Patient Access Monthly Journal
Source: The Academy of Healthcare Revenue

Prevent Bad Debt By Assessing Patients’ Payment History

Patient access representatives are often the first face-to-face point of contact patients have with a hospital.  However, sometimes the patients who arrive for treatment have received services from the hospital before—and have failed to pay their financial responsibilities.  The question of how best to serve these patients has become more important for providers as margins grow tighter and as hospitals’ financial health must be balanced with providing high-quality healthcare for all patients who need it.  Patients who have failed to pay their portion of healthcare costs in the past pose a conundrum for healthcare providers—at best-performing facilities, patient access staff members are frequently the ones who identify these patients, assess the situation, and determine which course of action to take.  By providing these staff members with consistent policies and effective tools, patient access staff can consistently identify patients with a history of bad debt and take strategic steps to protect the organization from incurring further uncompensated care. 

Accurately identifying patients with a history of bad debt is the central issue.  In order to do this effectively, patient access staff must have clear visibility into each patient’s payment history.  Consistently reviewing each patient’s payment history and other information, such as credit scores, also helps registrars and patient financial counselors to more accurately and reliably identify patients who qualify for charity care or financial assistance.  With this insight into each patient’s account history and ability to pay for services, patient access staff members are placed in a better and more informed position to help all patients resolve their accounts.  Additionally, consistently identifying patients who are eligible for financial assistance enables hospitals to better allocate their billing and collection resources, focusing collection efforts on the accounts of patients who are able to pay—and providing financial assistance to those who are not. 

For organizations to check each and every patient account history would be an extremely time-consuming and labor-intensive task if manual methods were used.  This type of data tracking and checking is most efficient when the task is automated.  One healthcare organization that implemented real-time patient financial data tracking is Birmingham, Alabama-based Baptist Health System.  Using the system, the five-hospital health system was able to reduce their bad debt by almost six percent.1

For organizations to implement expanded front-end patient account data checks, several steps must be taken.  First, it is important to identify the specific data in patients’ payment histories that will be tracked and used to guide front-line staff members’ interactions at point of service.  Once the pertinent patient financial information to be tracked has been identified, integrate the system where this information is stored, such as the master patient index, with scheduling and registration systems.  For instance, organizations can configure their registration systems to flag patients who have previously accumulated bad debt or who have previously qualified for charity care or other financial assistance, so that patient access staff members are alerted when these patients return to receive further treatments. 

One organization that makes use of their IT systems to alert patient access staff members about incoming patients with bad debt is Brighton, Colorado-based Platte Valley Medical Center, a 58-bed, freestanding non-profit community hospital.  Platte Valley’s staff members check the registration information of patients who are arriving for non-emergent services in the organization’s Master Patient Index.  If a patient has accumulated bad debt in the past, the system flags the patient’s name with a flashing red indicator.  This lets patient access staff members know that they should refer these patients to financial counselors so that they can discuss their balances and make payment arrangements.  As the financial counselors interview the patients, they view patients’ financial information using a third-party vendor’s software solution that performs a “soft” credit score hit that does not reflect on patients’ credit reports.  This helps patient financial counselors to assess patients’ ability to pay and determine the best course of action to take with each patient.

In addition to utilizing automated tracking tools, staff members in both pre-registration and registration should be trained on specific steps to take based on the alerts they receive.  For instance, staff members should be trained to always send patients who have previously accumulated bad debt to financial counseling before scheduling these patients for non-emergent services. 

1. Philip Betbeze, “How Do You Fight Bad Debt?” HealthLeaders, February 2007.

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