In the past year, new regulations were introduced that work in favor of the patient when it comes to paying up on outstanding hospital bills. About 60% of the nation's hospitals were affected by the new rules introduced by the IRS that impose clearer guidelines around hospital billing and collections efforts for hospitals that want to maintain their tax-exempt status.
Section 501(r) is a lesson not only for nonprofit hospitals, but for all hospital organizations that are making outrageous and aggressive collection actions. These tactics are not sustainable; and in order to create sustainable patient payments, a patient-friendly payment plan must be implemented.
The Patient Payment Crisis For Hospitals
According a recent Black Book Survey report, outstanding patient balances account for 57% of hospital bad debt. That's huge! And that number is only expected to increase as patient's struggle to pay their high deductible insurance plans and postpone necessary medical visits. This leaves cause for worry--not just for patients struggling to pay their bills, but for the struggling hospital that is looking for new ways to encourage patient payments and get out of the red. An overwhelming 86% of hospital CFOs of struggling hospitals say that they must leverage next generation technologies such as software and outsourced services to remain solvent. The patient payment crisis is real, and will only continue to develop if hospital financial leaders don't take action now.
Where Advanced Patient Payment Solutions Come In
To combat this crisis, hospital leaders must look to new solutions in both technology and strategy. It is not enough to simply invest in a software platform that will be underutilized or mismanaged by billing staff. There has to be a strategy in place for patient collections to be successful. To illustrate this relationship between technology and strategy, here is an example of how a card on file payment system works to collect patient bad debt.
Invest in Technology
The credit card on file payment software is the easiest investment a hospital system can make when looking to update their outdated payment systems. It integrates directly with EHR systems, and allows staff to easily process and post patient payments, set up payment plans, and monitor ongoing collection efforts.
Invest in Strategy
Credit card on file is so successful because of the strategy and processes that come with it. Technology is great and can be successful on its' own, but when it comes to patient payments, a patient-friendly strategy must be implemented into the process. Patient engagement is more important now than ever before, as patients have more options for care and value a health system that helps them navigate the complicated healthcare industry. To make patient payments successful in your hospital system, patient-friendly messaging and practices must be implemented. This requires staff training and an emphasis from top leadership on the importance of creating a patient-friendly collections culture. Strategy around patient collections, for any healthcare organization, is the key to sustainable patient payments.
As hospitals continue to face a patient collections crisis and costs continue to rise, financial leaders must look to investment in new technology and strategies. Just as a hospital system would invest in new equipment and technology in the exam room, in order to remain solvent in the coming years, the same priority must be given to patient payment technology and processes.
Consider how a card on file payment solution can fit into your hospital system, download the eBook below to learn more.