Large hospital systems usually have in-house collections departments, or they contract with an agency once a year. When the efforts of those agents fall to the wayside because a debt is deemed unrecoverable, a second placement agent is brought in to try and recover the debt.
So, what is second placement collections? Second placement is simply the act of turning over previously uncollected debt to a second collection agency in another attempt to collect on old accounts.
In healthcare, over 80% of patient debt is unresolved which equates to billions of dollars in revenue left sitting out there. So, how do you get it? At Account Resolution Team, we see this every day. We see it with our largest hospital clients all the way down to our local physicians.
With our small to medium-sized groups, the first collection efforts are usually the burden of the office manager or another administrator on-site. Unfortunately, these valuable people are usually stretched in many different directions and cannot focus on more than a few accounts at one time. The debts quickly pile up and before you know it, they are months, or even years old. It is time to hire an agency to perform second placement.
Do second placement collections pay off?
The answer to this is dependent on the agency you choose.
Confident agencies are contingent only, so you do not pay anything unless they collect for you. This is a win-win situation because you are not paying a retention fee or monthly fee for their services. It follows the age-old saying, “What have you got to lose?”. If you have already come to grips that you will likely never see that money with your in-house or other agency, then it behooves you to take a chance with a second placement agency. But, blindly choosing a contingency-only agency is not good enough. Without a track record of a strong recovery rate, even the lowest commission agencies are not doing you any good.
At ART, we make your second placement just as much a priority as first placement, or traditional collections. Our agents have over 70 years of combined experience; we are good at what we do because we do it every day.
Technology in second placement collections: Scoring and sorting
Simply put, you can think of scoring as a debtor’s scorecard. A debt is scored based on a number of factors. By segmenting and prioritizing a patient’s or customer’s debts, they are classified into low, medium, and high-risk categories. The different factors for these categories are the age of the debt, the phase of collections that the debt is currently in, the patient’s or customer’s credit profile, and the potential settlement viability.
The latest in technological advancement allows for the use of analytics to help segment these customers based on the factors above. From there, the risk score will help to prioritize the debts that are the most likely to be recovered for you.
After scoring, the debts are then sorted into basic groups consisting of cancellations, write-offs (or charge off’s), move to litigation, and then if already in the litigation process, sort into garnishments.
Interested in learning about contingency-only collections with ART? Give us a call today! 423-586-7613.