Penny Saved, Money Lost
One of the most interesting and fascinating parts of working with hospitals and physicians is observing the diversity in approaches to staffing for handling accounts receivables. One provider will have an adequate number of employees to work the out standing accounts on the system. The next business office we visit will be woefully short of manpower, and the patient-pay accounts will be pitifully neglected.
It seems that when there is a cash crunch or when there is the perception that business office may be overstaffed, the first place a cutback occurs is with the collectors. We are seeing an awful lot of this type of “unstaffing” lately.
There has been a rule of thumb that patient-pay accounts are usually 20% to 25% of the total outstanding. That, of course, means the rest is in insurance. A business office director, will put his or her resources where the money resides: insurance filing and follow-up. No argument from us there.
But we never much liked the idea that there was a “disposable” portion of accounts receivable (patient-pay) that consisted of the 20% to 25% of total outstanding. It’s like there are phantom accounts: “we know they are there, but we’ll just ignore them for right now and maybe they will pay and maybe they won’t, and if they don’t, well we would have had to write them off anyway so why spend the time or manpower to work them?” HUH??
Right now you are filing insurance on accounts, which have $500.00 or $1000.00 deductibles. Not just a few accounts, but a bunch of them. In a few weeks you will receive E.O.B.’s that will tell you that you’re not going to receive an insurance check and that you need to look to the individual for payment.
A big portion of the money outstanding on most provider books will be due from the patient. Many providers will not have the manpower to these accounts. They will be held for three or four billing cycles and then they will be written off to bad debt. Isn’t there a better way to do this?
Don’t give up those accounts without a fight. With higher deductibles and co-pays patient-pay is going to become a larger portion of your outstanding. And it’s not only now, at the early part of the year, when the insurance companies send you tons of E.O.B.’s that say “sorry not this time.” They will be writing you more and more with the same say news: “Benefit not paid, applied to deductible.”
We strongly feel that your business office needs one full-time collector for each 1,200 patient-pay accounts, assuming that the collector spends time only collecting: making calls, answering calls relating to accounts and closely monitoring the file. These accounts should be money in your bank.
Don’t shortchange yourself in a very critical area at a very critical time. Money spent on collections will come back to you many times. Contrary to popular opinion, in this instance, a penny saved is many dollars lost.
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