21% of hospitals don't have a bad debt recovery strategy, survey finds

Though hospitals continue to grapple with bad debt, some still have not implemented recovery efforts, according to a new survey.

The May survey — developed and administered by Sage Growth Partners on behalf of healthcare technology company Dorado Systems — includes 100 responses from hospital C-suite executives and finance leaders.

Here are nine survey findings:

Causes of bad debt

1. More than half of respondents (59 percent) said the largest contributing factor to bad debt is insurance reform.

2. Leaders at smaller hospitals especially believe insurance reform is the largest contributing factor, the survey showed. Seventy-five percent of respondents at hospitals with 50 to 100 beds and 68 percent at hospitals with less than 50 beds blamed reform for bad debt.

3. Respondents put patient delinquency farther down on the list of contributing factors, with only 17 percent attributing bad debt to that issue. Respondents also reported ineffective facility-specific revenue cycle management processes (11 percent); industrywide RCM complexities and regulations (10 percent); changes in reimbursement models (2 percent); and a high poverty rate (1 percent) among the causes of bad debt.

4. Eighty-one percent of the respondents who said internal RCM processes was the largest contributing factor to bad debt were C-suite executives such as CEOs, CFOs and COOs.

Recovering bad debt

5. Half of respondents said they expect to recover only up to 10 percent of their bad debt from payers and self-pay patients. Forty percent said they expect to recover between 10 percent and 20 percent. Only 9 percent said they expect to recover 20 percent or more.

6. A majority of respondents (64 percent) said their organizations' bad debt does not exceed $10 million. Thirty-six percent said their organization's bad debt exceeds $10 million, while 20 percent said it's between $10 million and $30 million. Only 10 percent said it's between $30 million and $50 million, and only 6 percent said it exceeds $50 million.

7. Twenty-one percent of respondents aren't using an in-house process or a third-party vendor to recover bad debt.

8. Thirty-six percent of respondents use a third-party vendor to recover bad debt, and 25 percent use an in-house process to do so. Only 18 percent use both.

9. Eighteen percent of respondents said they do not re-check patient insurance eligibility.


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