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Reducing Patient Debt (Part 1)

Bad Debt Should Be Under 3% Of Your Net Patient Revenue

From the Hospitals' Perspective

  1. Since 2000, hospitals have provided $620 billion dollars in uncompensated care.
     

  2. Uncompensated care increased over 8% from $10.8 billion in 2017 to $11.7 billion in 2018.
     

  3. 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
     

  4. 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.
     

  5. And...1% to 5% of self-pay accounts that are written off as bad debt actually have billable insurance coverage.
     

  6. 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

  1. Most patients say they actually want to pay their out-of-pocket charges.

  2. 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
     

  3. Between 2012 and 2017, the average financial obligation after insurance for commercially insured patients increased 67% from $467 to $781.
     

  4. In the same period, Medicare beneficiaries’ average balances owed increased 118%, from $144 to $314.
     

  5. Patient out of pocket payments now account for more than 33% of provider revenue; seven times as much as in 2000.
     

  6. Average patient balance after insurance grew 67% from 2012 to 2017.
     

  7. 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

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We welcome your comments and questions contact Donald Tapella at Medical Recovery Services

Email: dtapella@mrsa1.net
Phone: (816) 229-4887, ext.112