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Reducing Patient Debt (Part 2)

Some steps you can take to help reduce bad debt

  1. Check patient insurance eligibility with every patient visit.

  2. Ensure prior authorization is in place, if necessary, before providing treatment.

  3. Use a patient cost estimator to determine patient financial liability.

  4. Train registration staff to engage patient in discussion of payment. Consider a policy of collecting 50% of that amount up front if possible.

  5. Work with patients to find alternative financing resources and make reasonable payment plans available to them.

  • Charity-care programs

  • Card-on-file programs

  • Care Credit

  • Exchange plans

  • Commercial or public-payer Medicaid coverage

   6. Identify Medicare patients who may also be Medicaid dual-eligible.

NOTE: Up to 10% of recoverable bad debt revenue might potentially

be obtained through the Medicare cost report.

7. 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.

NOTE: 75% of top performers start collection follow-up

less than 30 days from discharge.

8. Pursue past-due patient accounts in accordance with your organization’s financial policy.

  • Specifically outline debt collection procedures.

  • Explain these procedures to every patient.
  • Require patients to sign off acknowledging that debt collection procedures were explained prior to services being rendered.

9. When working with a non-compliant patient:

  • Try to correct the problem while documenting all communication with them.

  • Keep the lines of communication open with patients and payers.

A Hospital’s bad debt recovery strategy should be proactive and educational, en-couraging patients to pay their medical bills before they result in adverse action or become write-offs.


For more information, contact Medical Recovery Services

(816) 229-4887

Medical Recovery Services is a full-service revenue cycle company assisting

hospitals and surgical centers in achieving their full earning potential since 2004.