Bad debt is on the rise according to a 2008 survey from Transunion. This survey reported that almost 80% of the hospitals responding indicated bad debt growth of between 6 and 20 percent since in the past 20 months.

Other key survey findings include:

- Consumer Directed Healthcare Plans are a source of concern for hospital administrators. Almost 80% believe they will be a significant source of additional bad debt by the end of 2010.

- Patient collection goals/concerns took two of the top 3 spots on the leading business goals of hospital administrators. Almost 45% of executives put improving pre- and post-patient encounter collections as their top business objective. Almost 20% have decreasing bad debt as their number one priority.

These data points show a compelling need to revisit medical practice patient collections and insure it is being done effectively and efficiently. Tools and approaches that can serve a practice well include:

- Better use of on-line electronic payment tools. The latest tools can make it easy for you to accept practically any form of payment on-line and for patients to pay in a self-serve manner.

- Have more than one credit-card reader if you’re processing a lot of patients at the same time. If possible, install a card reader with a built-in check scanner to convert a paper check into an electronic one, debiting the patient’s account that much faster.

- Establish a consistent policy on whether you’ll reschedule these patients or let them see the doctor and mail in their money later. If you choose the latter route, make it easy for patients to remember their responsibility. Hand them a self-addressed envelope marked “COPAY-URGENT”.

- Prioritize patient collection efforts by more than just the balance owed. Consider the patients likelihood to pay. A $1,000 balance from a patient that is only 20% likely to pay is worth much less than a $500 balance from a patient that is 80% likely to pay. Elements to consider when accessing likeliness to pay include prior payment history and employment status.

- make a portion of the front-desk personnel’s compensation dependent on how well they collect money from patients at check-in and check-out. This can help harden soft hearted employees that tell patients, “Don’t worry we will just bill you later.”

The tips and techniques above can help protect you from the growing specter of bad debt.

Copyright 2008. Carl Mays II