Study finds that insured patients are responsible for 65 percent of the healthcare industry’s uncollected debt.

Contrary to popular belief, the healthcare industry's debt problem can't be blamed solely on the uninsured, according to a just-published national study conducted by nTelagent.

nTelagent's aged trial balance (ATB) analyses of healthcare service providers across the country showed that approximately 65 percent of all bad debt is the result of insured patients, not uninsured patients. This is due to the frequent noncollection of upfront payments such as co-pays, co-insurance, deductibles and other out-of-pocket costs. The average outstanding insured patient portion ranges from $700-$1,100, depending on geography.

“The findings of the study show that, in terms of bad debt, it's not just the $10,000 bills that are causing the problem. The real issue is the many thousands of smaller uncollected balances, those in the $500 to $1,000 range, belonging to insured patients. It's the sheer volume of these instances that is causing a big problem, because payments are not being collected at the time of service,” said Earl T. Winter, chairman and CEO of nTelagent.

In the past, the primary payors in the healthcare industry were either private or public insurance organizations, and healthcare providers' systems were built specifically to bill and accept payments from these payors. Today, the industry has shifted to a retail model, as the patient-responsible portion of the bill has increased dramatically thanks to trends such as consumer-driven healthcare; higher co-pays; co-insurance and deductibles for traditional insurance plans; and the growing uninsured population.

 “Healthcare service providers must adapt to the fact that the industry has moved to a retail model, with consumers taking on more and more financial responsibility for their care,” Winter said. “Determining and initiating collections from patients at the point of service is critical, as the likelihood of collecting from patients after discharge is far less. Also essential is that those patients eligible for charity care and social services assistance are identified and signed up as soon as possible.”