Spinning Straw into Gold
Healthcare Financial Management (03/07) Vol. 61 , No. 3 , P. 76 ; Koczan, Marilyn A.
Healthcare providers face major challenges in ensuring that bad debt collections are an efficient process that accurately settles accounts, while not wasting too much effort on accounts that are not likely to be paid. However, this task is increasingly complex, with the involvement of primary and secondary third-party collections agencies--whose behavior is sometimes not effectively monitored and analyzed, say critics. As a result, bad debt costs can become far higher than they need to be.
Healthcare providers implementing a systematic method for evaluating the accuracy of collections agency invoices are likely to see their costs drop considerably. Moreover, technology can track collections agencies' activities, impose rules-based workflow for these activities, and ensure that funds spend on these third-party activities result in timely payments.
Meridian Health's system, for example, requires its agencies to use automated policies rather than continue with processes that were poorly defined. It also tracks the receipt of key files by agencies in order to provide the health system with timely agency records' updates, which are then used to pay agencies based upon their collection percentages.
Meridian also notes that its system determines which accounts are likely to pay and which accounts are best kept in-house or dealt with by a specific agency. As a result, the company says it is better able to identify errors or poor practices, such as irregular cash reconciliation and account closings.