Debt collection is pretty complicated, especially when it comes to dealing with healthcare sectors. As a service provider, you must ensure you treat everyone fairly and equally—however, it’s easier than done. At times, collecting debt can be highly tedious too. Any professional debt recovery services will run as many approaches as possible to initiate the payment process. Remember, some methods work much better than others. Going for the best strategy can bring a difference.
In this blog, we’ll focus on the top approaches a healthcare debt collection runs in order to secure payments. Now, let us find out the most effective ways of getting paid.
Automated digital outreach
There are smart digital tools that debt recovery services use for debt collection. It combines the power of automation with human expertise and delivers more personalized messages. It’s an answer to the challenge of high data volumes still meeting consumers’ expectations who want more personal interactions at their convenient times.
Healthcare debt collections firms utilize automated texts and calls to empower collectors more effectively. It’s more about improving first-contact resolution rates and total collections.
The rise in AI is note-worthy. AI chatbots help automate the process of reaching out to customers, answering their questions, and giving them options for resolving their debt. They also provide information on payment plans or other options when it comes to settling debts. It’s a low-touch way to reach out to customers who don’t want to talk over the phone.
The chatbots can learn from previous interactions, allowing them to provide accurate answers to common queries. An AI-powered system learns from the customer’s behavior and incrementally improves the interactions and response rates.
Most healthcare debt collection agencies are now using Interactive Voice Response (IVR) to respond to calls through voice responses or by pressing buttons on their phones. With personalized interactions based on real-time insights into each customer’s situation based on preferences, you have the option to enhance the response rate and push the debtor to initiate payment.
Texting is definitely one of the most common ways to communicate with customers. Instead of calling, the debt recovery services team may send text messages to the debtor’s phones. It’s convenient as they can quickly send back a text response without taking the time out of their day to call back.
Calling directly allows you to speak with customers. Here you can resolve issues immediately. But you must also know that many debtors use a live screening option. This equally means there’s a high chance that the calls may get ignored. So you need to have the right approach when running a collection process.
Most medical debt collection will want to consider using live chat or text messaging before making direct phone calls because it allows you an opportunity to reach out in a more personal way without having them ignore the call.
Best resolution rates
While there are many ways to reach out and collect a debt, collection agencies broadly categorize them into digital and traditional means based on the response and resolution rates.
As per a recent report from McKinsey, when going with the digital-first approach, consumers are 12% more likely to receive a payment in early delinquency and 30% more in late delinquency. Interestingly, the percentage of customers who pay in total doubles through digital communication.
But, 66% of initiated communications from the creditors are through traditional means. Meanwhile, 48% of the phone calls have resulted in particular or full payment. Also, 77% of the debtors repaid either partially or fully when connected through text messages, and only 23% took no action.
Digital communication methods like mobile apps, push notifications, and online banking notifications have proven more effective than traditional means, especially when encouraging repayment.
These days consumers prefer to be contacted over emails, texts, and other digital means rather than phone calls for debt reminders and collections; as a result, it’s now high time for creditors to embrace digital technologies.
Changes in medical credit reporting
Everyone knows that the world of medical billing is highly complicated. Moreover, it’s hard enough to keep close track of all the details, especially with the patient’s insurance coverage. Interestingly, there has been a recent change in how medical debt shows up on credit reports.
The Consumer Financial Protection Bureau report clearly states medical debt affects every one in five Americans. Not only does it affect individuals financially, but it also has both mental and physical harm.
With such immense consequences, the government has taken steps to change how medical debt is perceived. As a healthcare practitioner, you must understand the changes that affect how you operate and get the debt owed. Paid medical debt will no longer negatively impact the credit report.
The change in medical billing on the person’s credit score means that bills will no longer affect a person’s ability to get loans or rent an apartment. Earlier, the medical debt would be on record for seven years even when it gets paid. But, the recent regulations have been effective since July 2022. As a result, the paid medical debt wouldn’t affect American consumers to obtain loans.
In fact, medical debt under $500 won’t be included in reports from the three main credit bureaus. Surprisingly, this decision is expected to remove around 70% of the medical collection debt from the credit reports.
What does a medical practitioner need to understand?
Healthcare debt collection agencies must educate their staff about the new billing regulations. The ‘No Surprise Act,’ which has been effective since January 1, 2022, is an important area of concern. As per the act, patients cannot receive surprise bills when obtaining emergency services from a facility or doctor that they didn’t know was out-of-network.
Healthcare facilities must ensure that they provide a ‘reasonable faith’ estimate to those who don’t have health insurance or don’t pay with health insurance. Meanwhile, the patient may dispute those charges if the final bill amount is $400 more than the estimation. The billing practices must comply with such regulations. Debt recovery services must create a robust system and educate the team to double-check and follow these regulations to the letter, so there’s zero violation on the practices’ side.
Choose a reliable collection firm
You can always take help from a reliable healthcare debt collection agency. First, however, you must make sure that they stick to the Fair Debt Collection Practices Act (FDCPA). The FDCPA runs stringent regulations about the frequency at which debt collectors can contact borrowers.
You must choose an agency that complies with FDCPA regulations, and it must be effective enough to recover a high amount of debt. From helping you with payment monitoring and HIPAA compliance to managing insurance denials and debt recovery, a professional service provider can help you through various aspects of medical billing and collections.
If there has been a significant amount of debt piling, it could put you at risk. With the help of debt recovery services, you can ensure that the debtors pay their bills and get back on track with their payments. Debt collection agencies work with the debtor to either pay off the debt or renegotiate the payment terms. However, managing delinquent accounts can be challenging for your business, especially when you devote many human resources to the task. Therefore, it is best to connect with the top healthcare debt collection firm and initiate payment as quickly as possible.