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