| Debt collection from patients is a conflict | | | | |
| doctors often prefer avoiding for fear of | | | | |
| potential implications to practice reputation | | | | |
| and increased exposure to malpractice | | | | Transparency. Provide real time status on |
| lawsuits. Healthcare debt collections | | | | all collection activities, including amount |
| require unique combination of sensitivity, | | | | collected, actions taken, and patient |
| skill, and discipline. Understanding of debt | | | | responses. Include a wide selection of |
| collections process and outsourcing | | | | reports available over a secure Internet |
| opportunities help the practice owner improve | | | | connection 24 x7. |
| revenue cycle while minimizing practice | | | | |
| risks.The best way to improve the patient | | | | Tight Cash Flow Control. All collected |
| payment component of the revenue cycle is to | | | | money goes directly to your practice or bank |
| collect cash payment in advance for | | | | account, increasing positive cash flow and |
| healthcare services. However, without solid | | | | immediately collecting interest. No waiting |
| processes and disciplined implementation, | | | | for a collection agency to take its |
| upfront cash collection can challenge and | | | | percentage first and pay you at its |
| frustrate front office staff, often | | | | convenience. |
| contributing to accumulation of outstanding | | | | |
| patient debt. Insurance companies sending | | | | Lower Risk with Indemnification. |
| payments directly to patients instead of the | | | | Collections agency must indemnify your |
| office further exacerbate the difficulties of | | | | practice from lawsuits resulting from |
| debt collection.A typical debt-processing | | | | collection efforts through a written |
| scenario proceeds in three phases, starting | | | | hold-harmless agreement. |
| with billing, to debt accumulation, to | | | | |
| selection of the most appropriate collections | | | | Flexible Contact Style. Avoid offending |
| method. Clear definition of responsibilities | | | | your patients. Collections agency must be |
| along with payment arrangements help | | | | able to vary its patient contact style (e.g., |
| effective collections, minimize practice | | | | diplomatic or intensive) on a |
| risks, and reduce administration costs. | | | | patient-by-patient basis according to your |
| Billing Phase: Your billing office sends | | | | specific direction. |
| patient invoices and a number of reminder | | | | |
| invoices regarding outstanding balance | | | | Patient Relationship Maintenance. |
| directly to the patient. Debt Accumulation | | | | Collections agency must not intrude on your |
| Phase: The patient does not pay the invoice | | | | relationship with your patient. If you choose |
| for a time period exceeding desired limit | | | | so, you should be able to maintain continuous |
| (typically, 90-120 days). Accounts | | | | control of patient's account, including |
| receivable distribution over the span of 30, | | | | negotiation of payment plans or dispute |
| 60, 90, and 120 days takes the shape of | | | | resolution directly with your patient as a |
| inverted horizontal S. Debt Collections | | | | key element of the collection process. |
| Phase: The practice must consider at least | | | | |
| four alternatives for outstanding debt | | | | Economies of Scale and Fees |
| collection: | | | | |
| | | | |
| | | | |
| | | | Collections Letter Generation. |
| Dismiss the patient until all debt is paid. | | | | Generally, the procedure to collect a debt |
| | | | starts with a letter to the person that owes |
| Offer the patient the opportunity for a | | | | the money sent on the letterhead of |
| financial hardship write-off. | | | | collections agency or attorney firm. A |
| | | | letter from an attorney often results in many |
| Take the patient to small claims court. | | | | outstanding debts paid. Flat fees for |
| | | | sending such letters vary between $5 and $15 |
| Hire debt collections agency.First, | | | | per patient per month. |
| dismissing a patient is not always an | | | | |
| appropriate option because of associated | | | | Aggressive Follow Up Using Legal |
| reputation implications and potential medical | | | | Assistance. If the letter does not result |
| malpractice risk. More importantly, | | | | in payment, the collections agency must begin |
| dismissing the patient only stops subsequent | | | | vigorous pursuit for outstanding monies. If |
| debt accumulation but does not eliminate the | | | | payment is still not made on the outstanding |
| already accumulated debt.Next, financial | | | | invoice, a complaint is filed with the courts |
| hardship write-off may not be feasible as | | | | and served personally upon the debtor |
| some patients refuse or are ineligible for | | | | requiring their appearance in court. The |
| it.Third, a small court can help collections | | | | attorney then appears in court on behalf of |
| only from patients with steady work and debt | | | | medical practice to obtain an award of the |
| under $5,000, upon paying a typical $75 | | | | amount that is owed. Although the court |
| processing fee. Keep in mind that a small | | | | usually enters an award on behalf of medical |
| court limits its scope to liens and/or wage | | | | practice, it is important to note that |
| garnishments instead of actually making | | | | collections are not completed at the time of |
| collections.Finally, a specialized collection | | | | award. The collections agency must continue |
| agency with thorough understanding of the | | | | to pursue payment of all debts through any |
| claim payment process and result-oriented and | | | | and all legal means available, including wage |
| accountable approach to customer service | | | | garnishment, bank account seizures, or, in |
| recovers on average 15% of outstanding | | | | rare cases, arrest. Success fees vary from |
| debt.Key debt collections agency selection | | | | 30% to 50% of recovered debt. |
| issues revolve around industry knowledge, | | | | |
| performance, control, costs, and interaction | | | | Even Focus Regardless of Balance Size. |
| between billing and collections services: | | | | Collections solution must be effective for |
| | | | all balances regardless of amount owed. |
| Specialized Industry Expertise | | | | |
| | | | Interaction between Billing and |
| | | | Collections |
| | | | |
| Compliance and Certification. | | | | Account Transfer Decisions. The practice |
| HIPAA-compliant medical record processing and | | | | manager must control the flow of patient debt |
| legal compliance with federal and state | | | | and all associated information from billing |
| collections regulations. | | | | service to collections agency. |
| | | | |
| "Skip-tracing." Ability to find patients | | | | Account Transfer Mechanism. Billing |
| that changed addresses or names | | | | service must facilitate the infrastructure |
| | | | for simple, timely, and effective |
| Access to Special Funding Sources. | | | | decision-making and digital data transfer to |
| Experience of working with specialized public | | | | maintain the highest likelihood of successful |
| and private funds for victims of accidents | | | | debt collection. |
| and violence | | | | |
| | | | Separation of Labor. The collection |
| Relevant Legal Expertise. Access to | | | | agency taking over the unpaid patient balance |
| specialized legal expertise and ability to | | | | deals directly with the patient and the |
| handle both small and large debt cases in | | | | practice, excluding billing service from |
| court | | | | remaining collections process and any |
| | | | associated fees. |
| Understanding of Billing Processes | | | | |
| Knowledge of healthcare claims processes and | | | | Exclusion of Fees. Billing service |
| ability to successfully negotiate with | | | | should receive no referral or any other fees |
| insurance companies | | | | from collections agencies servicing the |
| | | | doctor's office. Upon account transfer away |
| | | | from the billing service, it should receive |
| | | | no fees from the medical practice for |
| Proven Performance | | | | collecting the outstanding debt. |
| | | | |
| | | | Yuval Lirov, PhD, author of "Mission |
| | | | Critical Systems Management" (Prentice Hall) |
| References. Provide a list of | | | | , inventor of multiple patents in artificial |
| specialty-relevant references. | | | | intelligence and computer security, and CEO |
| | | | of Billing Technologies. Vericle(R) |
| Quantitative Performance Measurement. | | | | delivers comprehensive practice workflow |
| Compare collections performance including | | | | engine that integrates patient scheduling, |
| percent collected and time to account | | | | electronic medical records (EMR), billing, |
| liquidation. | | | | transcription, and compliance management. By |
| | | | consolidating technology for hundreds of |
| Client satisfaction. Demonstrate long | | | | separate billing services, Vericle(R) tracks |
| client retention history. | | | | payer performance from a single point of |
| | | | control, shares compliance rules globally, |
| Centralized Control | | | | and creates massive economies of scale. |