As accounts receivable professionals know, early out collection (also known as pre-collection) is a typical practice to resolve healthcare bills and other late customer payments. It helps organizations shorten the revenue cycle and settle accounts as quickly as possible.
Extended business offices also reduce overhead expenses for the companies your EBO is working with. EBO tactics help companies intervene before pre-collection might be necessary and enhance the process by which you collect early out payments.
Some common tactics include encouraging self-pay debt recovery, sending letters, and making telephone calls on your client’s behalf. Your EBO may also provide staffing medical offices and other creditors typically can’t provide themselves.
What is Early Out Services?
Early Out Collection Services
Managing administrative staff and chasing down payments can be a big job for a hospital system or other healthcare practice. Their primary concern is patient care and often don’t want to use (or can’t spare) the resources it takes to effectively manage late paying patients.
This is why many turn to debt recovery professionals to help manage the revenue cycle. This collaboration helps healthcare clients settle as many accounts as possible before they turn into bad debt.
“There may be opportunities for companies to re-envision typical collection services to be earlier in the revenue life cycle and to be more in the nature of risk or loss prevention,” says Leslie Bender, Senior Attorney and Health Privacy Expert.
“For example, particularly as state legislatures propose laws that delay when medical accounts can either be placed for collections or be credit reported – there may be opportunities to reach out to consumers via those folks who were traditional collection agencies to see what call center or customer service activities could be conducted to prevent losses.”
What is Early Out Collection?
The basic elements of early out billing are often the same, no matter the clients. Pre-collection usually contains the following elements:
- 30 days past due - Healthcare facilities want to recover as much revenue as possible for the services they provide. Employing a company to collect bills that are 30 days past due (but not late enough to be classified as bad debt) will help to both close more accounts and recover more per patient.
- Performed under the client’s name and logo - Pre-collection services are performed not as a third party, but on behalf of the client, using their name. This makes good communication with your clients essential.
- Agents trained to use empathy - Medical facilities may not have the expertise to execute AR strategies with the same level of success as an outside agency. However, anytime a company hires debt collection specialists they are putting their reputation in your hands. They need to trust your agency will treat their patients with respect and show empathy for the circumstances they may be going through.
BENEFITS OF EARLY OUT COLLECTION PROGRAMS
Early out collection services can be a benefit for both you and your clients. Offering a diversity of services is a good way to appeal to a wider range of companies and increase the avenues your agency has for taking in more money.
When discussing with clients whether early out collection is right for them, there are plenty of benefits they will also experience:
- Recovering more revenue - Clients recover more of the original bill than they would if they did not intervene with the patient before collections.
- Fewer resources - Clients spend fewer internal resources on the collection process and can redirect to other areas of patient care.
- Professional expertise - Using a professional ARM company provides clients with years of experience and knowledge on the latest industry strategies and techniques.
WHY IS EARLY OUT COLLECTION BECOMING POPULAR?
The increasing popularity of high deductible healthcare plans offered by workplaces has caused patients to be responsible for more of their healthcare costs than ever before. This, in turn, has created more need for consumers to interact with provider accounts receivable departments.
Greater emphasis on the patient financial experience is something many facilities haven’t fully adjusted to. This is why many operations prefer to use AR professionals to intervene and help patients pay bills.
Complex billing has also added to this problem. Many consumers don’t understand how to read medical bills. This confusion can mislead patients about what they owe, increase disputes, and create roadblocks to quick payment resolution.
Using early out collection methods and other extended business office services will help patients understand their payment responsibility. Not only this, but disputes will be detected earlier in the process and dealt with in-house, rather than through surprise online reviews.
3 Strategies to Enhance Medical Early Out Services
With a greater number of collection agencies offering early out programs and the wider need for administrative help among healthcare providers, this is the perfect time to expand beyond simple pre-collection.
If you already offer more extended business office services in your own collection agency, evaluate your marketing. Do current clients understand everything you offer? Are you using these services as a selling point to potential clients?
Here are three strategic areas of early intervention where you can help healthcare clients better serve patients while resolving more bills, faster.
1. PATIENT RELATIONS
2. BILLING AND PAYMENT REMINDER SERVICES
Just as in every other type of business, patients expect convenience. Offering the payment options they prefer will increase patient satisfaction and resolve more accounts earlier in the revenue cycle.
Sending email and text payment reminders to patients who have opted in can significantly increase the number of payments captured.
If you offer text message and email reminders for patients on recurring payment plans, software (like PDCflow’s Flow Technology) can be a big advantage to your medical clients.
3. TECHNOLOGY ENHANCED COLLECTION SERVICES
Along with offering other early intervention services to clients, in the coming year and beyond, it will be essential to incorporate technology into your collection strategy.
PDCflow lets agencies cater to consumer preferences through a variety of self-serve and digital communication payment features:
- Secure, convenient digital payment options - PDCflow’s Flow Technology allows consumers to view a bill instantly through email or text while speaking to an agent. They can enter their own payment information for enhanced payment security while letting agents confirm payment before hanging up.
- Flexible recurring payment options - PDCflow offers flexible recurring payments to line up with paydays, letting your admin determine minimum amounts or payment schedule length. Recurring payments are even available through your online payment page, so customers can set up a schedule without the help of an agent.
- Secure document transfer - With healthcare clients, HIPAA compliance is essential. PDCflow’s HIPAA compliance facilitates secure digital document transfers. Securely interact with patients or transfer records between facilities while speeding up the payment resolution process.
Impact of Regulation F on Early Out Collection Services
“Regulation F, especially in a healthcare collections context and then when combined with some of the proposed state law initiatives this year, could cause both collection agencies AND creditors to re-think collection and other revenue cycle activities.”
Because of this, early out collections will naturally become more successful for engaging consumers. Pre-collection and EBO strategies are more directly linked with a better patient financial experience because they encourage companies to proactively reach out to patients. This helps service their past due accounts and work with consumers to avoid bad debt.
“Creditors may find they have accounts in their inventory longer, which may drive opportunities for third-party collection agencies to provide a helping hand earlier,” says Bender.
“A traditional debt collector may now find they can offer healthcare providers assistance reaching out to their customers to seek alternatives: getting them into payment arrangements, applying for financial assistance, or other loss prevention options."
This loss-mitigation approach requires the skills, knowledge, and technology of an EBO to work on behalf of healthcare organizations or other creditors.
Bender leaves ARM professionals with a word of caution:
“The CFPB has from time to time seen those debt collection activities in need of oversight to include first party as well as third party activities – so stay tuned for potentially more regulatory oversight of first party work.”