Ambulatory surgery center leaders often assume acquiring bad debt is part of doing business. However, it isn't a necessary byproduct of the industry. Clint Sallee, President and CEO of Fidelity Creditor Service, discusses the misconceptions about bad debt and how ASCs can avoid it in the future. Sign up for our FREE E-Weekly for more coverage like this sent to your inbox!
1. Gather proper information upfront. Centers that gather all necessary information from patients before services are rendered can go after payment if the account becomes delinquent. A new trend among seasoned debtors is to receive services and then claim identify theft when creditors come knocking.
"The law has changed and now surgery centers have the threat of the patient saying it wasn't them that received the services, so you have to prove you saw that patient," says Mr. Sallee. "We recommend taking a copy of the patient's photo ID so you have their license identification information."
In one day this past month, Mr. Sallee had three clients report former patients were claiming identity theft. "It's becoming increasingly common," he says. "If you go online and search 'How do I beat collections' you'll see how popular this has become. It's an emerging and unfortunate trend."
2. Develop proper steps for recovering payment. Every surgery center has a slightly different collections process. Regular reviews of the internal collection process help administrators find room for improvement.
"A lot of our clients have been in business for a long time and send out the bill on the first of the month, then the second month and then the third," says Mr. Sallee. "The days of people paying off of letters have passed. Send a letter and conduct a follow up call two weeks out and a secondary follow up two weeks after that."
If the patient hasn't responded within a 30 day period, escalate the account. "The worst possible thing you can do is just let it sit there and do nothing," he says.
3. Know when to escalate the account. The longer a claim remains unpaid, the more difficult it will be to collect on. Sometimes turning over the account to a third party collections agency sooner in the process can produce results, but other times escalating to a small claims court is the better option.
"If someone owes you $15,000 for a surgical procedure and it isn't paid, maybe the appropriate escalation is sending it to the small claims court," says Mr. Sallee. "Not every bill that gets paid should go to a collection agency. Have an internal process to flag it and address it in a timely fashion. Don't wait until the end of the year."
Mr. Sallee has seen clients who once waited for six months to assign bad debt to a collections company now escalate the account within two or three months and triple their return rates. At the same time, other clients who chose not to pursue these accounts more quickly and saw stagnant rates of recovery.
4. Perform front-end credit reviews. Some ambulatory surgery centers, especially those with elective procedures, are now performing front-end credit reviews on patients. "The surgery centers with these elective procedures might require payment in advance," says Mr. Sallee. "There are some that work with insurance companies and some that don't."
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