Managing your collections well is a complicated process. Many hospitals fail at collections because they don’t have the proper measures in place to succeed. But having a strategy to maximize collections for patients with different levels of financial security can be left by the wayside in favor of the many other fires that must constantly be put out while keeping a hospital up and running. However, knowing what most hospitals fail at when it comes to collections should help you avoid these things or pivot in the future.
So, what are the top reasons why hospitals fail at collections?
1. They don’t determine the amount owed to be paid at the time of service.
Maximizing the amount of money you get paid upfront is absolutely critical to minimize the number of accounts that go to collections and maximizing the amount of money you have in your bank accounts. Many hospitals don’t know exactly how much money each patient owes at the time of his or her service. This means that these patients automatically get sent bills after the fact and are more likely to eventually go to collections. However, if hospitals informed patients of how much they owed before, during, and at the time of service or treatment and discharge, they’d see a much higher recovery rate and enjoy more revenue up front that doesn’t even make it to collections. Being transparent and knowledgeable about pricing before it comes time to collect makes it easier to avoid funneling accounts to collections.
2. They take a one-size-fits-all approach.
Many hospitals don’t consider that their patients have unique financial situations they’re dealing with and, thus, differing abilities to pay their medical bills. However, not segmenting their patients and offering inflexible payment options and a one-size-fits-all collections approach instead will leave many patients feeling frustrated, overwhelmed, and confused with the collections process. This stress makes it less likely that patients will pay or pay while still thinking highly of the hospital.
3. They outsource to too many vendors.
Last but certainly not least, many hospitals don’t have a cohesive, organized approach to outsourcing their collections. They don’t have a strategy in place to make sure their outsourced collections agencies or vendors are following the same practices and procedures, organizing the data, and keeping track of the accounts in a way that makes sense for the hospital to look at from a holistic standpoint. Instead of outsourcing to 10+ agencies, consider scaling down to outsourcing 1-2 at most, if possible. And add more if you are too big to only work with this many. Centralizing how your collections process looks and how data is formatted will help you to maximize your recovery and keep track of all your accounts.
For more best practices and healthcare collections advice, contact Frost-Arnett at 1 (615) 326-6852. We have been collecting since 1893. It is our delight to help our healthcare clients maximize their recovery while enhancing their patient-provider experience.