A new rule from the Consumer Financial Protection Bureau bans the inclusion of any amount of medical debt on credit reports. While this may be good news for consumers seeking a mortgage or other type of loan, it could spell trouble for today’s medical practices.
Collecting medical debt as credit reporting rules evolve The growth in high deductible health plans means providers must increasingly collect payment directly from patients themselves. In the absence of financial consequences for nonpayment (i.e., a negative credit score), patients may be more likely to delay payment or avoid it altogether—particularly during the time immediately following the annual deductible reset when patients are usually responsible for the entire bill.
Of course, it’s too soon to tell whether and to what degree this might happen because the rule doesn’t take effect until March 14, 2025. However, providers should begin to think about the potential revenue cycle impact of this new ruling and identify ways to persuade patients to pay their medical debt.
The following are five patient collections strategies to consider:
1. Provide up-front cost estimates. It all starts with verifying insurance coverage at the time of scheduling so providers can convey to patients what costs, if any, patients might incur. Price transparency allows patients to plan ahead and make informed decisions about the care they receive. It also mitigates surprise medical bills that may increase the likelihood of nonpayment. Providers can leverage their patient call centers to give this information to patients well in advance of their appointments so there is plenty of time to ask questions and gain clarity on what may be owed and why. Providers can also provide patient education about expectations for payment on their website. Here’s a good example of how one provider makes it easy for patients to understand frequently asked questions about billing and medical debt.
2. Strive for up-front collections. Armed with cost estimate information at the time of scheduling, patients may be more agreeable to pay all or a portion of the bill at the time of service. Providers may want to begin thinking about how to apply a uniform policy for up-front patient collections even when patients have high deductible health plans. One idea is to offer a discount for early payment settlements. At a minimum, providers may want to enforce collecting the patient copayment consistently. They may even want to collect part of the deductible as well, especially if the visit involves an elective and/or high-cost procedure.
Again, patient call centers can reiterate financial expectations and open the lines of communication regarding medical debt payment options such as tapping into their health savings account (when applicable), flexible payment plans, and financing programs such as third-party lenders that provide no-interest or low-interest medical loans.
3. Submit claims as quickly as possible. Patients are more likely to pay their medical debt when the services they receive are still fresh in their minds. Waiting to submit the claim to the payer only delays the entire process. Best practice is to code the claim within 24 hours or less and submit it to the payer shortly thereafter. Now is the time to focus on medical coding best practices and streamline claim submission workflows to promote efficiency.
4. Provide wraparound patient support. This goes without saying. Providing empathic patient collections support—including support after hours and on holidays (one of the many benefits of working with an offshore vendor)—may be the most helpful step providers can take in terms of persuading patients to pay their medical bills. To do this, patient call centers and revenue cycle staff must be able to understand each patient’s unique financial challenges and collaborate to find the right solution, keeping in mind that what works for one patient may not work for another.
5. Follow up with unpaid balances sooner rather than later. Rather than wait for bills to become 6o or at least 90 days overdue, it will become increasingly important for providers to follow up with patients about unpaid balances within the first 30 days. The more delinquent an account becomes, the less likely providers will be able to collect what’s owed, and this may be even truer in light of the new medical debt-credit report rule.
Navigating the ripple effect of unpaid medical debt
The new medical debt-credit report rule could present a whole host of patient collection challenges for today’s medical practices. Partnering with the right revenue cycle management vendor sets providers up for success during uncertain times. Learn how Global Healthcare Resource can help.