The current Supreme Court decision has guaranteed the healthcare market is changing….from what to what…no one is quite certain. What is certain though is that the insurance companies are tightening their belts and placing more of the payment burden on the patient.

The strong shift for payment from patients sends a signal to hospitals, physician practices, labs and the medical community at large that they need to focus their revenue collections efforts on patients. Providers have been slow to recognize this change. By the end of 2012, patients will account for 30% of providers’ revenue and most providers are not equipped to collect these outstanding balances.

However, with healthcare costs rapidly shifting to consumers, the patient collections situation has no choice but to change. As consumers constitute more and more of providers’ revenue sources, the inability to collect from those patients is unsustainable and tantamount to provider bankruptcy. Although the presence of third party payers prevents evolution to a retail environment, providers must adopt better collection methods. Aggressive collection at point of care for co-pays and uninsured amounts will help the cash flow and lower the accounts receivables but statements and outstanding balances are not going away.

So what is the answer? A strong collection plan and execution of the plan are the keys to control of the accounts receivables…and the providers’ need for financial solvency will dictate so.

Because of this need, a new generation of patient revenue cycle management (RCM) solutions is entering the market. One concept of RCM is to “change” the traditional collection process. For years, the routine has been the same. The patient sees the provider, the healthcare practice bills the insurance company, the balance after the insurance payment is sent to the patient in a statement. The patient pays or does not pay. If the patient does not pay, monthly statements are sent until the practice decides that the patient is not paying the bill. (Usually between 120 to 180 days) At 180 days the odds to collect the account have reduced to 50%. At this point, the practice uses a third party collection company who not only has a reduced chance of collecting the outstanding balance because of its age but also on those accounts who do pay, the provider pays a substantial fee for the process.

So what is the answer? The answer is to start with a strong collection plan and work the plan. Most practices are not equipped to execute all the functions that are needed to constitute a strong plan. So again you ask…what is the answer? Technology will play a significant role in the future of RCM. Getting in front of the traditional revenue cycle by utilizing technology to execute time-proven collection methods will minimize collection issues and ensure control of the accounts receivables .

Within this growing space, third party collection companies clearly have a role to play. By becoming your technology partners, utilizing collection methods and technology that until recently were only employed by large healthcare providers such as hospitals, to borrow their concepts to improve collections, and lower process costs.