Canadian hospitals generate a great deal of receivables – hundreds to thousands of accounts that are sent to collections. However, these should be handled with care and a different strategy than regular third party collections clientele.
The bulk of accounts that a hospital may send are small balances – small amounts not covered by provincial insurance plans. These will be less than $100 balances for crutches, ambulance rides, casts, and so on. Literally hundreds of these invoices every month are generated by the hospital, far more than their patient accounts team can possibly call or letter personally. When these small accounts go to a collection agency, the agency can leverage economy of scale and call every single file, but the collection agent may very well be the first person the consumer speaks to regarding their bill.
At the other end of the spectrum, there are significantly higher balance accounts invoiced for private rooms or out of country coverage – these invoices can be thousands of dollars, but may involve language barriers, struggles with payment from private insurance companies, or patients needing to make payment arrangements on very large sums.
To add to this, many accounts will have guarantors who are also liable for balances, and in some cases minors may be listed in collections. Other accounts may also have been billed in error, such as patient transfers, or patients who have an exempt status for billing, which will require the agency to coordinate with patient accounts staff at the hospital and back out these files from collections without affecting the consumers’ credit rating.
These two different segments have different challenges for the collection agency, but at the same time have an overarching challenge – they need to be handled with good will and compassion. Many consumers are stressed with medical concerns, and should be approached softly. Escalation that might occur on a credit card or auto finance portfolio would be out of place for a similar balance owing to a hospital. Hospitals often rely on public donations and a pristine brand reputation with their community, so the collection agent has to walk a fine line between collecting the invoice and upholding the hospital’s reputation.
Another matter that should be addressed is medical privacy. The agent should know the visit or patient identification number, the date of visit, and the balance owed, but no medical details should be provided. The Privacy Commissioner of Canada’s office has weighed in on this, and medical information should have ‘lawful purpose’ – the collection agent does not need to know what medical procedures have been performed, so there is no purpose to providing that data and would infringe on the patient’s privacy -- https://www.ipc.on.ca/health-organizations/collection-use-and-disclosure-of-personal-health-information/.
If handled correctly, the majority of patients will feel a moral obligation to repay the hospital for medical services, and if presented properly, can be recovered without losing good will, liquidating anywhere from 20-45% on outstanding balances over 6-8 months from assignment to the agency. This can be achieved with SMS or email communications on the lower balance accounts to generate inbound contacts, and a compassionate and patient agent to provide human one-on-one contact with the patient.
I've worked with dozens of hospitals over the last thirty years, and a lot of what I've devleoped as a strategy comes from working with the accounting teams in these hospitals who are overworked and face some unique challenges. If you have questions about collection strategies around hospital accounts, by all means drop me an email, happy to share what I know.
Thanks kindly,
Blair DeMarco-Wettlaufer
KINGSTON Data &
Credit
Cambridge, Ontario
226-946-1730
bwettlaufer@kingstondc.com
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