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Two Factors Contributing to Perceived Reduced Revenue Recovery in 2023

A female doctor sitting in a chair beside an smiling elderly female patient

Medical collections are becoming increasingly challenging. There are several factors that are impacting how, when – and if – you receive payment for the care you give your patients which can lead to reduced revenue recovery.

From changes in Medicaid to the way credit bureaus are reporting medical debt, there are many unrelated situations that can come together to affect your bottom line. Below, we’ll talk about two of the ways you can expect to see reduced revenue recovery this year.

Medicaid

The nation is beginning to emerge from COVID-19 and enter a new normal.

Unfortunately, that means the end of the Families First Coronavirus Response Act (FFCRA). The Act required states to ensure continuous enrollment in Medicaid in exchange for enhanced federal matching funds during the Public Health Emergency (PHE). These policies helped lead to an increase of 27.9-percent in enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) from February 2020 to 91 million in September 2022.

But now, an estimated five to 15 million could lose Medicaid coverage during the unwinding. How states choose to manage the process could also affect how many people are able to maintain coverage. 

With the unwinding of the FFCRA we may see a significantly higher number of previously qualified Medicaid recipients will add to the “Gross Placements” for Americollect. We will first see these additions in Early Out this spring and will start seeing them in Bad Debt sometime this summer, continuing throughout the year.

What does this mean for you? Healthcare facilities should expect to see perceived reduced revenue recovery in 2023. As more accounts go further into Early Out and Bad Debt, they will increase the accounts we receive and the percentage of recoveries we are able to make will decrease also.

Credit Bureau Reporting

Credit reporting is seeing a variety of changes that are happening rapidly. From how soon you can post, to the amount of debt required, plus several other requirements, there is a lot to know. Below, we’ll highlight some of the areas that will impact your recovery efforts.

We are beginning to see the impact of medical debt being removed from the scoring models. The claim is that medical debt doesn’t have an influence on how people pay, but it may negatively affect when and if those medical debts are paid, which will impact your bottom line.

Also, by mid-2023, medical debt under $500 will not appear on credit reports. The debt is still active, it will affect reporting and potentially recovering payments for those debts. Working with patients will become even more important as there will be less incentive to pay these debts.

Finally, with all these changes to medical debt reporting, there are a variety of articles popping up that advise patients never to put medical debt on a credit card they don’t plan on paying off right away. The reasoning is that once this is transferred to a credit card, it becomes a financial debt instead of a medical one and credit reporting can occur. Talking to patients and helping them find a better solution is smarter than telling them how to just keep it off their report.

Conclusion

The medical debt landscape is changing fast, and in ways that may reduce revenue recovery for your facility. Who Medicaid is covering to how credit bureaus are reporting medical debt are making it harder to work with patients. Information – good and bad – is out there. Americollect is here to help you to better understand these changes. Contact us today so we can help protect your bottom line.

Ridiculously Nice Legal Disclaimer

The content provided in this communication (“Content”) is presented for educational and general reference purposes only. Americollect, Inc and/or AmeriEBO LLC either directly or indirectly through speakers, independent contractors, or employees (collectively referred to as “Americollect”) is providing this Content as a courtesy to be used for informational purposes only. The Contents are not intended to serve as legal or other advice. Americollect does not represent or warrant that the Content is accurate, complete, or current for any specific or particular purpose or application. This information is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel. By using the Content in any way, whether or not authorized, the user assumes all risk and hereby releases Americollect from any liability associated with the Content.

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