With the start of the New Year, collection agencies working on behalf of healthcare providers have a lot to do to keep up with the requirements of the Affordable Care Act and its potential impact on their clients’ accounts.
Provisions of the Affordable Care Act in effect in 2014 included tax credits to provide more affordable care to the middle class; establishing the health insurance marketplace; increasing the small-business tax credit for employers providing health insurance; increasing access to Medicaid; and promoting individual responsibility to obtain health insurance, according to the U.S. Department of Health and Human Services.
In 2015, certain employer mandates to offer healthcare coverage will be in place. According to the U.S. Treasury Department, the employer responsibility provision will be in effect for companies with 100 or more full-time employees this year, and companies with 50 or more full-time employees will have to be on board in 2016.
The HHS and Congressional Budget Office recently estimated enrollment numbers for the Affordable Care Act by the time the open-enrollment period ends on Feb. 15, 2015. HHS predicted that 9-9.9 million people would register for insurance, while the Congressional Budget Office estimated 13 million people would enroll through the Affordable Care Act marketplaces.
Sticking to Best Practices
While the open-enrollment period continues and legislators debate potential changes to the Affordable Care Act, collection agencies are focusing on maintaining consistent service to their healthcare clients. “I’ve heard from clients who have wanted me to completely overhaul how we work their accounts or scrutinize each step of what we do, all the way to clients who have said, ‘I’m looking to you for answers—you tell me what to do,’” said Michael Rainwater, CCAE, CCCE, IFCCE, administrator of Uptain Group Inc. in Knoxville, Tenn.
Rainwater said his agency works to be a source of consistent information while the healthcare community is bombarded with news and updates about the Affordable Care Act. The ACA International and Healthcare Financial Management Association best practices continue to be a useful tool to help providers better resolve medical accounts.
“If a client comes to us and asks for recommendations, those best practices are what we’re using as the template for them,” Rainwater said. The best practices, for example, outline ways to improve patient education and communication, make bills patient friendly and establish policies for account resolution.
Learning for 2015
In 2014, healthcare debt was nearly 38 percent of all debt collected in the credit and collection industry, making it the leading category of debt collection, according to the ACA/Ernst and Young study, The Impact of Third-Party Debt Collection on the National and State Economies.
In spite of that trend, collection professionals are closely watching how the Affordable Care Act and self-pay could affect their healthcare accounts in the future. Misti Cook, a client advocate in the sales and marketing department at Cascade Collections Inc. in Salem, Ore., said as of late November, her company’s client base is approximately 70 percent healthcare collections. Cook said Cascade Collections works with consumers on behalf of healthcare provider clients to offer solutions to pay their debt, and has a 35 to 40 percent recovery rate on healthcare accounts.
However, company executives are aware that things could change down the road as a result of the Affordable Care Act. Cook said at times it is more difficult to collect on patients’ accounts because they may be experiencing other financial setbacks in addition to their medical debt. According to a survey from The Commonwealth Fund released in November 2014, the amount of healthcare out-of-pocket costs relative to consumers’ income is increasing, in addition to healthcare premiums and deductibles.
The report notes that as healthcare premiums rise, many employers and individuals are selecting insurance plans with higher deductibles and copayments in an attempt to keep premium costs in check. Overall, 13 percent of people with private health insurance whose plans include a deductible now have deductibles equivalent to 5 percent or more of their income. That figure includes 25 percent of adults with low incomes and approximately 20 percent of adults with moderate incomes ($11,490to $45,960 a year for a single person).
Cook said Cascade Collections has focused on keeping up with local and national Affordable Care Act updates in order to pass that information along to clients. “We try to train clients to communicate with patients about collections,” Cook said. “Then it’s not as big of a shock and it’s easier for them to process.”
For example, Cook said Cascade Collections offers pre-collect letters outlining that patients with a bill to pay should contact their creditor (the healthcare provider) within 30 days or the account will be turned over for collections. Scott King, a collection consultant in Cascade Collections’ sales and marketing department, agreed that staying informed is important. “It’s all about education and knowing what’s coming down the pike,” King said.
Rainwater said that while he sees communications or information about the Affordable Care Act coming into his agency on a daily basis, the credit and collection industry is still waiting to see how the act will affect healthcare accounts.
“Potentially there could be significant changes to when we collect, how we collect [and] charity-screening requirements,” Rainwater said. “All of those things require training of collectors and language on correspondence we send out. As more parts of the Affordable Care Act and mandates come in to play, communicating with clients about what they want in treatment of their account holders is important.”