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How to Score Medical Debt for Collection

by John Galt
  • Overview

    Healthcare providers often end up with unpaid receivables. Portions of the invoice that are not covered by insurance are termed "self-pay" obligations, and they are payable directly by the patient. Should the patient default on the obligation, then collection activity must ensue to get the receivable paid. According to Msnbc.com, unpaid medical debt is a key cause behind the failure of healthcare institutions around the country. Scoring medical debt entails determining which accounts will have a higher likelihood of paying. This allows you to better focus your collection resources and efforts by concentrating on accounts likely to pay.
 
  • Step 1

    Pull the credit bureau report of each debtor within your portfolio of unpaid claims. Set aside all patients with outstanding IRS tax liens or large unpaid civil judgements. Set aside patients who have a credit score in the lower quartile of the current credit score national averages. Exclude entirely from the portfolio any patients who have filed for bankruptcy after the date the healthcare services were provided.
  • Step 2

    Review the balances owed by each patient remaining in the portfolio. Exclude accounts with low balances, such as those less than $50. Exclude entirely debtors paying minimum balances, such as less than $10. Review the employment status listed by the credit bureau of debtors who have not been set aside or excluded in any of the previous steps. Identify those patients with employment. Set aside those who are currently unemployed.
  • Step 3

    Call the human resources department of each employed debtor's employer. Inquire as to the salary range paid for the position the debtor holds, but conform to the Fair Debt Collection Practices Act (FDCPA) which requires you not to divulge that you are calling in reference to the given individual employee. Score the portfolio, with the highest earning debtors being at the top. Commence collection efforts starting at the top of this list and working your way down. Expend any remaining collections resources on accounts previously set aside by the scoring process only after the high-score list is exhausted.
  • 4
  • A creditor account with a major credit bureau Database software such as Excel
  • A creditor account with a major credit bureau
  • Database software such as Excel
  • Outside collection agencies could be a more cost-effective solution for dealing with unpaid healthcare receivables. Obtaining current contact information prior to the provision of healthcare services can help to facilitate any eventual collections.
  • Outside collection agencies could be a more cost-effective solution for dealing with unpaid healthcare receivables.
  • Obtaining current contact information prior to the provision of healthcare services can help to facilitate any eventual collections.
  • Always adhere to the FDCPA and applicable state laws during all phases of the collections process. Take the requisite steps to protect any patient financial data assembled during the scoring and collection process.
  • Always adhere to the FDCPA and applicable state laws during all phases of the collections process.
  • Take the requisite steps to protect any patient financial data assembled during the scoring and collection process.

References & Resources