Reduce bad receivables through these simple tips.
Medical companies often find themselves strangled with bad debts. The reasons are simple: the claims are rejected; the insurance companies don’t deem the services payable, or the medical staff wasn’t trained well to collect payments. But these bad debts can be minimized through these simple ways.
Reducing Claim Rejections
The most common reason for claim denials is the lack of information available in the application. The physicians didn’t fill the claim application correctly and the insurance company, therefore, rejected it. A rejected claim costs around $30 to the healthcare unit. MGMA, the medical management group, states that the denial rate should be less than 5 percent. Whereas, most medical units have denial rate reaching up to 25 percent, which is an overhead on the already piling operational cost. The lack of information can be fixed by hiring well trained coders in-house or outsourcing to the specialist Medical billing companies. Nevertheless, it is worth mentioning that hiring and training a coder is a costly practice. Hence outsourcing to the medical billing companies is not only cost-effective but also significantly reduce the risk of bad receivables. Some of the tips to avoid bad debt are discussed below;
Avoiding Bad Debt
Many insurance companies have mentioned the type of services they are entitled to pay for, in their agreement with the medical units. While filling out the claims, most medical units include services that are outside of the agreement, which leads to claim rejection. It is not that these services won’t be paid for, but these services can only be paid by the patients themselves and not their insurance companies. Therefore, it is the duty of the medical providers to ask patients if they will be willing to pay for the services upfront to avoid bad debts.
Another reason leading to bad receivables is the ‘collections culture’ in most healthcare units. The healthcare professionals enter the field to treat patients and are not trained to collect payment for doing so. But getting payments for their services is crucial for a successful practice and to provide better healthcare. Therefore, the billing and collection staff within Healthcare units need to be trained and provided with the right tools to collect payments. All patients’ accounts that are in bad debt should be reviewed to see if any chances of recovery are available. In most cases, the patients are willing to work with the medical units, if they are shown the way. The adequate training to the staff, especially the medical billers will help best in this regard.