The burden of healthcare expenses on patients is a growing problem for hospitals and patients alike. Hospitals are losing about $7.5 billion in out-of-pocket medical expenses that go uncollected every year. And collecting patient balances has become more difficult largely because patients are struggling to keep up with rising medical costs.
Insurance reforms that have produced higher copays, among other things, are putting a greater financial burden on patients. They are now expected to cover about 30 percent of medical treatment costs, but many cannot afford it. In fact, high medical expenses factor into two-thirds of bankruptcies.
This means that as more patients struggle to pay for healthcare, the amount of bad debt hospitals have is rising. In a survey of 100 hospital executives, 36 percent reported that their systems had $10 million or more in bad debt. And their prospects for recovering that money are grim.
The issue is that many healthcare networks don’t have the technology to handle their complex collections challenges. Martin Health System was seeking a solution to automate its collections processes for self-pay revenue. Based in Florida, the healthcare network has three hospitals and numerous outpatient clinics, as well as an emergency center. That translates to a lot of patient accounts to evaluate. Martin Health needed healthcare collection software.
Optimizing healthcare collections
Hospitals need to be able to analyze their records to determine which patients are most likely to pay. The right software makes that process more efficient and effective so healthcare organizations can improve their collections outcomes. Martin Health System had already optimized its registration and authorization phases but system leaders felt that it could further enhance collections efforts with an automated solution.
In 2016, the network implemented Experian Health’s Collections Optimization Manager. The top priorities were segmentation, identifying charity cases, scrubbing for Medicaid opportunities, and better collection agency monitoring and management.
The self-pay receivables management solution automates many aspects of healthcare collections using data analytics. Martin Health was able to optimize its collections efforts by determining how to allocate resources more appropriately and place accounts with the group best suited to collect for each account. To create a more compassionate experience, the software culls through patient data to screen accounts for bankruptcy, Medicaid and charity eligibility, patient expiration, and more, to remove the accounts that shouldn’t go to collections. Then it segments the data based on priority and treatment strategies and transfers those segments to the appropriate in-house collections department or agency.
The software also continuously monitors accounts for changes in patients’ ability to pay, which is no small feature. According to the aforementioned survey of hospital executives, almost one-fifth of hospitals do not re-check patient eligibility for insurance. And even worse, one-fifth of hospitals lack any process or a third-party partner to recover bad debt. This one function alone could significantly improve hospitals’ collections efforts.
Martin Health System accomplished its goal of better agency monitoring through an overview of collections progress that informed business decisions. Throughout its evaluation process, the Collections Optimization Manager provides performance reports in a real-time dashboard. And the service comes with support from revenue cycle consultants who review the data. They advised Martin Health on optimal collection strategies and suggested opportunities for improvement.
Ultimately, Martin Health System enhanced its collection efforts while reducing the cost to collect. The healthcare organization also found new areas to increase collections performance. In just eight months, the healthcare organization transformed its collections performance.
Having a better handle on its self-pay receivables boosted Martin Health’s overall receivables by more than $4 million in just six months. That included increasing collections by $3.1 million, and finding $975,000 in Medicaid coverage. It accomplished all of these goals by putting the right healthcare debt collection software in place.
Read Martin Health’s success story here or schedule a demo to learn more.
