Collector - May 2015

The Affordable Care Act has made health insurance more accessible and affordable for many consumers, but it has also introduced new challenges for the collection industry.

Section 501(r), which brings many compliance requirements for tax-exempt hospitals, has had a ripple effect on their collection partners.

For providers and patients—and of course, collectors operating in the nonprofit hospital revenue cycle—the effects of the Affordable Care Act and 501(r) are far reaching.

The Compliance Cloud Silver Lining

While hospitals struggle to comply with 501(r) regulations, their collection agency partners can use this opportunity to review their processes as well as introduce new technology.

The White House reports that approximately 11. 4 million Americans are now signed up for private health coverage in response to the Affordable Care Act. Speaking at a recent Billing Tree webinar, Pam Kirchner, CEO of BCA Financial Services, noted that volumes of insurance transactions passing through the hospital cycle will increase by 20 percent as a result of the act.

Previously, medical debt was often incurred by those self-paying their healthcare bills. Under the Affordable Care Act, many patients previously categorized as self-pay have become self-pay after insurance.

“In the future, a greater percentage of debt will come from those with insurance coverage, as a result the probability of collection is potentially higher,” Kirchner said.

The ripple effect is that healthcare
providers experiencing high
volumes of transactions lack the
resources and technology to
process them at a low per-unit
cost. This presents a huge
opportunity for those operating
in medical collections who are
already equipped to offer
efficient processing services.

Lower Effort, Increased Settlements

In today’s digital age, patients are looking for more convenient, less frustrating ways to pay their bills—meaning those in healthcare collections offering multiple payment options have a business edge.

Research from The Corporate Executive Board indicates that 88 percent of consumers are more likely to spend money when they have low-effort interactions with businesses. Applied to the collection space, it follows that the less effort required by consumers to pay a bill, the more likely they are to attempt to pay it.

There are a number of technology options collection agencies can explore to make the payment process easier on consumers. For instance, automating debt payments means patients have the choice to pay at their convenience—no longer enduring time-consuming interactions with live agents.

Agencies working in healthcare collections that offer a wider variety of payment options save on resources and often see an increase in settled payments.

More traditional forms of payment,
like paper checks—a popular offering
in healthcare payments—require
manual processing, making them time
consuming. They also carry the
possibility of fraud via interception and
alteration.

Depending on their size and market, collection agencies usually offer several payment options. A multiple response poll during the Billing Tree webinar found that 49 percent of attendees offered agent-assisted phone payments, 40 percent offered Web payments and just 9 percent offered automatic IVR, while 43 percent said they provided all three.

These responses indicate that despite increasing payment options, there is still an industry reliance on more traditional forms of payment, such as agent-assisted phone. By integrating technologies such as Web and particularly IVR for payment acceptance, which appears to currently have relatively lower utilization rate today, providers can offer 24/7 automatic customer service and