Growing Bad Debt is Not the Disease, but the Symptom--Part 2

If growing bad debt is an alarming challenge for your organization, the root cause exists somewhere upstream in your business processes. 

Addressing growing bad debt requires a wholistic approach, not only with your own organization but also in conjunction with your business associates, especially your collection partners. 

In these articles we examine four areas healthcare providers may overlook (but should explore) when bad debt unexplainably balloons. We turned to Janet Gondeck from our sister company, J.C. Christensen Associates (JCC), which frequently works with healthcare providers to curtail bad debt. In part one we looked at lack of patient payer due diligence and registration and data accuracy. In the second part of this article, we examine two additional areas that healthcare providers should consider to help bring bad debt under control.

Retraining your patients

Healthcare providers will budget every year for staff training, but rarely does anyone think to train their patients.

Or perhaps a better way to put it, bad debt can grow because we have inadvertently trained our patients not to pay their bills, says Gondeck. Many times are patient communities are as aware of billing practices and cycles as anyone in the business office.

If a healthcare provider, for example, only places accounts with collection partners after 180 days, believe us, word gets out, says Gondeck. If patients are given 180 days, many patients will sniff that out and wait 180 days. While they may have ever intention to pay, many times waiting out the debt collection clock can put the patient in the position of finding themselves unable to meet their obligations because they procrastinated.

“Patients know your ebb and flow, and they would know, for example, that they have six months to pay before their account gets sent to an agency,” says Gondeck. Similarly they know if your process is that you will give up an account after five contact attempts. It’s almost as if they have spies in your business office.

The objective, therefore, is to train your patients to behave differently. If your patient community reacts as if they know what you’re doing, then they probably do know, and you need to change up. If you place accounts after 180 days, start placing them sooner.

Real-world example. A large Midwestern healthcare organization hired JCC to replace another third-party agency partner that it felt was underperforming. JCC employs a “patient-centric” approach to recovery, and shortly after signing with the client began a multi-pronged strategy to contact the clients within the accounts receivable portfolio, rather than a more predictable approach. At the same time, JCC set up an infrastructure for payment that enabled patients a variety of methods in which to meet their financial obligations.

The results were immediate as within six months liquidation rates jumped 9 percent and patient complaints fell dramatically, increasing patient satisfaction.

Know your staff

The number one reason behind growing bad debt is lack of resources. While much of the issue can be addressed by putting existing resources in the correct place, the hard reality is that increasing bad debt is often the result of inadequate resourcing in several key areas.

Hiring additional FTEs is often impossible because of budget constraints. But finding an outsourcing partner can equally be considered an anathema by some organizations, usually based on the idea that the provider will lose control or their reputation will be damaged by an outside agency.

Hiring an outsource partner should be done with the same due diligence of hiring of an employee, says Gondeck. Anyone you consider should run their operation transparently with clear visibility into the workings by you, the provider.

Therefore when we say “Know your staff,” we mean everyone, says Gondeck. Each should be trained in the same manner, should approach patients in the same manner, and be as seamless as possible to provide the very best patient experience.

Real-world example. A large healthcare provider organization contracted with ProSource to help them migrate to a new A/R system. Once again ProSource connected to the client’s systems via VPN.

For years the client’s call center on the clinic side had been a source of patient dissatisfaction, the result of high employee turnover. Although ProSource had been contracted to backfill the call center, during the engagement our company identified several areas on how to improve staff hiring and training.

What made the project particularly successful was that the executive in charge of the department committed to seeing that ProSource staff received specialized training on their systems. The client sent trainers to ProSource for two days to insure that business processes and procedures were identical between the companies.

ProSource successfully worked $2.2 million in accounts receivable and more than half was resolved.

Roberta Schultz, Director of Operations, ProSource - Roberta Schultz has over 23 years of healthcare Revenue Cycle and A/R Management experience which includes managing various revenue cycle projects for multiple healthcare facilities including physician, hospital, and healthcare organizations.

Janet Gondeck, Operations Manager, J.C. Christensen & Associates - Janet Gondeck has nearly 20 years of collections experience and began her career at JCC as a healthcare Collection Agent. She has held positions as team leader, supervisor, manager and currently serves as Operations Manager for JCC’s healthcare portfolios working with some of the most prominent healthcare institutions in the nation.