Submit Articles | Member Login | Top Authors | Most Popular Articles | Submission Guidelines | Categories | RSS Feeds See As RSS
Forgot Password?    New User?
Welcome to!

Articles » Finance » Fundraising >> View Article

By: Alec Richardson
What is the best way to analyze the performance of your collection agency partners?If a collection agency is worth their salt, they will be pounding on their client's door before their client calls them in for an annual review meeting. Performance review meetings should be held quarterly. By reviewing performance each quarter, the client won't be surprised when year-end performance data is presented. To analyze an agency's collection performance, ask for a monthly rolling batch analysis. The only accurate way to compare agencies against each other is to measure performance by monthly batch.Making overall comparisons of multiple agencies by evaluating a year-end total average collection rate is highly inaccurate. If agency #1 holds seven years of inventory and agency #2 has one year of inventory, you cannot accurately measure each agency's collection performance against each other. As account inventory ages, patient accounts are cured passively. While most agencies won't contact patients after approximately 120 days, there are recoveries that happen over the long-term. Motivation for resolving accounts from credit reporting, resolutions from litigation and the collection of long-term payment plans will skew overall performance numbers.Has your agency met your expectations for the past year? Did you establish those expectations in advance?Creating realistic collection performance expectations is very difficult to do. Although an agency may provide their historical collection average or a provider compares agencies existing collection average over time, it is difficult to know how much more an agency is capable of collecting.If you think, collection agencies paid on a contingency fee (paid a percentage of dollars collected) work as hard as they can to collect all accounts - that is just not the case.Agencies will balance collection results against their profitability margin goals. They will back off collection activity if they see their margins eroding. In addition, if multiple agencies are in a champion-challenger competition, they will perform to a level equal to their competitors or slightly above. Typically, if one agency, performing neck and neck with their competitor (s) attempts to significantly beat their challenger, they will experience a large margin reduction. Therefore, agencies usually will only collect to a performance benchmark within a reasonable range of the competition. This means money may be left on the table.Unless the provider has an in-house or vendor created propensity of payment model, it is very difficult to measure overall collection performance ability. When accounts are segmented into buckets, and scored appropriately, collection performance by bucket can be evaluated based on the scoring model's expected collection benchmark. Scoring collection accounts gives a provider empirical data to compare their collection agency's performance against a statistically validated data point.Does your agency know what is expected of them?Creating performance metrics and determining a performance benchmark requires the consideration of many factors. Metrics must be developed by analyzing "apple to apple" data comparisons. I do not suggest comparing agencies by evaluating their overall average collection rate. Your collection agency may have a large portion of their client base located in other parts of the country; therefore, their company's average collection rate will have no bearing on how they will collect in the locale of the provider.Developing fair performance metrics can be accomplished by integrating scoring data, data from industry analysis reports and evaluating a hospital's market service area's demographics. The ability to collect accounts can dramatically vary from city, county, zip code and zip+4 areas.How often do you audit your collection agency onsite?When visiting a collection agency for a site audit, always ask to see every desk where healthcare accounts are being worked. Walk the floor and liste

Article Source:

See All Articles From Author

Best Product Reviews

Rate this article: CBCS Collection Agency

Article Rating: 3.8/10 (9 votes cast)

Current Comments

0 comments so far (post your own)

Leave your comment:




Security Code:

What is the capital of Finland?:


NOTE: Please keep comments relevant. Any content deemed inappropriate or offensive may be edited and/or deleted. Line breaks will be converted automatically and URLs will be auto-linked. No HTML code is allowed, instead please use BBCode if you want to format your text.