Collecting money from people at a time when unemployment is reaching record highs feels really bad sometimes. Doubly so for people who cannot pay medical bills — bills they may have due to the global pandemic or other unforeseen health issues.
Unemployment could soon reach as high as 20 percent in the U.S. Most of those unemployed are not only without a job, but also without health insurance. While the federal government has stepped in with some financial assistance, they’re not going to cover all health expenses incurred during this time and that is going to present a huge hurdle for medical providers.
Some of the staggering statistics we’re hearing from Healthcare ARM Industry experts:
- -Hospitals are now writing off 9% of their AR as bad debt, but that’s expected to reach 45% after COVID-19 — the highest our team has ever seen.
- -The amount of charity hospitals give is typically around 6% of AR; that’s projected to be 30%.
- -Uninsured, or self-pay patients, accounted for 15% of AR before; post COVID-19 it is projected to be 19%.
Studies show healthcare providers typically have a 70 percent chance of collecting if they ask for payment at the time of service. They have a 30 percent chance to collect if they ask post-service. With telemedicine becoming the norm, it’s going to push more of those payment requests back, meaning hospitals and healthcare organizations are going to be waiting longer and getting paid less often. Telemedicine is also presenting challenges in the way we code and bill for these healthcare services; therefore costing providers additional expenses in resources to manage.
How to Collect in COVID Times
These challenges do not mean we should stop collecting payments…in fact, quite the opposite. It’s imperative to pursue patient payments in order to keep facilities up and running. The answer is new approaches to obtaining these payments. It means a careful evaluation of your Accounts Receivable Management (ARM) policy and what changes need to be made in order to meet these new challenges head-on, using the most cost-effective resources to do so.
A poster on FICO recommends we take a look back at 2008 and the lessons we learned at that time. Did your company make changes to its collection approach then? If so, can you return to those strategies in some instances?
Perhaps you didn’t make changes then, weren’t in business, or aren’t able to take a similar approach now. Here are some options to consider as you navigate forward:
- -First, look at your current expenses and determine if it makes sense to move A/R to a certified vendor for patient A/R recovery efforts.
- -If you choose an outside vendor, ask about their process. You’ll want to outsource to vendors that do more for your collection efforts with patients than send letters. Letters are not as effective as texts, emails, and calls.
- -Create a secure, online payment portal.
- -Create a policy on extended payment plans or settlement offers that make sense for the current financial situation.
- -Review your current charity program to make sure it’s up to date with today’s regulations and benchmarks.
- -Make sure you’re verifying eligibility and coverage with all patients prior to the appointment.
- -Keep credit cards or bank account information on file and have patients sign an agreement for recurring payment.
- -Your Coding Specialists may be less busy with most elective surgeries canceled. Ask those team members to work on quality assurance and denial projects that have been sitting around.
While this isn’t a comprehensive guide, we hope it helps you get started on making some changes to your ARM program. We’re all figuring out how to go forward from here, and it won’t be easy.
If you have questions about how CRC can assist you with your ARM needs during such times, we are happy to help. Contact us, and we can discuss a program that works best for your practice.