How a Collection Agency Can Improve Your Healthcare Organization's Bottom Line
Hospitals struggle with past due A/R. Healthcare has a problem. The costs of care are skyrocketing, reimbursement co...
Hospitals struggle with past due A/R.
Healthcare has a problem. The costs of care are skyrocketing, reimbursement continues to decline, and a recent report says more consumers are enrolling in high-deductible health insurance policies than ever before. The impact on the bottom line of the healthcare industry is troubling; Becker’s reported in 2018 that:
- Operating expenses are growing by 7.2% on average.
- Debt-to-cash flow ratings on average are 2.8. This means hospitals are carrying almost three times their debt to income.
- Average accounts receivables are 47.8 days.
- The average payment period is 62.8 days.
While hospitals have been facing reimbursement challenges for years, declining margins coupled with rising costs along with the need to improve technology and infrastructures will all shake our nation’s health systems to the core. A simultaneous increase in demand driven by the aging of the Baby Boomer population will create the perfect storm as hospitals seek new ways to improve their bottom lines.
This article looks at how a partnership with a professional collection agency could help hospitals fight back against these trends to improve their operating margins. How can hospitals benefit when a collection agency helps staff their back-office functions?
Benefits of a Collection Agency for Hospitals
Uncompensated care provided by hospitals is rising, according to the American Hospital Association (AHA). In 2016, our nation’s hospitals provided over $38.3 billion in uncompensated care, but hospital revenue leakage takes many forms:
- Medical reimbursement denials by payers
- Medicare underpayments
- Faulty claims management processes
- Commercial contract underpayments
- Uninsured self-pay bad debt
- Underinsured patients with balance after insurance reimbursement
The answer to stopping many of these leaks comes from outsourcing A/R to a collection agency. The best collection agencies to work with offer hospitals technology-driven solutions to improve A/R. The technology employed by a collection agency can help hospitals:
- Reduce and prevent fraud
- Protect PHI
- Validate identity, address, and demographics
- Identify self-pay accounts that have billable insurance coverage unknown to the hospital
- Prioritize accounts with a propensity to pay
- Increase collections and cash flow
Few hospitals have the technology and staffing resources necessary to keep pace with today’s revenue cycle challenges. Partnering with a collection agency frees up key revenue cycle teams to focus on coding errors that lead to claims denial. Hospital administrators can focus more effectively on patient outcomes and strategies to improve market share.
A collection agency like TSI has teams standing by to pursue debt collection while maintaining the delicate relationship hospitals have with the communities they serve. TSI has invested heavily in next-generation technology to keep your patient data safer while using data analytics to identify the accounts that are more likely to arrange payments on past due accounts. We leverage both of these tools to improve our outcomes to get your revenue cycle to a more balanced level.
Hospitals need new revenue cycle partnerships to counteract some of the challenges that lie ahead. Partnering with a collection agency can reduce hospital risk in an era of rising costs and increasing patient responsibility.
Find out how TSI can improve your hospital’s bottom line. Contact us today.