By Laura J. Lowenstein, Esq.                                                  


This past June some interesting data was released at the 2017 Healthcare Financial Management Association’s (HFMA) Annual National Institute and every physician, practice group and medical facility needs to take notice.

According to HFMA, approximately 68% of patients with medical bills of $500 or less did not pay their full balance off in 2016.  This is an increase of 15% and 19% from 2015 and 2014, respectively, in rates of default.  As the amount of the bills increased, the percentages only grow.  For example, for hospital bills greater than or equal to $3,000, 99% were not paid in full in 2016.  The general consensus for the rise in this default rate has been the approximately 20% increase in patient responsibility and cost-sharing over the last few years.  

More troubling than the hard numbers is the prediction by some that this is a trend only at its preliminary stages.  Specifically, TransUnion Healthcare’s analysis projects that over the next 2.5 years, the percentage of patients that will not pay off their medical bills in full will rise to 95%.  That is simply a staggering figure in the default world.

While hospitals have increasingly written off unpaid bills as bad debt or charity care, the trend is one that will be unsustainable through write offs alone.  Hospitals and medical facilities will have to apply solutions-based systems that increase payments and lower default rates.  Through better intake paperwork, credit checks, financial assistance and counseling programs as well as integrated full-spectrum collections, steps can be taken to insulate against this trend.

If we don’t create a more balanced system of compensation for services rendered – through a combination of smart legislation and integrated hospital-based and third party collection systems on covered care and patient responsibility amounts – we will quickly find ourselves with a financially unsustainable healthcare system that will ultimately hurt us all.


For more information on Capital Resource Management, Inc. and how we help providers, medical facilities and government agencies generate revenue through better financial practices and compliant medical collections, please contact us at 1-844-277-3277.

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