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How to Drive Patient Payments Despite Impending FICO Changes

HostageThere’s no question medical debt is unique, namely because patient billing is unlike billing in any other industry. Put yourself in the patient’s shoes for a moment and answer the following multiple choice question: Just how different is medical debt from other types of debt?

a) It is traditionally incurred (or at least, you’re made aware of it) long after time of service
b) It can be an unfortunate surprise, costing more than you’d thought
c) You may be paying for something unplanned – and a “necessary evil” rather than something you emotionally want to buy (at least, not like you want a new car or the iPhone 6)
d) All of the above

If you guessed “all of the above,” then you must be a revenue cycle expert! Yes, all of these factors can be true, which means patients can easily have different behaviors toward their financial responsibility. Further, they may not even understand how much they owe.

Therein lies the reason for a change that may greatly impact providers’ collection efforts.

In a recent American Public Media report, FICO senior consumer credit specialist Anthony Sprauve indicates that in the future, patients may be able to incur medical debt without impacting their credit rating. He cites potential confusion over amounts owed as the primary driver for this change, indicating, “Ignorance isn’t a good reason for giving someone a lower FICO score.”

If FICO implements this change, patients will have less incentive to pay medical bills. That’s why proactive policies and processes that begin pre-service – setting expectations for payment and generating credible estimates – are more necessary than ever. Practices must leverage technology to automate the payment process until the patient’s final balance is paid, using payment plans and online bill pay.

The good news: Patients receiving quality care are loyal to their physicians, with good reason. While they may seek out the cheapest gas station in their neighborhood or leave Nordstrom to shop at Old Navy, they’re likely not going to walk out of your practice and go elsewhere. Especially if they understand their estimated cost of care and payment responsibilities.

To learn some key strategies for improving patient collections at your healthcare organization, download the white paper authored by Elizabeth Woodcock, MBA, FACMPE, CPC, Patient Collections: Business Critical for Today’s Medical Practices.