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Recently, Accountsrecovery.net hosted a webinar on the New Dynamic of Healthcare Collections. The panelists, Jay Gonsalves, Christian Lehr and W. Judd Peak spoke about their experiences in medical collections, and what changes they’ve seen after the recent news surrounding litigation to recover unpaid medical bills.
Throughout the hour-long conversation, the panel addressed provider concerns about risk to their reputations, the importance of communication, the unique challenges of collecting on medical debt and more.
Reputation Risk in Healthcare Collections
One of the first topics the panelists mentioned was the reputation risk that can arise from suing patients to recover revenue.
Unlike other businesses with one-time consumers, healthcare organizations rely on longstanding patient relationships to thrive. Negative press related to suing patients can damage a medical facility’s image and the trust it has worked to build in the community.
The number of medical organizations willing to sue versus those who are unwilling has always been mixed. However, Lehr has seen more hesitation from medical creditors now that collection litigation in healthcare has been in the news.
Communication in Healthcare Collections
Healthcare providers are becoming more proactive in learning how the third party collection process works. This communication is vital to protecting a provider’s reputation and making informed decisions on whether suing to recover unpaid debts is right for them. Peak has seen many clients recently that wish to delve deeper into the processes their debt collectors use to recover funds.
Gonsalves also advocates for a close working relationship between creditors and outside agencies. The most important factor, he says, is to look at the entire debt collection picture, rather than one or two pieces.
To make this process as simple as possible when working with your client creditors, you may wish to prepare details ahead of time that you can offer if the conversation arises. Provide information regarding how your agency typically handles the recovery process, and perhaps alternatives if this isn’t a route they choose to take.
- Are you suing on behalf of providers?
- How often do you sue?
- What is the criteria for lawsuits?
- What have you done for clients in the past who opted out of collection litigation?
Communication With Consumers
An open dialogue with your clients is important, but being able to reach consumers is the only way to resolve accounts. The webinar panelists all voiced their concerns over the increasing communication hurdles the Accounts Receivable industry has been facing.
Call blocking, decreased attention to paper bills, and the cultural shift to digital communication channels are a few of the reasons it's getting harder and harder to make a first consumer contact.
The Consumer Financial Protection Bureau’s (CFPB’s) Notice of Proposed Rulemaking (NPR) looks to address the need for electronic communication in debt collection, but the final rule has yet to be released.
In the meantime, ask an industry attorney the best ways to gain consent to use electronic communication channels now and prepare your staff as well as creditor clients to collect the necessary contact information from patients. This will minimize the need for suing to recover funds because you can not reach consumers.
Consumer Education in Healthcare Collections
Higher deductible healthcare plans, copays, and other changes in medical insurance have shifted financial responsibility away from insurance companies and toward individual consumers. With this greater reliance on collecting from individuals, Gonsalves advocates for all parties involved to work together to keep the system running.
All parties bear responsibility in debt resolution, including the consumer. Agencies and creditors may find, however, that the process goes smoother if patients are more informed.
The CFPB offers financial literacy information you may choose to link to on your debt collection website. Patients who have high-dollar debts may also appreciate payment plan options, so offering a schedule through a robust recurring payment system can be helpful.
Empathy in Healthcare Collections
A large medical bill on top of a recent health issue can be difficult to deal with. This is an important fact to remember during the collection process. Because medical debt comes along with other personal circumstances, the panel took time within the webinar to speak on the need for empathy while collecting medical debts.
The experts all agreed that oftentimes, traditional collection techniques can still be successfully applied to medical collections. Often, appealing to the moral obligation to repay debt, basic training to overcome objections, and working with consumers as an advocate will bring success. Many people truly want to resolve their debts, and offering empathy and viable solutions is a great way to diffuse this sensitive personal issue.
The Future of and Alternatives to Consumer Litigation
Suing patients to recover funds will always be a possible tactic for recovering medical debts. However, the future of collections may offer new opportunities for debt recovery. As the CFPB’s NPR comes closer to a final draft, attorneys like Joann Needleman are certain there will be new possibilities for electronic communication in the ARM industry’s future.
Agencies should prepare now for the implementation of electronic communications. The easiest first step is to add these tools into day-to-day operations within early out or pre collect programs. Using email and text before an account goes into a default status will save both your client and your agency time and money while preparing your staff on how to use the technology.
Download this traditional vs digital communication for accounts receivable comparison sheet to see how much you can save while looking like the hero to your clients.