All healthcare organizations are seeing growth in their accounts receivables as a result of rising patient responsibility. Yet, many organizations continue to manage their growing receivables in the same way: adhering to a standard revenue cycle process without making adjustments to accommodate for the higher amounts. Receivables are an asset that should not be left to collect dust in a revenue cycle, but rather should be managed in a way that promotes the highest possible recovery.
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.
It’s no secret that the healthcare reform is changing the way medical providers operate. Patient responsibility is higher than ever, and consumers are having a difficult time understanding their new policies. This leads to higher patient balances, which often go unpaid. In addition, with co-pays, deductibles and co-insurances on the rise, patients are beginning to shop around for care. In order to compete, the emphasis in medical practices must shift from volume to value.
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.
Healthcare organizations are continuously working on reducing bad debt by adopting new technologies. Medical revenue cycle management has improved as providers move towards automated payment options and the outsourcing of other processes; however, many healthcare facilities still have limited options when it comes to how patients can pay their medical bills.