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Hospital bad debt is one of the major reasons for hospital closings all over the United States. As more Americans with little or no health coverage use emergency room facilities for the treatment of illnesses, hospital administrators are finding it very difficult to recover the costs for these treatments.

There is also a decline in patients with adequate health coverage visiting doctor’s offices, as illnesses tend to go untreated until they become serious. Many of these are minor and preventable illnesses, which if treated earlier would probably result in lower medical bills.

With a growing economic recession, many of these patients either have no health coverage, are under-insured and/or they’ve recently lost their jobs. Because of these, fewer patients are able to afford the costs for hospital treatment.

Patients dont tend to think about the high cost of the equipment involved in their treatment, nor do they consider how the facility will pay the wages for all the staff who participated in their hospital stay.

Unfortunately, without adequate debt recovery methods in place, many hospitals are putting off replacing much-needed diagnostic equipment. Others are putting off staff and delaying vital upgrades. Still others may also end up closing their doors unless ways can be found to recover hospital bad debt.

Below are 4 tips for reducing or recouping hospital bad debt:

1. Payment Plan

Many fear large medical debts, in that large medical bills can seem impossible to ever pay off. By instituting payment arrangements, patients can make smaller, more manageable payments. Hospitals can recoup some of their bad debt and create positive cash flow.

2. Clear Payment Policies

Clearly stated payment policies should be part of your internal collections procedures. Patients need to know and understand these policies. There isn’t a problem as long as payments are made, and on time. However, should a patient fall behind in their payments, you need to make them aware that full payment will become due. If delinquencies fall further behind, patients should also know that these accounts will be forwarded to outside collection agencies to recoup the bad debt.

3. Financial Counseling

Offering financial counseling to patients will improve the repayment rate and reduce the overall amount of bad debt that would normally be written off. This counseling can also help them to re-prioritize their budgeting, and possibly help them to find ways to resume their payment plans.

4. Third Party Collection Agencies

For any accounts that are delinquent and the patient is making no attempt to forward partial payments, consider hiring debt collection agencies to pursue any outstanding accounts.

Collection agencies are efficient and professional, and can help recover the delinquent debts of hospitals, medical clinics and doctor’s offices.

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