Those Sticky Fingers Can Be Cut Off: A Commentary

Guest post by Tom Furr, CEO, PatientPay

Tom Furr
Tom Furr

Did you hear the one about the disbarred lawyer who embezzled more than $1.2 million from a hospital in Kansas City over four and one-half years? This is not the start of a joke; it is unfortunately all too true. The long-trusted attorney supposedly served the hospital by collecting past-due payments from patients. Money collected was to go into a trust account. However, his fingers were more than a little sticky when checks were mailed back from patients and found their way into his personal account.

Slow-/no-pay patients have become a much more important aspect of hospital financial management as high deductible health plans (HDHP) become the norm across America. What once was considered little more than an annoying write-off, keeping bad debt to an absolute minimum is very much a priority. Gone are the days when more than 90 percent of revenue came from the insurance companies. Hospitals must look to patients for 50 percent, or more, of that revenue now. My bet is the number of checks embezzled by the attorney has only recently become material, which is why it took so long to catch him.

We can criticize the hospital for not staying on top of its account receivables. Certainly, payment plans, offered at the time of service can help keep A/Rs down as can reminders emailed to the slow-poke-paying patients. But that’s misses the larger point.

Unfortunately, any time checks are directed to third-party services, the potential for maleficence exists. Any point in a process where the payment can be touched, there is an opportunity for a redirection of those funds as in the case of the hospital in the city of fountains.

A significant portion of this could have been avoided if the hospital used an online paperless solution to bill their patients. It cuts off those sticky fingers, figuratively speaking. A paperless method keeps out crooked collectors because there is no reason or way for them to get their hands on the funds since they are not deposited directly into the hospital’s bank account and reconciled nightly. There’s nothing to touch or divert.

I am of the opinion that this crime in Kansas City is not all that unusual or isolated. Perhaps a perpetrator is uncovered and reparations are made under the cover of a sealed agreement, but it happens entirely too often.

In the past year I’ve seen reports of CEOs, CFOs and directors shown the door for embezzling millions from healthcare facilities in Alabama, Idaho and Wyoming, among others. The Alabama case involved a whopping $14 million.

Cash flow has become a top priority for all segments of healthcare, but especially hospitals. As I already suggested, the presence of HDHPs has made it so. But the manner in which these institutions bill for services rendered and go about seeking payment, is opening them to the same fate as these other organizations who were robbed and so the time to change is now.

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