Bad debt has always been a piece of the revenue cycle pie. What agencies recovered in most cases was just a small piece and it was great depending on the financial strength of the healthcare provider but not necessarily a critical need. But with the onset of the Affordable Care Act and employers switching to and favoring the high deductible care plans for employees, bad debt grew to a bigger piece of that pie as employees struggled with higher deductibles and copays and the health of our nation continued to decline.
With the onset of the Covid-19 Pandemic, people across the globe struggled with
lockdowns, loss of income, fear, and uncertainty. They delayed general and diagnostic healthcare and avoided providers and hospitals out of an abundance of fear and caution. This only exacerbated their healthcare issues. Even with the promise of vaccines, data and information were ever-changing and confusing to most people.
Hospitals had to incur higher expenses due to increased costs to keep staff and hire local and nurse travelers to fill shortages. In some places, staffing issues were caused by exhaustion and burnout, or other personal choices. Regardless, the financial health of many healthcare institutions is declining, and according to, Beckers Healthcare, many are on track to end the year with negative margins. According to Dealflow’s Healthcare Services Investment News:
“In October, operating margins declined 2% from the previous month
and were down 13% from a year ago, Kaufman Hall detailed in its
National Hospital Flash Report, which collects data from more than 900 hospitals. Read more.”
The use of Early Out (first-party) and bad debt (third-party) collections is becoming an increasingly important part of the revenue cycle pie. Preferred Collection and Management Services recognizes this and is continually adapting to the latest in technology while maintaining compliance with ever-changing regulations not just at the federal level but at the state level as well. Of significant concern is the impact changes in the laws are impacting the way we are allowed, and the frequency at which we are allowed to communicate with patients. Credit reporting leverage was attacked by the Consumer Financial Protection Bureau and many state attorney generals specifically for medical debt and how it is handled in collections. It is estimated that when the final part of the credit reporting rule changes goes into effect in 2023, up to 80% of the accounts in collections will not be able to be credit reported.
Agencies now must scrub the cell phone numbers they are calling against the FCC’s new Reassigned Number Database. Even if the provider had the patient's consent to call the cell phone number for the patient, if that number has been reassigned to someone else, there is liability under the Telephone Communications Practices Act (TCPA). Most recently, the same applies to ringless voicemails according to the FCC’s declaratory ruling as ringless voicemails now fall under the TCPA.
While the challenges may be difficult for both provider and agency, Preferred CMS is working with vendors to constantly find workarounds and effective compliant methods to recover the dollars that you are counting on and here are just a few examples.
To ensure we have the correct address and phone numbers we use more than a single vendor to scrub against their database to ensure the letter is delivered if the address is different from the date of service or we are calling the best number if it has changed. We are also running the numbers through the reassigned number database to avoid TCPA liability. The same applies to the other methods we use to communicate like through text messaging (SMS) or ringless voicemail. Ringless voicemail is becoming more useful because so many people do not answer their phone calls anymore due to the high incidence of robocalls. We also have enabled a live chatbot on the patient-facing website for convenience. We will also be adapting new payment technology in 2023 through our merchant processor as well as adding another virtual agent for Early Out which is estimated to be completed this month.
The bottom line is that we are in this partnership with you, to meet your needs and expectations of revenue recovery so your margins are not decreased even more than they are now, and so that you can continue your mission to save lives and bring comfort to those most in need. What you as a healthcare provider do for the community is critical to the lives of many. We thank you for all that you do and, more importantly, we appreciate the trust you have put in us to serve you. If you are not yet a client of The Preferred Group of Tampa and would like a free consultation to either ensure your current agency is meeting its full potential for recoveries, or you are considering using an agency for the first time, please don’t hesitate to reach out to call us.