Since the arrival of the Affordable Care Act, health insurance plans with annual deductibles of as much as $10,000 have become increasingly common as insurers try to find ways to keep their monthly premiums as low as possible. In rural parts of the US, where incomes are often relatively low, high-deductible plans are particularly popular. That also means bad debt is incredibly high for most healthcare organizations.
5 Things You Can Do If Your Organization Has Bad Debt
You won’t see a major shift in your revenue overnight, but by incorporating the following advice, you can reduce your bad debt for a noticeable improvement over time.
1. Eliminate ICD-10 coding errors on your claim forms
Entering incorrect codes or not coding for the actual amount of time a patient has been seen by a doctor can result in plummeting reimbursement rates. That’s why it’s crucial to ensure all healthcare professionals are properly trained in coding, particularly in the case of concomitant conditions.
2. Carry out upfront credit reviews
A growing number of ASCs and surgery centers — particularly those that offer elective procedures — have resorted to carrying out upfront credit checks on their patients. Some of these surgery centers are also requiring payment in advance for elective procedures. Along the same lines, be sure to clearly communicate cost to your patients so they know what to expect and can’t claim to be surprised (and document everything).
3. Properly verify the identity of a patient before rendering any services
A new trend has emerged among experienced debtors: they sign up for an elective procedure and afterward, simply claim someone stole their identity; i.e. they never received such a service. It is then up to the healthcare institution to prove that it treated that patient. If it can’t, the money has to be written off as bad debt. This can easily be prevented by gathering all the relevant information upfront. Make sure your staff makes a copy of a patient’s photo ID that contains their license details.
4. Regularly review your collections process and make adjustments if necessary
If your collections process was originally implemented in the 80s and has never been updated since, chances are that it no longer functions properly in a fast-changing environment. Merely sending out a bill on the first of every month and hoping the patient will pay is simply not good enough anymore. Review your internal collection procedures regularly, particularly if bad debts have increased recently. Chances are that there is room for improvement, and the sooner you implement changes, the sooner you can start collecting more money you earned.
5. Escalate accounts sooner rather than later
The simple truth about unpaid accounts is that the older they get, the harder it becomes to get paid. Many smaller healthcare institutions are simply handing over unpaid bills to a collection agency within two or three months instead of six months. Others choose to escalate these bills to a small claims court. Depending on the circumstances, either could be a good option, and either is certainly better than sitting back and hoping the money comes in.
Use a Professional RCM Service to Improve Your Collections
Improving your organization’s collections and preventing bad debts can require a lot of time and effort. However, strengthening and streamlining your RCM process can transform your organization and ensure you’re getting paid for all the work you do.
At Ultimate Billing, we pride ourselves on helping our clients reach a 20% revenue increase in the first year alone. If you want the same results so you can eliminate your bad debt, schedule a quick consultation with our team today.