The ACA is one of the most important regulatory overhauls of the US healthcare system. The act means the cost of healthcare insurance is reduced, making it affordable to more citizens than ever before. For providers and patients and for the subject of this blog, collectors, the effects of the ACA are far reaching.
At a recent BillingTree webinar Pam Kirchner, CEO of BCA Financial Services, told an audience of over 100 that volumes of insurance transactions passing through the hospital cycle will increase by 20 percent.
Previously, medical debt was often incurred by those self-paying their healthcare bills. Under the ACA many patients previously categorized as self-pay become self-pay after insurance.
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“In the future a greater percentage of debt will come from those with insurance coverage, as a result the probability of collection is potentially higher,” said Pam Kirchner.
The ripple effect is that providers experiencing high volumes of transactions lack the resources and technology to process them at a low per unit cost. This presents opportunity for those operating in medical collections who are already equipped to offer efficient, low-cost processing services.
Less Frustration – More Payments
In today's digital age patients are looking for more convenient, less frustrating, ways to pay their bills, so healthcare providers and collectors offering 'omnichannel payment' options have an edge.
Older, more traditional forms of payment like paper checks require manual processing, making them time consuming for staff and also carry the possibility of fraud via interception and alteration. By automating debt payments, patients pay at their convenience and no longer endure time consuming interactions with a 'live' agent. Providers and vendors offering a wider variety of payment options save on resources and often see an increase in settled payments.
Opportunity to Grow – Low Take-up of New Technology Such as IVR
A multiple response poll during the webinar found 49 percent of attendees offered agent assisted phone payments, 40% web payments, just 9% automatic IVR while 43 percent said they provided all three.
These responses show despite increasing payment options there is still an industry reliance on more traditional forms of payment like agent assisted phone. By integrating web and particularly IVR for payment acceptance, which appears to currently have relatively lower utilization, providers can offer 24/7 automatic customer service and support -- increasing settlements while saving costs.
FSA/HSA – Missed Opportunities?
Alongside the ACA healthcare insurance increase, the number of Health Savings and Flexible Spending accounts are rising. Employees can deposit tax-free funds into these accounts taken from their gross income. Individuals enrolled in a high-deductible health insurance policy automatically qualify for an HSA. FSAs can be used for healthcare and childcare, but unlike HSAs, a balance cannot roll over from year to year.
The growing popularity of these accounts has been spotted by some healthcare receivables agencies – 52 percent of our webinar attendees said they already take payments from either. Yet 45 percent said they would like to but didn't currently and 3 percent wouldn't want to at all. We can see here how reacting quickly to new trends in the healthcare industry can keep collectors ahead of competition!
Compliance
The ACA also brings some compliance requirements for tax-exempt hospitals and their collection partners to consider under section 501(r). Hospitals must have a visible and accessible Financial Assistance Policy (FAP) as part of their credit and collection policy. Extraordinary Collection Activity (ECA) impacts collectors most. Providers are responsible if they or third party vendors (collectors) violate the ECA rules outlined by the IRS.
This demonstrates why communication between provider and collector is key to 501(r) compliance. A hospital must immediately notify a vendor if it receives any Financial Assistance application, this ensures ECAs cease and both parties remain compliant.
Dave Yohe is head of corporate marketing at BillingTree.
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