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You may be wondering why physicians don’t report such debts to credit bureaus. As caring individuals, this sometimes feels like a practice that’s at odds with their profession. One of Emerald’s recent clients acts as an excellent example of this. As a group of physicians with an excellent reputation in their community, they dedicated themselves to building good relationships with their patients.
When the time came for them to challenge unpaid bills, they felt as though approaching a credit bureau would damage that reputation. In response to this, we honored their decision and turned off credit bureau reporting for their services. In the meantime, we continued trying to collect their debts.
Six months after that same group of physicians began working with us, we recovered 27% of their bad debts. At first glance, this debt recovery percentage seems impressive, especially as there’s a limited service provision in their area. But when you dig deeper into the figures, they’re not as impressive as they first seem.
Many of the practice's patients came from an area where the median-level household income is much higher than the national average. That means they’re more than capable of paying their medical bills without experiencing financial hardship elsewhere.
Based on our professional experience, credit bureau reporting makes a significant difference to debt recovery success in such areas. For physicians, this is sometimes challenging, as they’re focused on delivering patient centered care. At the same time, there’s a need to recognize that recovering that money means they’re able to reinvest into their businesses and continue delivering excellent care for all their patients.
Have you been operating with an understaffed department? Are your 60-120-day buckets getting larger and larger? Do you have way too many manual processes? Were you nodding at any of these questions as you were reading them?
Five years after our debt collection services began, the clients in question were bought out by a much larger healthcare organization. The organization that bought them out remained keen to regain the funds that were due to them. This organization used another agency that always reported to the credit bureau and appeared to have a much higher success rate. Upon seeing their success, the group of physicians that was previously reluctant to make a report decided to include credit bureau reporting.
Within a few months, their debt collection success rate rocketed. We saw a sharp increase of 17% on top of the original 27%. It appears that the idea of credit report damage is enough to spur most patients into action when they’ve failed to pay their bills.
In an ideal world, no group of physicians would need to use credit bureau reporting to spur their patients into meeting their payment terms. However, when you don’t take affirmative action, the financial losses you encounter harm your practice as a whole. This means you’re unable to reinvest, which could hurt other patients if it results in a lack of reinvestment in new services.
Although we can achieve a lot as a collections agency, some people are wise to the idea that their credit score won’t suffer. When faced with the prospect of credit restriction due to credit bureau reporting, they begin paying their bills as previously agreed with their clinician.
In order to protect your practice, credit bureau reporting becomes necessary. It allows you to reinvest money and keeps your business moving forward.
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