The word from HFMA ANI: Collections business changes underway

Folks, when it comes to patient collections, it seems we're not in Kansas any more. If the feedback I got at this year's HFMA ANI 2008 show is any indication, some big shifts are underway in how hospitals, in particular, manage their self-pay patients.

For one thing, the way collections agencies get paid may be changing. According to my unscientific survey of collection agencies pitching their wares at the show, agencies are increasingly buying hospital debt outright, rather than working strictly on commission. It's hard to predict what consequences this will have. While putting agencies on commission may encourage overly aggressive tactics, selling off debt leads to some ticklish problems of its own. After all, companies that buy the debt have to recoup their expenses somehow, and that leads to hard-nosed tactics, too.

Another sign of the times is that while it's still unusual, it's becoming increasingly common for collections companies to rate debtors by some form of credit-scoring criteria to figure out how best to invest their energies. A few collections execs told me it's prohibitively expensive to pay for such data, others said it's the wave of the future. (Small wonder that credit-scoring giant TransUnion had a presence at the show.)

Then, there's the matter of designing a kinder, gentler way of getting money. After all, hospitals can't afford to permanently alienate too many patients, as they'll probably see those patients again. Besides, there's a need for non-profit hospitals to pursue money, well, tastefully--for lack of a better word. While hospitals are getting drubbed by financial analysts for letting bad debt levels grow, non-profits can't afford to seem shark-like in their tactics. After all, federal legislators like Sen. Chuck Grassley already seem convinced that many don't deserve their tax-free status--and the pressure on non-profits could get even tougher when a new president is elected.

In the mean time, the industry seems to be moving quickly to align itself to the new realities of self-pay debt. It will be interesting to see whether any of these tactics gets the job done better than the efforts providers have made in the past. - Anne