baucus aide said. But ACA International Executive Committee Members Chris Wunder and Mark Neeb told insideARM that they are concerned federal lawmakers might make uninformed decisions about the accounts receivable hospitals outsource.
Not all receivables management work outsourced to collection agencies is bad debt related, they said, adding that collection agencies collect millions of patient payments in the hospitals’ name.
“If they restricted that type of work it would be silly,” said Wunder, past ACA president and president of medical ARM firm Receivables Outsourcing, Inc., (ROI) in Timonium, Md. “Hospitals don’t have the tools and staff to do that work.”
Neeb agreed, adding that collection agencies often contact patients before a bill is classified as bad debt to find out why the patient hasn’t paid their bill. Sometimes collection representatives learn patients haven’t paid because they are waiting for the insurer to settle a claim. In many cases, however, it’s because they don’t understand the bill, which agencies take time to explain, managing the process to preserve the relationship between the hospitals and patient.
“The patient base is served best by people who have the best expertise to run those processes,” said Neeb, president of The Affiliated Group, a collection agency based in Rochester, Minn.
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Comments
Comment from star on May 22, 2009 at 11:40AM EST
I would agree. It can be devastating...just another government intervention.
Comment from Anonymous on May 22, 2009 at 12:19PM EST
As if we didn't see this coming! As long as this administration is so union focused (read: more federal jobs here) and consumer empathetic, (read: It's not their fault, so they shouldn't be penalized) it will be next to impossible to overcome the media's portrayal of using professional collection agencies. Somehow, we have to get the point across that union employees who are guaranteed to get paid have no vested interested in collecting money for their employer. As a former government employee, I saw this firsthand. Collections are only effective when you have motivated professionals driving the process. If you think hospital budgets are tough now, they'll only get worse if you take collection agencies out of the equation!
Comment from anonymiss on May 23, 2009 at 3:30AM EST
Yes, you need to collect from those sick and injured folks who can't work and people on their death-bed as soon as possible.
Comment from Michael Klozotsky on May 27, 2009 at 10:18AM EST
Two of the comments here--one in particular--really put the cart before the horse.
First, the article clearly states that no actual details of the proposal are yet available, so to jump to conclusions like hospital budgets "will only get worse if you take collection agencies out of the equation" is both premature and inaccurate.
Even as loosely proposed, the plan doesn't eliminate collections outsourcing.
It also remains to be seen whether first party services conducted in the name of the creditor would be defined as "collection activities."
I suspect that this will not be the case, given that the implied goal of the measure is to make sure the right patient accounts get diverted to charity care buckets. First party services and RCM activities in many cases do just that.
And when they don't--or when hospitals don't pay enough attention to the front end of the revenue cycle, many of the accounts that flow into a bad debt stream prove difficult to recover anything from.
The ARM industry, while remaining vigilant to regulatory changes, would do well to pause a moment before jumping to "the sky is falling" type conclusions about reform efforts.
Comment from greensleeves on May 27, 2009 at 5:08PM EST
I think that most people outside the collections industry would think this is the right thing to do.