It may seem like making a commitment to caring for patients is fundamentally at odds with hiring an agency to collect money from them, but that could not be further from the truth. While your medical practice is in the business of providing care, it is still a business, and needs to be profitable in order to continue to provide the highest quality care for your patients. Without a consistent cash flow, you would not be able to hire the best doctors, purchase top-of-the-line equipment, or maintain your facilities.
A debt collection program, whether it is in-house or outsourced to a third party, is a natural extension of your revenue cycle. The problem with hiring an agency for many is that the debt collection industry overall has a pretty bad rap. While there are some unscrupulous agencies in the market that rely on harassing and abusive tactics to collect, most agencies can be relied upon to strictly adhere to the various protective laws surrounding the collection of debt. The best agencies will not only follow these laws, but will also train their representatives in the laws and practices of your industry, and will treat your patients with the dignity and respect that they deserve, and that they have come to expect from you.
When should you consider hiring an agency?
You have a feeling that your revenue cycle might be in trouble, but aren’t sure that it is the right time to have that conversation with your board or providers. Here are a few indicators that you should consider hiring a third-party agency:
- New patients do not respond to your first attempt to collect a debt | Are you sending multiple statements to many of your new patients? When you have no transaction history with a new patient there is a greater chance that they will not pay, or maybe never intended to.
- Existing patients have a history of late payments | Consistently late payments may be the result of billing confusion, inability to pay, or financial irresponsibility. A well-trained collector will be able to get to the root of the issue quickly and secure at least partial payments more often.
- Trouble maintaining payment arrangements | Patients who still will not pay even after you have met them half way with a payment arrangement are unlikely to change their behavior without the intervention of an agency.
- Patients object to their balance or make excuses for why they should not have to pay | When a patient denies responsibility it is unlikely that you will recover the debt without the assistance of an agency.
Getting your providers on board
Do the above examples sound a little too familiar? It may be time to hire an agency. Hiring a debt collection agency is a business decision, and will require buy-in from your board members or the providers within your practice, which is sometimes harder than collecting money from patients. We’ve compiled a few reasons why hiring an agency is the right choice for your healthcare organization to help you make your case.
Let’s face it, the number one reason to hire an agency is to improve revenue and recover more of your past due balances. Your billing department spends a significant amount of time and money sending statements to patients, and often does not see a return. Paper statements are often insufficient, and an agency can take the time to call your patients to discuss their past due balances, get to the bottom of their objections and excuses with proven tactics and strategies, and recover more for you.
Yes, there is a cost to hire an agency; however that cost pales in comparison to what your practice will spend to pay in-house staff to do the same work. Time is money, and in an industry where understaffing is rampant and you are increasingly getting reimbursed for providing an exceptional patient experience, your staff is better utilized doing what they do best: providing high quality care and an engaging experience for your patients.
Tools of the Trade
It is not only having more time to make calls that make the best performing agencies so successful. Select agencies have access to tools that help them to recover more. Account scoring is integral in determining which accounts to contact first, ensuring that those patients who have the ability to pay are contacted first, and valuable time is not spent on attempting from those patients who do not.
State of the art IVR technology is also available, which allows calls to be routed to the appropriate representative so that your patients have a seamless experience every time, calls can be made quickly, and all calls are guaranteed to be compliance under the myriad rules and regulations in both the debt collection and healthcare industries.
There are many more tools available to the top performing collection agencies, but perhaps one of the most important tools is the ability to credit report to all three national reporting agencies. With so many new regulations being put in place surrounding credit reporting, especially of medical debt, many agencies are choosing to cease reporting. Those agencies that remain on top of the changing regulations and can ensure compliance still have access this incredible successful tool. Is credit reporting right for your practice? Find out.
Partners, Not Vendors
The best performing agencies are not just vendors; they are a key resource not only to your practice, but also to your patients. A great partner can help to identify issues within your revenue cycle and work with you on solutions to fix them. Your agency should be able to provide you with the resources and training you need to be as successful as possible in-house, and then act as an extension of your practice to improve your recovery while still maintaining the important relationship that you have created with your patients.
Once your practice makes the decision to partner with a third-party debt collection agency, make sure you choose the right one. Check our our guide on How to Choose a Collection Agency for a list of guidelines to help you research the best partner for your organization.
AR Logix, Inc. is a full-service medical revenue cycle management solutions provider located in Reading, Pennsylvania. We pride ourselves in offering the most effective and complete services for our clients and their patients. Once accounts are placed with AR Logix, our clients can rest assured that they will see a higher liquidation of revenue without having to worry about the integrity of their accounts.
AR Logix is part of the RMP family. Receivables Management Partners (RMP) is a financial services firm that enables leading healthcare providers to focus on patients instead of payments. Known for its innovative culture and compassionate approach to collections, RMP has grown to over 520 people in nine offices across the U.S. The company proudly serves over 200 hospitals and roughly 30,000 physicians nationwide. For more information visit ReceiveMoreRMP.com.
Written by Ali Bechtel, Digital Marketing Manager
This information is not intended to be legal advice and may not be used as legal advice. Legal advice must be tailored to the specific circumstances of each case. Every effort has been made to assure this information is up-to-date as of the date of publication. It is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel.