Account 'uncollectable?' Try a different approach
Be more patient-friendly
If you don't pay this bill, we're going to send you to a collection agency." This was a commonly heard statement by patients at Tallahassee (FL) Memorial HealthCare, when Joan S. Braveman, director of patient access and financial services, took over the business office.
There was a markedly different approach to collections then. "I felt that our customer service people were really trained to be collectors. What they were really doing was hounding patients for payments," says Braveman.
The attitude of "you owe us that money, and we're going to call you until we get it," has become much less threatening and more patient-focused, says Braveman. Staff now make statements such as "I'm calling to let you know that we have sent you three bills, and it is our practice to sent the account to a collection agency. Before we do that, I want to give you an opportunity to help you pay this bill," says Braveman.
"The response to that is great. People want to do something at that point," says Braveman. "We have become advocates for the patient: We're the good guys, and we don't want to ruin your credit score."
The approach has paid off financially as well, says Braveman. She points to a woman with a $27,000 bill, who has made monthly payments for years totaling over $14,000 to date. "I think part of the reason is that we treated her with respect and didn't threaten her," says Braveman.
In some cases, Tallahassee Memorial's registrars have told a patient, "We are looking at your account. We're quite certain you will qualify for charity care. All we need is a copy of your tax return," and received a disappointing response.
"People may tell you, 'Nobody can hurt my credit any more than it already is,'" says Braveman. For this reason, the department is looking at taking the approach of "presumptive charity," she reports.
"There are some very strict Florida statutes that make it clear that for us, as a not-for-profit hospital, we need to have documentation to claim something as charity on our cost reporting," says Braveman. "We do get audited on that. They will randomly pick a certain number of accounts, and we provide the documentation for those."
These audits means tax returns, unemployment statements, housing statements, a picture ID, bank account statements, and credit reports need to be on file, she says. "On the other hand, [the Centers for Medicare & Medicaid Services] at the federal level has said that as long as you are consistent across the board, you can presume charity," says Braveman.
This presumption means that even if the patient is not being compliant in meeting state regulations, the hospital could presume charity based on parameters such as a credit score under 450 or a bankruptcy in the last five years, she explains. "Were we to do that, we couldn't claim it on our state reporting, but we could on our federal tax reporting," says Braveman. A lot of these accounts potentially could be classified as free charity care, she explains.
"We are looking at that, because what happens is those accounts go to the collection agencies," says Braveman. "And I typically get calls from them, saying, 'You're not sending me something I could ever collect on. There is no money there.'"
Braveman says that previously, when bad debt was sent to a collection agency, "it was pretty collectible. You made a couple of phone calls, and the patient paid it. That's not happening today." While collection agencies typically collected around 12% or 13% of the hospital's bad debt, today they are only collecting about 2%, she reports.
Part of the reason is that members of the patient access staff are doing a better job of getting the money upfront. "We are having conversations with patients. By the time the accounts are going to the agency, they are pretty well-worked," says Braveman. "A bigger part of it is that people just don't have the money."
Over three months, staff send three bills and make one phone call, for a total of four contacts with the patient, says Braveman, and a precollection agency gets involved if there is no response.
"They are a collection agency, but they do not report to the credit reporting agencies," says Braveman. "If there is no response, then it does go to a true collection agency, and it shows up on the patient's credit report."
For more information on improving collections, contact:
Joan S. Braveman, Director, Patient Access and Financial Services, Tallahassee (FL) Memorial HealthCare. Phone: (850) 431-6202. Fax: (850) 431-6737. E-mail: Joan.Braveman@tmh.org.