Avoid bad debt writeoffs: communication is key
Providers are thinking a lot more about bad debt write-offs than they have in the past. With the move toward high-deductible health plans (HDHPs), where patients are now responsible for more of the financial aspects of their care, the often-unavoidable write-offs are just a fact of life, right?
Well, hopefully not. While the current situation makes writeoffs inevitable, a sound self pay strategy can significantly diminish their frequency. Before we get to the strategy part, let’s look at some interesting statistics.
As Becker’s Hospital Review correctly points out, “the use of health insurance exchanges under the Patient Protection and Affordable Care Act is contributing to the rise in the use of HDHPs. Consumers using the exchanges are overwhelmingly selecting bronze- and silver-tier plans, which both have sizable deductibles.”
The article places the percentage of people in these plans at more than 20 percent in 2014, up from merely five percent 10 years ago. Additionally, whereas a high-deductible plan of a decade ago fell within the range of $500 to $1,000, today’s HDHP deductibles can easily top $2,500 or more.
In an environment where many patients still owe a sizable amount of money after their insurance carrier’s contribution, it’s becoming increasingly important for providers to develop a strategy that minimizes bad debt write-offs and the associated negative effects to their revenue cycles.
As we’ve discussed in several blogs and content pieces over recent years, one of the most significant parts of any self-pay strategy is communication—immediate and continuous communication. Keeping your patients engaged and informed about their charges and their financial responsibilities from the beginning significantly improves your chances of avoiding bad debt writeoffs and getting the money that you’re owed.
As our CEO, Chris Klitgaard wrote in a past MediRevv article, 6 Tips for Not Leaving Money on the Self Pay Table, “Lack of proactive communication with patients often leads to unnecessary problems and poor results. Patients need to be educated about various elements of their medical bills—if they’re unsure, the likelihood of nonpayment increases exponentially.”
Chris also wrote in that piece about the importance of rigorous, regular patient collections follow up. As an account ages, he pointed out, your likelihood of payment decreases exponentially. It’s vital to communicate early and continuously throughout the relationship to ensure patients understand their charges and realize their financial responsibilities.
It’s also imperative to give options regarding payment via a mutually agreeable payment plan structure that works for the patient and your organization, and one that gives options regarding the method of payment. Whether electronically or via traditional methods, make sure you cater to the preferences of patients from all age groups.
The subject of bad debt write-offs and how to avoid them is sure to be top of mind with providers for some time to come. We’ll definitely be back with more on the subject soon. In the meantime, why not peruse the offer we have below? We're sure it will help you discover more ways to more positively impact your bottom line.