How to Maximize the Effectiveness of your Healthcare Collection Agency

With decades of experience on both the provider (Allina Hospitals and Clinics) and collections (I.C. System) side of the healthcare industry, I’ve learned a few things about how hospitals can maximize the effectiveness of their collection agencies. Below is a representative list of tips and strategies (with a few words of caution thrown in as well) that will help you capitalize on your relationships with ARM companies.

But before that, it is important to remember two big picture ideas: recognize the complexity of healthcare collections and develop an effective partnership with your collection agency.

Three forces that trouble healthcare collections:

1. Keep abreast of the “legislative chaos” on the national and state level that is sure to affect your (and your agency’s) ability to collect delinquent medical accounts. Minnesota’s Attorney General Agreement, establishing medical billing and debt collection standards for all hospitals in the state, is a prime example.
2. Beware of predatory lawyers who might seek class-action suits against your hospital for real or purported debt collection abuses.
3. Understand that sometimes, no news is good news. Media scrutiny and unbalanced reporting on hospital-agency collection efforts can be a public relations nightmare.

Six recommendations to enhance collection agency performance:

1. Select: consider an agency’s references, reputation, and compliance history, along with the depth of its services and—above all—its healthcare industry experience when choosing a business partner.
2. Process: streamline your own internal collection practices and set a clearly defined delinquency age (120 days, for example) to roll accounts out to your agency partner.
3. Partner: successful hospital-agency partnerships are grounded in human relationships, specific performance expectations, and cooperative environments.
4. Communicate: schedule regular meetings, share competitive results, and include all parties with stakes in the relationship to participate freely.
5. Incentivize: employ creative incentive strategies for your collection agency, including bonuses (above contingency fees), collection contests for agents, and branded gifts (coffee mugs, pens, etc.) as occasional motivators.
6. Celebrate: acknowledge achievements through correspondence, at meetings, and through formal awards and extend gratitude with staff lunches or donut and bagel breakfasts.

Though only an outline of the hard work involved in taking full advantage of partnerships with collection agencies, these strategies start you along the path to more successful recovery of delinquent accounts.

Tom Gavinski has over twenty years of Healthcare Revenue Cycle Management experience with Allina Hospitals and Clinics in Minneapolis, MN and the Sisters of St. Frances Healthcare System in Indianapolis, IN. He has led several revenue cycle improvement initiatives including Patient Access, HIM/Coding, Business Office, and Back-end Collection business practices.

Currently Tom is the Vice President, Healthcare, for IC System, Inc. IC System is a family owned accounts receivable management company with 20,000 clients nationally. Contact Tom by email.