In the current state of America’s healthcare system, medical debt/credit reporting is an unfortunate burden that impacts the livelihood of millions of ordinary people. Whether that’s from the ever-rising cost of healthcare or simply due to unforeseen emergencies, this privatized system leaves many individuals grappling with substantial medical debts.

Not only is this an undeniably distressing and troublesome time for your patients, but it also affects the very core of your medical practice and your daily operations.

As a medical provider, you naturally face a dual responsibility of both maintaining the financial viability of your practice and still providing quality care for all your patients.

Medical collection debt is no simple task to comprehend, though, yet having a firm understanding of the intricacies of medical debt and its impact on consumer credit reports is absolutely paramount if you’re looking to navigate these challenges effectively.

So, throughout this article, we’ll break down medical collections and their impact on a patient’s credit report – including how this affects your practice specifically.

Understanding Medical Debt

As you may already know, the term “medical debt” generally refers to any unpaid or simply outstanding bills due to any of the medical services rendered by your practice to patients. There are typically many expenses that can contribute to a patient’s medical bill, but some of the main ones include any expenses the patient has incurred for hospital visits, surgeries, or even things like diagnostic tests.

Though it’s not entirely obvious how this might affect smaller medical practices at first glance, medical debt is generally a fairly complex issue that indirectly impacts your financial stability and overall operations.

If any of the three major credit bureaus (Experian, Equifax or TransUnion) deem a patient to have a poor credit score, they’ll typically face difficulties when paying their medical bills promptly.

This usually results in more collection efforts and even revenue loss for your practice, so it’s in your interest to make sure your patients stay on the good side of credit reporting agencies.

The Root Causes

Let’s take a look at some of the main factors that contribute to medical debt among patients.

Insufficient or Lack of Health Insurance Coverage

Oftentimes, your patient’s health insurance company may not provide adequate coverage or high enough deductibles for their treatments, meaning the patient is left with out-of-pocket expenses they simply can’t afford to pay.

Rising Healthcare Costs

As mentioned, escalating healthcare costs, including fees for things like prescription drugs and specialized treatments, have a huge financial strain on patients, which causes them to accumulate medical debt.

Financial Consequences

So, what tangible impact can a patient’s medical debt have on your practice?

Revenue Loss for Practices

Generally speaking, unpaid medical bills directly impact the revenue streams of medical practices – smaller practices specifically – affecting their overall financial viability.

As a result, you can expect some hindrance when trying to invest in new equipment or staff.

Increased Administrative Burden

Aside from the more obvious impacts on your practice, dealing with medical debt actually requires a significant amount of administrative resources, including things like bill management, collections, and having to communicate directly with patients or other third-party payers.

Understandably, this diversion of resources is going to divert your attention away from providing patients with quality care.

What Can Your Practice Do To Help?

Let’s take a look at some proactive measures you can take to cope with a patient’s medical debt.

Clear Communication Strategies

Naturally, communication between you and the patient is vital when it comes to medical debt and credit reporting in order to improve transparency and trust.

Financial Counseling & Guidance

Though it’s not inherently your job to do this, patients may greatly appreciate any financial counselling services or referrals to counsellors you can offer so they can discuss their financial options. This also helps with budgeting and generally managing medical debt effectively.

How PMN Can Assist

Amidst all of your other responsibilities as a medical practice owner, having to find solutions for unpaid medical debt can eat up your staff’s time and resources quickly.

To combat this, many medical practices throughout California partner with a third-party medical billing specialist to aid their efforts.

Denial Management & Appeals

PMN has over 20+ years of expertise when it comes to managing claim denials and handling appeals which can help reduce the occurrence of patient medical debt due to the increased likelihood of insurance reimbursement.

This, in turn, can protect patients’ credit scores from some of the negative impacts caused by unpaid medical bills.

Patient Billing & Collections

In addition, PMN can help your practice implement efficient strategies regarding patient billing and collections – think of things like flexible payment options, manageable payment plans, and generally providing clear communication about their billing responsibilities.

If this kind of service is something your practice would benefit from, contact PMN today at (949) 215-5055. Alternatively, you could always have an in-person chat with one of their staff members at their office in Laguna Hills, Orange County, California.

FAQs

Can Patients Dispute Medical Debt on Their Credit Reports?

Yes! If one of your patients believes that the medical debt on their credit report is either inaccurate, incomplete or simply just outdated, they can actually dispute this claim and possibly save themselves money. The Fair Credit Reporting Act usually grants individuals the right to dispute any information they deem incorrect.

What Options Are Available For Patients Struggling with Medical Debt?

Patients facing medical debt have a few options at their disposal, the most effective of which is usually negotiating payment plans with the medical practice, they received treatment from. In addition, they can always apply for financial assistance programs or seek general assistance from a medical billing advocate who might be able to review their bills for any errors or overcharges.