Hospitals are seeing attrition in profits for the first time since 2008, due in large part to rapidly rising expenses. Not only are profits growing slower than expenses, the growth is less a result of an increase in patient volume, and more from higher payments from state provider fee programs and the federal meaningful-use incentive program. Of course those factors that helped to increase profits also contributed to a further increase in operating expenses.
If you talk to any hospital revenue cycle executive, they will tell you the extreme importance of having a strong relationship with an ethical and compliant collection vendor. After all, it is the money collected that keeps the hospital in business. However, medical collections have always been a little bit different than other debt collections. Most people do not plan to go to the hospital, they find themselves there unexpectedly. After the illness or injury that landed them there, they enter an extremely confusing world of EOBs, deductibles, co-pays, per diems, capitated rates, and many other terms they do not understand. It has always been important for hospitals to choose vendors who understand these dynamics. However, in the face of non-profit healthcare collection reform under 501(r), it is even more important for hospitals to make sure their collection vendors are set up to comply with the new regulations.