When it comes to recovering past due amount from debtors in health care industry, early intervention is extremely important compared to other industries. Let us share some interesting reasons behind it.
|Kinum Collection Agency is a leader in medical debt collections serving hundreds of practices all across USA. Diplomatic collection practices followed by our debt collectors helps to protect the valuable reputation of your healthcare practice. |
Regardless of the size of your healthcare practice Kinum delivers superior recovery rates from your accounts receivable. Kinum maintains a BBB rating of A+ and is affiliated to ACA International. Kinum is 100% HIPAA-compliant and a knowledgeable staff which does not indulge in unethical techniques.
Kinum offers both “Flat fees” and “Contingency only” options. Some debts are collected within days while others take longer. Every account assigned to Kinum if taken very seriously and maintains a high reputation in medical debt collections.
1. Why is there such an urgency to submit accounts early?
Here is a graph showing the probability of collecting money depending upon how old the debt is.
If a demand is raised within 30 days, the probability of recovering money is nearly 90%. If you wait for 6 months, the chances fall to about 50% and keeps falling there after. Flat fees services charged by a medical collection agency is extremely cheaper than engaging your own staff to handle these account receivables.
2. Keep your patients:
Pre-collections (or Step 1) and Soft collections (Step 2) play a vital role in Medical accounts receivables. These two steps attempt to put enough pressure on the patient to pay without annoying him. Lets look at this chart before we discuss further.
In Step 1, a total of five “reminder” calls/letters go out in your own name, in Step 2 about five more “collection” letters go out under collection agency’s name. Our recommendation is that, after 30 days of non-payment of the account, it should be forwarded to a collection agency for Step 1. For the next 90 days, the collection agency will tactfully send a total of 10 contacts and there is a 90% chance that you will recover your money. The verbiage of these contacts change from soft to intensive. If a patient pays you the amount-due during these 10 contacts, there is a high probability that you will not lose this patient and he/she will likely not spread a bad word about you since the collection was done in an amicable manner.
3. No one likes to pay for services.
Accept the fact, people pay straight up in cash for groceries, diapers, cigarettes, alcohol, restaurant bills etc. because they are getting a physical product in exchange for money. After getting a medical or dental treatment, a patient walks away with pretty much nothing. Willingness to pay for services goes down as the time passes by. It further becomes a lower priority if other kind of bills like auto-loan are also outstanding for your patient. With collection agency in the middle, it creates a sense of responsibility and fear in your patient’s mind, increasing your chances to get paid.
How to shortlist a medical collections agency:
- Select an agency which does not charge extra for Address Scrub, Bankruptcy Scrub and Litigious Defaulter Scrub in its Step 1 and Step 2, these costs quickly add up. The price per account ( with 5 contacts) varies between $28 to $9. More accounts you buy in one go, lower the pricing is.
- Most agencies charge separately for Step 1 and Step 2 services. Only a few companies offer a combo package of Step 1 and Step 2, resulting in cost savings for the doctor in the range of 30% – 40% vs when you buy separately.
- Select a medical collection agency which does both English and Spanish demands.
- Most agencies will expire your unused Step 1 and Step 2 accounts after 1 or 2 years. Only a handful of agencies have these accounts with no expiration date. Isn’t this awesome. You can buy larger chunk of accounts initially at a lower price and keep using them over the years.
- Many agencies will try to sell you contingency collection services directly (Step 3) even if your debt is less than 180 days old, which means they do not charge anything initially, but they keep about 40% to 50% of amount collected. This is a great deal for the collection agency but not for you. I repeat, Step 1 and Step 2 have a smaller up front cost, but they are drastically cost effective. Only, if a patient does not pay after Step 1 and Step 2, or you have put in enough efforts to collect money, only then assign it to Step 3. Another time this should be directly done is if the account is more than 5 or 6 months old.
- Will the agency report your defaulters to the Credit Bureaus after all collection efforts have exhausted, and you get to set that preference.
This article is equally applicable to all Medical, Dental, Vision, and Veterinary practices.