Health Care Collections Vet Sees Business on Upswing

When it comes to collecting medical debt, Stuart Bloom’s number one rule is “Get the money,” with the caveat, “Do it in a respectful manner.”

The philosophy has helped Bloom, owner of Trans-Continental Credit & Collections Corp., grow the two-person collections shop he started above a hardware store in Tarrytown, N.Y. 33 years ago, into a 45-man agency in White Plains. Trans-Continental  focuses on medical debt collections, but also does insurance appeals for hospitals that have been denied payment.

“At least 10 percent of the patients in self-pay collections are really insurance (accounts),” Bloom said.

Although the American Hospital Association says the industry’s uncompensated care expense reached $31.2 billion in 2006 primarily because of unpaid self-pay accounts, Bloom said hospital executives don’t want collectors using tactics that could harm their hospital’s image in the community. That’s kept many hospitals from selling their debt, according to Bloom.

“It’s a competitive field and they want their patients to come back again,” he said. “They don’t want any stories in the newspaper.”

Bloom says being professional isn’t difficult and tricks like pretending to be someone else aren’t allowed at his company. “Most people want to take care of their bill,” he said, adding that many of the accounts he serves are resolved after patients are contacted via letter or by phone.

Still, hospitals realize that they have to do more to reconcile self-pay accounts as soon as possible to get all or as much of the debt owed because the chance of collecting depreciates about 10 percent a month, said Bloom. Trans-Continental clients are doing more to collect self-pay payments up front, by requesting payment in full by check or credit card. In cases where patients can’t cover the entire amount, hospitals are pairing patients with financial counselors to help the patients qualify for public or charitable programs.

Collectors need not fear, however, that more aggressive in-house collection practices by hospitals will curtail business, Bloom said. Last year Trans-Continental had its best year ever in gross collections and bottom line profits because the number of self-pay accounts are increasing as well as the amounts owed, Bloom said.  He said his company’s volume has grown 15 percent to 20 percent each year over the last several years and he estimates industry volume will grow at least 10 percent a year because of higher deductibles and co-pays.

“We get thousands of new accounts each week from our client base,” Bloom said. “Even Medicare patients are responsible for the first $900 of the hospital and patient stay each year and they have 20 percent co-pay.”