What Keeps You Up At Night? (Part 2)
In February 2017, health system CFOs listed the top issues confronting them and proposed ways to improve performance without making costly investments. This is the second in the series of four short articles that looks at these issues and suggested solutions.
Hospitals can lose as much as $125 billion each year.
$57 billion loss comes from uncompensated care (bad debt and “charity care”).
$17 billion is administrative costs due to errors.
The estimated administrative cost for mailing collection notices: $10-$15 per letter.
The likelihood of collecting overdue bills decreases 40%-80% after 90-120 days.
When accounts are sent to collections, the collection agency keeps 25%-33% of money collected.
In addition, their collection methods often alienate patients.
Strategies for avoiding collection losses because of unprofitable, archaic methods:
1. Offer patients discounts for paying medical expenses in full prior to service. Organizations that do this tend to collect a higher percentage at point of service.
2. Stratify accounts according to claim age, insurance and payers; assign claims categories based on this information to identify:
Percentage of accounts for which payment is collected within 90 days
Percentages paid by patients, insurance, or government
3. Use a comprehensive “dashboard” to give all information necessary in one easy-to-use interface.
(This will allow you to see the stratified bad debt portfolio.)
Implementing these steps will help patients and hospitals focus on care, not payment.
For more information, contact Medical Recovery Services
Medical Recovery Services is a full-service revenue cycle company assisting
hospitals and surgical centers in achieving their full earning potential since 2004.