Case study: NV hospital collections at 1 percent

Sure, it's tough to collect overdue bills under any circumstances--especially during the kind of economic crisis we've seen over the past couple of years. But even now, collecting less than 1 percent of outstanding bills puts a hospital in a unique category.

Las Vegas-based University Medical Center is currently owed $459 million in past-due debt. But between October 2008 and May 2009, the hospital's three collection agencies managed to pull in just $2.9 million, or 0.6 percent of the debt. The current procedure includes billing patients four times; the hospital then offers a discount to the uninsured who live in its county and tries to work out collection plans. If that doesn't work, at long last, the debt goes to a collection agency.

This is well below the industry standard. According to the International Association of Credit and Collections, members reported an average collection rate of 15.2 percent on unpaid hospital bills in 2006, a figure which includes both investor-owned and not-for-profit hospitals. If UMC could boost its average to industry levels, it would bring in about $46 million after agency fees, observers note.

The situation has been tough on the hospital, which was recently forced to close its outpatient cancer treatment center due to a $3.5 million financial shortfall.

To learn more about this situation:
- read this Las Vegas Sun piece

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