According to a 2022 Consumer Financial Protection Bureau report, 58% of all third-party debt collection is made up of medical debt. Maintaining best practices for resolving accounts can lead to a positive and supportive experience for consumers, and effective management of debt accounts for healthcare providers.
In 2014, the Healthcare Financial Management Association (HFMA) released a best practices report with information about pre-service communications and post-discharge resolution tips that can help keep consumers informed and current with medical bills. The report was updated in 2020. In this post, we'll cover some of those best practices.
Maintain Effective Communications
Effective financial communication and patient financial education starts before the medical procedure begins. Some of the suggestions offered in the report include:
- Offer or inform of financial counseling. When appropriate, refer the patient to a financial counselor, or inform the patient about financial counseling available to them.
- Inform patients about potential payment arrangements. Patients need as much information as possible to make smart decisions about their healthcare. Discuss potential payment arrangements before the patient receives care.
- Provide education about out-of-pocket obligations. Out-of-pocket obligations can vary, depending on the actual services rendered, timing of other payments and how those payments affected the deductible. Reminding patients can help them plan for their expenses, and maintain flexibility.
More information about communication best practices can be found here.
Adhere to Collection Policies
Provider collection policies provide a roadmap for the provider billing team and the patients. Every provider should have clear, easy to understand collection policies.
- Approve policies through the hospital board or authorized body. Collection policies should be decided upon by authorized bodies, after consideration, deliberation and after a period of data collection.
- Make policies public. Post collection policies on your website and make them available to patients through their online accounts. Inform the billing department of all collection policies, and train billing staff as necessary.
Work with Reliable Third-Party Collection Agencies
Vendors and partners that are involved in account resolution must operate under contract with your organization. Make sure they are acting in accordance with policies determined by the hospital or medical facility's board or governing body. This includes:
- Vendors and business affiliates involved in collection must have access to relevant data from patient accounts.
- Healthcare providers must establish regular reconciliation practices to ensure that the business affiliate's system is in sync with the provider's system.
Any accounts that are sent to collections must follow the board-approved collections processes. Any extraordinary collection actions (ECAs) such as lawsuits, liens, wage garnishment should be used with discretion, and your third-party representative should be aware of your policies. The negative impact to consumers should always be taken into consideration.
Contract with a Trustworthy Debt Collection Provider
Ultimately, medical debt management is a complicated topic. By following well-established policies, providing patient education prior to medical procedures, and by using ECAs sparingly, medical debt collection can be a positive experience on both sides.
Since 1966, Credit Management Company (CMC) has provided full-service accounts receivable and collection management programs across several industry segments, including healthcare. With customized programs available, we can help your healthcare facility resolve medical accounts effectively and efficiently. Contact us today for more information.
