The Unintended Consequence of Sending Patients Straight to Collections

By Samara L Keaton

Sending patient accounts to collections definitely has its place in the medical revenue cycle. But, be aware, there are often unintended consequences.

The potential problem with sending patient accounts to collections before they go through a thorough pre-collection process is that the wrong patients may inadvertently get sent to collections.

The sad truth is that 37% of patient statements initially sent are inaccurate or incomplete due to incorrect billing and/or posting errors. Additionally, more than half the patients interviewed complained that they never received a bill before being sent to collections or that they didn't understand the bill they received.

The most common reasons given by patients that would have paid their bill, but were instead sent to collections, included:

• They didn't believe they owed the balance
• They never received a statement
• They made payments that weren't reflected on the statement
• They thought it was their insurance company's responsibility
• They forgot about it
• They didn't understand their bill
• The bill wasn't accurate
• Their insurance was never filed
• Their insurance was filed improperly
• Nobody would answer their questions

A collection phone call to a paying patient with one of the above issues may incite the patient and anger them enough to leave the practice. Most patients don't respond well when being turned over to collections, especially paying patients.

A recent study revealed that 23% of patients are dissatisfied with post-care billing processes and are therefore twice as likely not to return to the practice or to recommend the healthcare provider to a friend or relative. Since patients rarely confront the practice directly, the practice may never know "why" the patient suddenly disappeared.

One patient leaving the practice may not sound like a big deal. However, it costs three times more to acquire a new patient than to keep an existing patient. And, research by the online publication 4Managers shows that on average, each unhappy customer tells 11 people about his or her bad experience; 13 percent tell up to 20 people about their unhappy experience.

Since most practices are built off of referrals, sending patient accounts to collections without first going through a thorough pre-collection process may be risky.

To mitigate this risk, make sure the following steps are followed BEFORE sending patient accounts to collections:

• The patient was set up properly in the PMS
• The correct insurance was filed
• All patient payments were posted to the account
• The patient payments were posted accurately
• Secondary insurance was filed (if appropriate)
• Statement(s) were in fact mailed to the patient
• The patient actually received the statement(s)
• Patient voicemail messages were returned

Following these steps will significant reduce the potential repercussions of sending patient accounts to collections.

180 Recovery, by MPS, bridges the gap between in-house patient collections and third party collection agencies. 180 turns a practice's patient A/R into spendable dollars, while protecting their reputation as a patient-friendly healthcare provider. Billing and servicing non-defaulted patient accounts as an extension of the practice's A/R department, 180 recovers monies due and prevents the wrong patients from being sent to collections.

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