Medical accounts need to be handled securely. Unlike other debts, the medical debt can't be dealt with similarly. Instead, you must run a comprehensive accounts receivable management process. However, many common issues may plague healthcare providers. A professional healthcare debt collection agency will fix all the problems when it comes to managing cash flow.
Besides, a few common problems plague healthcare providers that can be avoided in a few simple steps. Here's what you need to know,
Denied claims
Claims getting denied is one of the most common AR problems plaguing healthcare organizations. Therefore, the healthcare community must focus on insurance claim denial rates. Unfortunately, benchmarking information is hard to come by; however, there are various sources that estimate the industry average denial rate ranges from 10% to 25% of all claims submitted.
There's an industry-wide problem, and less than two-fifths of practices actually appeal denied claims. This is a significant lost opportunity when recovering revenue owed to the practice or hospital. However, debt recovery services resolve it by running simple corrections.
The accounts receivable staff must review all claims prior to submission and ensure they meet payer guidelines. In addition, they must follow up on all denials.
Unnecessary write-offs
Some write-offs are essential. These may often be related to the first common problems, i.e., denied claims. Rather than automatically writing off denials, the receivables team must take the time to review each one. Prior to writing off unpaid accounts, you must check each one and ensure all payment options get exhausted.
Patients are ready to work on their debt, provided the healthcare debt collection agency takes the right step. A brief review of each overdue patient account results in a significant improvement in receivables.
Here are some guidelines to focus on,
Deciding write-offs require managerial approval
You must review all your accounts before being written off. The organization may want to set a dollar amount or situation. It requires approval from management and expedites smaller or less contentious accounts.
Over time monitoring
The healthcare debt collection agencies will track and monitor all the write-offs for patterns or spikes. However, there have been many instances where denials come from the same payer. In addition, there are more bad debt write-offs for specific procedures. These trends help you identify issues within reimbursement policies and procedures.
Creating a benchmark
You must review the past data and determine the organization's average write-off rate. When you get to monitor trends, you can identify and create a strategy that reduces those write-offs you do not have control over. You must establish a baseline or limit for the annual write-offs that you can control.
Bad debt
Patient responsibility accounts for more than one-quarter of the healthcare industry's revenue. Also, the rising bad debt is an increasingly common medical AR problem. In the current circumstance, it is no longer sufficient to discuss patient responsibility only at the time of service. In order to improve the patient collection, it's critical to start collecting throughout the entire revenue cycle. Pre-servicing, the office must gather all necessary billing and insurance information.
Collection culture
Healthcare professionals will enter the field to help a patient. It's uncommon for accounts receivables to be disregarded in favor of providing care or an exceptional patient experience. Also, getting paid for services rendered is crucial when maintaining a successful practice. It's more about continuing to provide care.
You must make the accounts receivables a priority. Healthcare organizations must foster a culture of collections. This requires buy-in from leadership, who must make a top-down decision to create it.
Don't make these collection mistakes
When attempting to collect from the patient, you may make a simple mistake that could cost the practice money. Financial conversations can be exceptionally stressful, and in order to make it comfortable, representatives may be too accommodating, creating arrangements that do not benefit the practice.
Long-term payment arrangement plans
If a patient has agreed to a monthly payment on their balance, it can be tempting to accept any amount they are willing. However, working out a payment amount within the arrangement's length is essential.
Waiting too long for collection calls
The chances of recovery decrease by 50% once the patient walks out the door. Besides, waiting too long to begin the process can be pretty concerning. Therefore, the healthcare debt collection agency will estimate prior to services being rendered whenever possible.
Final Wrap
Your practice must make the best decision when it comes to debt collection. The ultimate aim here is to collect more of your past-due balances. Consistent reporting to your collection agency helps you improve the recovery, ensuring a much healthier revenue cycle.
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