One of the worst things that can happen to a healthcare business is the accumulation of bad debt. Bad debt is a common phrase in business, but physicians with little business ownership experience may wonder, “what is bad debt in healthcare?”
At PracticeForces, we support businesses by removing the hassle of billing, coding, and tracking denials in medical billing. We are the experts on all things related to medical bills. We’ll explain bad debt and give you tips on how to avoid it.
What Is Bad Debt?
Bad debt is the cost of a treatment that a patient cannot pay. Physicians consider this money unrecoverable and label it as bad debt. Often, bad debt only accumulates from patients that can’t afford to pay, rather than patients who refuse to pay–most frequently, uninsured patients.
Unfortunately, because of high-deductible health plans, patients are responsible for paying more significant shares of their bills. When they cannot afford the high costs of medical procedures, the lack of payment significantly strains healthcare providers.
Tips for Reducing Bad Debt Exposure
Now that we’ve answered, “what is bad debt in healthcare?” we’ll look at ways to help healthcare providers avoid accumulating it. We want to help you reduce bad debt in your practice so you can get paid and patients get the care they deserve.
Catch It Early
An early-intervention system will help you identify patients who may be sources of bad debt. By spotting these patients in advance, you can take steps to avoid accumulating bad debt. Gather details about their finances and insurance so you can work with them to set up payment plans or deposits that cover most of the costs.
Communicate With Patients
Being honest with patients about treatment costs upfront will help you collect payment in the long run. Patients that can’t afford the expenses of presented treatment options out-of-pocket can review alternative, cheaper treatment methods with you.
Leverage Technology To Avoid Debt
One cause of bad debt accumulation is how long it takes to verify insurance information. If you can confirm information before treatment, you’ll get paid sooner. Using patient portals to allow them to input their data before their visit lets you plan treatment costs while considering insurance.
Determine the Costs of Care
There’s no one-size-fits-all method regarding care and how much it costs. While you may want to have standard rates for your services, it’s best to take a more individualized approach and consider each patient. The more flexible you are when determining treatment costs, the more likely you will receive payment.
Let Us Keep You Safe From Bad Debt
So what is bad debt in healthcare? It is detrimental to your business. Accumulating too much bad debt can kill your business or keep you from having a healthy work life.
PracticeForces works to keep doctors from experiencing too much bad debt by removing every challenge in healthcare RCM. We work to automate your patient balances and help you avoid bad debt expense. Let us help your business thrive!
If you’re ready to set up RCM services for your business, call PracticeForces at (727) 499-0351.