Community hospitals are facing unprecedented financial challenges—challenges that began long before the pandemic. Because these organizations typically have a higher volume of self-pay patients, those challenges are likely to become even more difficult as the pandemic has caused equally significant financial challenges for consumers.
Prior to the pandemic, 68% of patients owing $500 or less did not pay the full balance of their hospital bills, and 77% made only a partial payment toward their balance.[1] Since the pandemic began, more than two million individuals with medical debt saw that debt go into collections.[2] In all, medical debt is estimated to have grown by $47 billion between January of 2020 and March of 2021.[3]
What can community hospitals do to protect their bottom line while providing consistent, high-quality care to the areas they serve? Many have turned to revenue cycle outsourcers to help with their collection efforts. However, it can be difficult to know how these partners are performing with limited insight into vendor processes and limited resources with which to manage these vendor relationships.
Today, more than ever, community hospitals need a way to ensure they’re receiving optimal value from their revenue cycle partners. It’s a challenge Tift Regional Health System knows all too well.
Tift Regional Health System (TRHS) is a not-for-profit hospital system serving 12 counties in South Central Georgia. TRHS has more than 135 physicians with expertise in over 30 specialties. The health system includes Tift Regional Medical Center, a 181-bed regional referral hospital located in Tifton, and Cook Medical Center, a 60-bed acute care facility located in Adel. Cook Medical Center also includes a 12-bed geriatric psychiatric unit and a 95-bed nursing home.
The TRHS service area is comprised of a large number of self-pay patients, so partnering with self-pay and collections outsourcers is essential to achieving their revenue goals. TRHS had worked with the same vendors for 15 years but suspected they were not achieving maximum return from those partnerships. An initial audit confirmed their belief; 68% of accounts were not being worked appropriately, and their self-pay vendor was actually collecting less than their bad-debt vendor.
TRHS engaged Healthfuse to help evaluate and update service level agreements for existing vendors to ensure maximum performance. Audits were conducted on each account, and corrective action plans were created for underperforming vendors. Healthfuse used its Vendor Source Knowledge Base to identify and implement new high-performing vendors with expertise in workers compensation, motor vehicle, and VA claims to improve collections in those accounts.
With Healthfuse, TRHS was able to implement a more effective vendor strategy and increase efficiency in its revenue cycle processes. TRHS has achieved improved performance of its existing vendors and developed partnerships with vendors known to deliver results.
To date, Healthfuse has delivered:
- $26M in collections improvements
- $619K in cost savings
We knew we had a lot of work to do to bring our collections where they needed to be to align with our revenue goals. With Healthfuse, we’ve been able to meet and exceed those goals.” Dennis Crum, Chief Financial Officer, Tift Regional Medical Center
The bottom line
Community hospitals need every dollar they’re owed, especially now. Achieving full financial recovery from the COVID-19 pandemic will take time and a lot of hard work, and revenue cycle outsourcers will play an invaluable role in this effort. With so much on the line, community hospitals need to ensure they’re receiving optimal performance from their revenue cycle vendors.
[1] https://newsroom.transunion.com/patients-may-be-the-new-payers-but-two-in-three-do-not-pay-their-hospital-bills-in-full/
[2] https://www.cbsnews.com/news/pandemic-medical-debt-overdue-debt-collectors
[3] https://www.cbsnews.com/news/pandemic-medical-debt-overdue-debt-collectors