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Health provider looks for outside help regarding debt collections

One small health care provider claims to have lost more than three percent of their revenue due to unpaid bills. The business feels particularly affected because, due to the nature of their business, they cannot and will not turn patients away who may prove to be bad risks.

There is also concern on the part of the provider about bad debt continually increasing. As we have also seen in California, this is due in part to the nature of the economy and because of changes in the healthcare laws. More of the burden for payment is being placed upon the patients whom the provider sees.

Though the provider does offer what is called charity care for low-income patients, this does not lessen the problems concerning bad debt. Any revenue lost due to such a program has to be made up in other ways. This could involve the raising of rates for other patients who in turn may end up not paying their bills.

The Chief Financial Officer for this outfit notes how the handling of bad debt has changed for the healthcare industry during the past few years. At one time the provider had done all of its collection work in-house. However, they feel that the use of a third-party to collect debts is becoming much more essential. The CFO emphasizes how outside collectors have the time and resources that the provider may not have to collect on these debts.

However, not every third-party debt collection agency is actually qualified to perform this sort of work. Debt collection attorneys understand the laws and revolve their practice around what is best for their clients. As in all aspects of business when utilizing the assistance of a third-party, it is essential that the practices of the third-party debt collector be professional. Besides debt collections, those in charge of the debt collections must protect the "public relations" for the company that they are doing business.

Source: LaCrosse Tribune, "Debt collections going more and more to third-party agencies," Nathan Hanson, Aug. 11, 2013