Reducing Patient Debt (Part 1)
Bad Debt Should Be Under 3% Of Your Net Patient Revenue
From the Hospitals' Perspective
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Since 2000, hospitals have provided $620 billion dollars in uncompensated care.
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Uncompensated care increased over 8% from $10.8 billion in 2017 to $11.7 billion in 2018.
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68% of hospitals with less than 50 beds attributed their organization’s bad debt to one or more of the following:
• Higher patient co-pays and deductibles
• Ineffective RC management processes
• Industry-wide RC management complexities & regulations
• Changes in reimbursement models
• High poverty rate
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Medicare bad debt increased 17% between 2012 and 2016. Yet only 17% of all responding hospitals were ready to blame patient non-payment for their bad debt.
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And...1% to 5% of self-pay accounts that are written off as bad debt actually have billable insurance coverage.
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Follow up with patients by phone early and often. Speaking directly with patients to discuss their balance is far more effective than mailing statements. These follow-up calls and patient outreach might require using additional internal resources or outsourcing.
From the Patients' Perspective
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Most patients say they actually want to pay their out-of-pocket charges.
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81% of patients report some frustration with their medical bills due to:
• Complicated bills that are not understood
• Lack of transparency...unexpected charges
• No financially viable payback program
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Between 2012 and 2017, the average financial obligation after insurance for commercially insured patients increased 67% from $467 to $781.
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In the same period, Medicare beneficiaries’ average balances owed increased 118%, from $144 to $314.
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Patient out of pocket payments now account for more than 33% of provider revenue; seven times as much as in 2000.
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Average patient balance after insurance grew 67% from 2012 to 2017.
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42.9 million Americans are estimated to have a health care bill in bad debt collections.
Part 2 of this series will cover Bad Debt Reduction Strategies
We welcome your comments and questions contact Donald Tapella at Medical Recovery Services
Email: dtapella@mrsa1.net
Phone: (816) 229-4887, ext.112