Improving Patient Billing / Early Out and Bad Debt Collections for ASCs

In healthcare, patient billing, also known as early out collections, and bad debt recovery can substantially affect revenue and patient satisfaction. Getting the process right is vital.

According to a recent medical debt survey by Debt.com, 50 percent of Americans now carry medical debt, up from 46 percent in 2020. Most respondents carry between $1,000 to $5,000 worth of medical debt.

New research published in JAMA also revealed that Americans owed nearly $140 billion in unpaid medical bills to collection agencies in 2020.

This $140 billion does not even include medical bills owed to providers, nor those paid with credit cards or on long-term payment plans.

With more than 137 million Americans (i.e. 42 percent of the national population) burdened with medical debt, healthcare providers and surgical facilities need to embrace a new approach to patient billing and collections.

When it comes to debt collections, time is of the essence.

In general, the sooner past-due accounts are sent to collections, the higher the return. Alternatively, the longer a facility waits, the less likely the debt will be collected.

We have written previously why it’s still important to send accounts to collections – even during Covid.

When it comes to bad debt collection, the earlier the accounts are assigned to third-party collections, the better the performance and the more revenue recovered.

In Mnet’s experience, it is more valuable to assign accounts to collections on Day 90-120 rather than later (Day 180-270 or 1-year+ mark).

Our data shows that as accounts age, the chance of receiving anything back on that account drops drastically. Here are two key insights which stand out:

• Recovery: From <90 days assignment to 90 days, the recovery percentage drops from 30% received percentage to 17%, and it continues to decline from there.
  • This means that clients that assign (write off) accounts sooner get paid sooner, and more often.
• Disputes: Over 90 days, the chances that an account will be disputed quadruples from about .10% to .40%.
  • These disputes are costly for clients and present potential compliance risks. By writing off accounts sooner, your facility saves valuable time and money.

Since collections return rates decline over time as accounts age, collecting from patients will always be a greater challenge for healthcare providers.

A better strategy would be to utilize pre-collection approaches like early out as a preventative to assigning patient balances to bad debt.

Early out, or patient billing, is about trying to prevent a loss, so early intervention is crucial.

Early out, also known as patient billing, basically means working with patients and educating them about their billing, helping them understand what is actually owed versus what is not.

During this stage, providers or early-out collection vendors reach out to patients early during the billing process, usually from Day 30 to Day 60.

Providers send out reminders to patients about their slightly overdue payments. They might also offer to enroll them in payment plans or debt repayment programs.

In a Day 1 patient billing process, the first statement to the patient is either sent by the provider or the vendor, with the vendor managing the patient account from this point. All incoming customer service calls during the initial statement cycle are then handled by the vendor.

Early out helps surgical facilities shorten the revenue cycle and settle accounts as quickly as possible.

Chasing down payments from patients can be frustrating for healthcare providers whose primary concern is patient care.

With the rise of healthcare consumerism, early out collections must be centered around the patient’s needs. Greater emphasis should be placed on the entire patient financial experience.

Patient billing is a very effective strategy for healthcare providers because it offers flexibility and personal communication. It might mean offering patients payment plans, discounted plans, payment options, etc.

Patients who understand their bills and are offered flexible payment options are far more likely to pay them.

According to a survey by the Advisory Board, most patients want financial counselors or patient financial advocates at the first point of access.

PYMNT’s 2020 Healthcare Payment Experience Report also revealed that nearly two-thirds of patients want access to payment plans, yet only 44 percent of patients reported being offered payment plans last year.

Here are other benefits of working with early out collections vendors:

•     Recover more revenue
•     Increase cash flow
•     Lesser complaints and disputes
•     Save resources and staff for other areas of patient care
•     Enhanced patient financial experience

Mnet can help healthcare organizations re-envision their patient collections to be earlier in the revenue life cycle and to lean towards risk or loss prevention.

Mnet offers both patient billing (early out) and third-party (bad debt) collections that can benefit your facility and your patients.

This allows Mnet to become familiar with the accounts in receivables right from the beginning and allow us to customize approaches to give your patients a better financial experience.

By sending accounts to us early in the process, your facility is set for maximum revenue recovery.

•     Increase your monthly patient collections by 40-100%
•     Dramatically reduce your bad debt write offs
•     Increase patient satisfaction through better financial experience (lesser disputes and complaints)

With Mnet’s Billing Solutions, one surgical hospital increased their cash flow by $1.8 million and reduced their bad debt by $1.1 million in the first year alone.

In today’s consumer-driven healthcare environment, patient satisfaction is key to your facility’s financial wellbeing.

By partnering with Mnet, you get an end-to-end patient revenue cycle that elegantly transitions from first-party to third-party — substantially increasing cash flow and patient satisfaction.

Learn more about Mnet’s Patient Billing Solutions.

We believe every patient deserves a helpful, transparent, easy-to-navigate financial experience in healthcare.

Mnet is the premier revenue cycle management & technology provider to the surgical industry. Mnet provides customized patient-pay solutions to surgical hospitals and ambulatory surgery centers. Mnet Health partners with over 900 surgical facilities nationwide and is the preferred vendor to the leading ASC management companies in the US both directly with and in support of centralized billing offices.

Mnet’s tailor-made brand, PaySUITE, is a white-labeled payment technology platform that helps surgical facilities, and their providers grow their business by helping patients pay. Mnet’s patient-pay solutions significantly increase self-pay collections while creating a better financial experience for patients. For more information, visit mnethealth.com.