Every year, accounts receivable services in hospitals and doctors' offices may get overwhelmed by the amount of bills they have to process. With so many health insurance providers out there, workers in these departments have to follow different protocols in order to receive payment.
While it may not seem like a huge issue, prioritizing time for a select group of patients over another, it can lead to uncompensated care, the American Hospital Association (AHA) explained. By the AHA's definition, uncompensated care comes from two sources: charity care and bad debt.
The difference between the two is that doctors who place a patient under charity care are not expecting to have these patients pay for their treatment, whereas in cases of bad debt, bills simply go unpaid, forcing the provider to cover the cost of the care.
In 2012 alone, practices were unable to process about $45.9 in bills, an increase of $4.8 billion over the previous year. Uncompensated care reportedly accounted for 6.1 percent of total expenses – the highest percentage since 1999 Fierce Health Finance reported. Historically, uncompensated care has accounted for less than 6 percent of a practice's total expenses.
The AHA does not take into account underpayments from Medicare and Medicaid, which means the total amount of uncompensated care is actually even larger.
Hospitals that want to shore up their bottom line by cutting down on uncompensated care can benefit from outsourcing their medical claims management to Professional Medical Services. This can help alleviate the burden of smaller bills, while increasing cash flow for these medical facilities.