Healthcare Debt Collection
We are pleased to introduce you to our Transworld Systems Inc. healthcare
debt collection program. PSA has a contractual relationship with Transworld
Systems Inc. to represent its debt collection services to the numerous physician
networks that we represent in the healthcare industry. Transworld Systems
Inc. has been in the healthcare debt collection business for 35 years and
has over 20,000 healthcare clients nationally.
• No More Large Contingency Fees – Traditionally, when a physician’s practice
or billing company wanted to turn over files for collection, they would utilize
a contingency based collection agency that would typically charge 35-40%
of the value of the files turned over to them. Because of the high cost associated
with contingency based collection agencies, practices would tenaciously hold
on to these files for six months or more which results in a collection success
rate of no more than 10-20%.
• Our program utilizes a low cost, fixed fee business model which results
in the highest profit recovery at the lowest cost in the healthcare industry -
our average fee is $10 per file or less regardless of the value of the file.
Our program creates an incentive for a practice to turn their files over
to us early in the collection process because of our low fees. Typically,
a practice will turn over their self-pay files to us at 61 days and their
commercial insurance files to us at 91 days. Because we get these files turned
over to us much earlier, our collection success rate is much higher than
the traditional debt collection company. Our average recovery rate is 56%.
This contrasts with a 10-20% collection success rate for contingency-based
collection agencies.
Our Program Functions As A Natural Extension Of Your Practice
Our program works as a natural extension of your practice’s own in-house
collection efforts. Our program in no way takes the place of any current
billing and collection efforts that take place during the first sixty to
ninety days of the billing and collection process. Our program represents
a natural transition for handling delinquent accounts that could be turned
over to us much earlier due to the low cost associated with our program.
In addition, your practice can selectively choose which files they want to
turn over to us for collection.
An example comparing the traditional debt collection company with our
own higher profit recovery, low cost program:*
Assumptions:
| Number of Files/ Accounts Submitted |
Average Balance Per Account |
| 100 |
$500 |
Traditional Contingency-based Collection Company
| Number of Accounts |
Average Balance Per Account |
Cost Per Account |
Anticipated Recovery Rate |
Projected Total Recovered ($) |
Cost To Recover ($) |
Cost To Recover (%) |
Net To Practice |
| 100 |
$500 |
30% of Value |
20% |
$10,000 |
$3,000 |
30% |
$7,000 |
Fixed-Fee Collection Company
| Number of Accounts |
Average Balance Per Account |
Cost Per Account |
Anticipated Recovery Rate |
Projected Total Recovered ($) |
Cost To Recover ($) |
Cost To Recover (%) |
Net To Practice |
| 100 |
$500 |
$10 |
50% |
$25,000 |
$1,000 |
2.9% |
$24,000 |
* In this example which is based on historic collection data
for both fixed fee and traditional collection agencies, we will collect
$17,000 more net dollars to the practice than the traditional agency
at a cost to recover of 2.9% versus 30% for the traditional debt
collection company.
How Do I Get Started With A Debt Collection Program?
First, PSA will request a summary aging report from the practice which
shows receivables by financial class and breaks down the receivables into
aging buckets, i.e., 0-30 days, 31-60 days, etc. From the aging report, we
will develop assumptions which will include the number of clean-up files
to be worked, number of self-pay files reaching 61 days, number of commercial
insurance files reaching 91 days, etc. From the assumptions, we will create
a system design proposal which looks at the financial impact of our program
for your practice over a 6, 12 and 24 month time frame. It will tell us how
many files would be turned over during those time periods, how much in receivables
the files would represent and with our collection success rate 56%, how much
in receivables we would expect to collect for each of those time periods.
It will also show what the resulting cost to collect would be. At no additional
cost, our IT department will work with your practice staff to set up an automated
upload procedure so that the practice can easily upload both claim and remittance
files to us. |
