It was the best of plans, it was the worst of plans, it was the age of rising deductibles, it was the age of shrinking budgets, it was the epoch… I had to look up what the word “epoch” meant, so I’ll stop there! Shout out to Charles Dickens for letting me play on his epic opening of A Tale of Two Cities to begin this article on how I’ve seen Early Out Collection Services work brilliantly to improve the patient experience for hospitals and health systems, reduce A/R Days, and accelerate cash flow, and how I’ve seen it turn into a total nightmare if the program is not set up properly, or the wrong partner is hired. If you’d like to skip the rest of this article, here’s the best advice I have to give: do everything you can to simplify your patients’ experience with your billing process. That focus will send you down a successful path.
Hospitals and health systems have been going down the path of “do more with less” for a long time now, and one result of that is that resources have been focused on higher yield activities like insurance claim follow up, rather than collecting self-pay balances. Now that the average annual deductible for a family health insurance plan is over $8,000, patients are paying much closer attention to their medical bills. This results in many more patient calls with questions on their bills, financial assistance availability, and options for payment. When this increased demand for customer service attention meets a shortage of in-house talent able to answer patient questions, hold times and call abandonment rates increase to unacceptable levels, patients get frustrated, and the experience the patient just had with your facility can get spoiled no matter how wonderful their care. Not to mention that with growing deductibles comes an increased risk of revenue leakage. We know that the longer an account goes unpaid, the less likely we are to collect it, so adequate follow up is more important now than ever.
That’s where an Early Out partner can come in and be a big help in handling those inbound call questions, keeping hold times low, following up on unpaid accounts in a timely manner, and streamlining communication and account resolution for patients. That said, there is a lot at stake with an Early Out partnership, especially since the company you hire represents your hospital(s) directly, so be careful to avoid these pitfalls we have run into that compromise the patient experience, and result in way too much time spent with unhappy patients.
Early Out Pitfall #1 – “Day 45”
One way to set up an Early Out partnership is to place accounts with that company 45 days after the first bill goes out. The first bill has the phone number of the hospital’s business office on it, but the subsequent bills sent out by the Early Out partner often look very different and have the phone number for their office, not the hospital. The biggest problem with this arrangement is that a patient can have an account with the Early Out company, and another bill still at the hospital, and would have to speak with two different business offices to resolve both balances, even though both places said they were the business office of the same hospital.
To avoid this issue, place all self-pay balances with your early out partner the day the accounts drop to self-pay. We also highly recommend that all statements sent to patients come from the same statement vendor, whether that’s the one you currently have in place, or the one the Early Out partner uses. That way they look like bills the patient has received before and they don’t think they may be receiving a scam attempt.
Early Out Pitfall #2 – Multiple Early Out Partners
Most hospitals across the country use multiple partners for bad debt collections in order to compare performance and have a backup plan if one of the agencies starts falling behind. When it comes to Early Out, those benefits need to be weighed against the benefits of presenting a unified business office experience to your patients. Many households these days have multiple last names due to an increased number of blended families and changes in societal norms. If you have two partners for early out, and accounts are alpha split by last name, a good number of your patients could have to talk with one Early Out partner for one family member’s accounts, and another Early Out partner for another family member’s accounts; a huge source of patient dissatisfaction.
We highly recommend only using one Early Out partner. In order to manage performance, I encourage you to hold them to call center customer service metrics such as call abandonment rate (under 5%) and percentage of calls that wait less than 30 seconds before being answered (70% or higher), as well as monitoring a monthly activity report of inbound calls received, outbound calls made, statements sent (if applicable), and of course, dollars collected.
The moral of the story is this, avoid these two common pitfalls by simplifying the patient experience with your business office, and you’ll be rewarded by happy patients, higher collections, and higher patient loyalty for years to come. Make it as easy as possible for them to get answers to their questions and resolve their self-pay balances, and good things happen. From the patient’s perspective, paying for healthcare services is already a very stressful experience. Help them help you strengthen your bottom line by devoting the thought and resources required to offer an awesome patient experience!