Healthcare Billing Upgrade Could Upgrade Collecting

Debt portfolio buyers and collection agencies shouldn’t fear health care providers’ efforts to centralize their patient billing and revenue collection systems, says a healthcare analyst for ARM industry advisory firm Kaulkin Ginsberg.   

Michael Klozotsky said health care providers’ success in this area will only lead to greater efficiencies for debt collectors and more accurate valuing of debt portfolios. 

“There will still be accounts to work,” Klozotsky said. But a much greater amount will be legitimate bad debt, he said, because centralized billing systems will help health care providers identify errors in their billing systems that have cost debt buyers and collection agencies money.

Klozotsky said it’s not uncommon for health care providers to have multiple accounts for one patient because information was entered incorrectly or different in the system. He cited a misspelled name, incorrect middle initial or address as examples.

Centralized billing systems will help health care providers avoid such mistakes. And because some systems allow customer payments to be recorded in real time and immediately updated throughout the system, customers won’t be billed for services they’ve already paid.

That means that “collection agencies will spend a lot less time chasing red herrings,” Klozotsky said. “They can put the right kinds of labor and resources behind the recovery effort.”

Likewise, debt buyers could see their margins increase because the face value of the portfolios they purchase will be a lot closer to their true value, Klozotsky said. That’s because the portfolios will contain significantly fewer multiple bills for the same person or bills that already have been paid.

While health care providers are counting on centralized revenue management systems to improve their revenue cycles, they know the systems won’t be a cure all for the bad debt challenges they face, Klozotsky said. “Hospitals know it’s a problem they can’t fix alone. They need the partnerships of collections agencies and debt buyers to help them successful clear those accounts and get that money recovered,” he said.