Statistics have it that hospitals actually collect only 30% of patients’ balances with some even collecting less than that.
If you are in charge of your hospital finances you need to know why this is happening and how to fix it.
Hospitals are single-handedly the most difficult to manage institutions in any economy because of their complex organization and the fact health professionals are not expected to be business oriented. Health care professionals in finance and general accounts personnel face various challenges in revenue cycle management and often have to outsource third party medical billing services to cater to their needs. Patient collections after insurance claims have been paid is especially tasking because of the poor strategies geared towards collecting the funds.
Possible Cause #1
One problem your hospital may be facing is the lack of the right accounts receivable representatives to manage the problem. These people are expected to follow up on all your accounts and find out the amount that has been paid, by which patients and the amount yet to be paid. If they slacken in their duties the hospital ends up losing a lot of cash because patients are definitely not going to pay their balances unless pushed a little to do so. Usually, hospital bills are the last thing people think about paying.
Solution: One way to get around this problem is to look for a responsible company that specializes in managing such accounts. The company should be able to keep track of all the finances received on such accounts and maintain proper records for all patients so that loses due to poor management are minimized.
Possible Cause #2
Third party medical billing companies are a great option for revenue cycle management but as it is they are best at managing insurance claims and demographics for hospitals. Once they have done this part they leave out the rest of the work to hospital staff who are probably inexperienced and do not have the time to go after patients with balances. This is where an excellent agency that specializes in A/R comes in. The agency takes up patient collections and ensures that every patient pays some amount if not all of their balance and this will definitely ensure even more than 30 % is collected. Even when the third party medical billing company insists on completing the entire cycle they would still need some level of assistance from outsourcing companies.
Solution: Consider sourcing your medical billing (insurance) claims to one company, and a second for the patient pay responsibility. Yes there will be two vendors to manage, but both should be experts in their respective fields.
Possible Cause #3
Another problem that could be a possible cause of the low patient collections is the lack of proper technology required for the task. The truth is more and more businesses and economic institutions are going digital and hospitals haven’t been left out in this. Your hospital will probably have software for handling finances but once again it will probably fall short of dialer platforms and collection software because third party medical billing companies won’t be interested in them because they are more concerned with insurance claims.
Solution: Outsourcing an A/R agency comes in handy once again because they will have the proper dialer platform needed to get in touch with as many patients as possible. They will also have the appropriate collection software that will make it easy for patients to remit their balances as well as follow up with the hospital on any accounts issues.
Possible Cause #4
There is one more potential problem that could be haunting your hospital and making it lose lots of cash in patient balances; multiple revenue cycles for some patients. This is a common scenario in hospitals because patients come in with different ailments at different times and these cycles could overlap. There is a high likely hood of mix ups and unaccounted for services when this happens so managing all such cycles especially the back end is no easy task.
Solution: One of the best ways to ensure that these aspects are well-accounted is by hiring specialists in the field. For an increase in revenue, patient accounting could hire such specialists internally. However to realize the increase in revenue AND a decrease in expenses, consideration should be given to A/R outsourcing.
Area of Expertise
Healthcare professionals are the best at delivering quality care.
No one knows how to medically treat patients better than healthcare professionals. They are trained in safeguarding a patients’ health and livelihood. However most of them have not been trained in accounting principles, accounting technologies, and revenue cycle management. It is important to maintain this kind of environment for them (experts in their own fields), so it is quite unfair for them to be asked to ensure patients have paid their bills. As a matter of fact, it is painful for any healthcare personnel to fail to treat patients because of bill payment issues, as it goes against everything they stand for. So if you are in charge of finances in your hospital, it is imperative for you work with your team and vendors to get patient pay collections above the 30% standard.
If you are interested in learning how much cash your organization may be leaving on the table, we'd love to help. Contact Us via the web, call us direct: (610) 840-8114, or download our free cost savings worksheet.