Patient collections fall to 48%

The rate of patient collections fell from 54.8% in 2021 to 47.8% in 2022 and 2023, according to an analysis from Kodiak Solutions.

The analysis used patient financial transactions from over 1,850 hospitals and 350,000 physicians nationwide. 

Here are seven notes:

  1. Patient financial responsibility accounted for roughly $1.1 billion of over $5 billion in total payments received.

  2. Providers collected about $500.5 million for services rendered in 2022 and 2023, which was less than half owed.

  3. There was a clear line between what patients were likely to pay and avoid paying: Patients were likely to pay outstanding medical bills of $500 or less and less likely to pay bills over $500.

  4. Patient collection rates decreased, but the claim dollar amount owed increased.

  5. Lower patient collection rates increased bad debt for providers, which amounted to over $17.4 billion of bad debts in 2023.

  6. Self-pay patients had the highest percentage of bad debt write-offs for providers.

  7. About 53% of total bad debt write-offs in 2023 came from patients with some form of insurance, including commercial plans, managed care plans and Medicare.

Recently, hospitals have been scrutinized for how they handle patient debts and New York is considering a policy that would prevent hospitals from suing for medical debts for some patients. 

Over the last five years, Aurora, Colo.-based UCHealth has sued its patients 15,710 times for money that they owe to the health system, according to an investigation by several news outlets. The investigation also revealed that many of the lawsuits have been kept from public scrutiny due to UCHealth working with collection companies that file the lawsuits under their names, not the nonprofit health system's name.

St. Charles Health System, a private nonprofit system in Bend, Ore., has been named in a lawsuit after allegedly denying charity care to eligible patients.

New York Gov. Kathy Hochul proposed halting a policy requiring state-owned hospitals to file lawsuits against patients over medical debt. Ms. Hochul's proposal would prevent all hospitals from suing to collect medical debt from patients with income of under 400% of the poverty line. She has asked the New York legislature to pass a replacement policy during the state's budget process before using executive power to mandate her policy.

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