Post by: Eric Jones | Posted Date: December 11th, 2013 | Categories: Debt Collection
It is natural that medical providers are most concerned with providing quality medical care for their patients. However, providers also have to be concerned with receiving payment for the services they render. Therefore, it is imperative that providers establish effective revenue recovery policies. This article is intended to assist medical providers with creating and maintaining sound in-house collection policies, and to be ready with a successful strategy in the event the provider needs to hire an outside agency to assist with recovering past-due amounts.
First, it is important to make sure that out-of-pocket costs are discussed with the patient up front. The less confusion about what a visit/procedure will cost the better. Additionally, whenever possible patient co-pays (or the full cost of the visit from those who have no insurance) should be collected at the time of the visit. The well-known idiom “’an ounce of prevention is worth a pound of cure” is especially appropriate here. It is much easier to collect these payments when the patient is in the office than it is afterward.
Second, get as much personally identifiable information from the patient as is reasonably possible. This will greatly increase the provider’s chances of collecting monies due once the patient leaves the office. A policy should also be implemented that office staff must confirm this information during any future contact with the patient. People move and change jobs regularly and being able to contact the patient once they leave the office is of great importance when trying to collect monies that are owed. In addition, phone calls to the patient early on in the process can often times secure some type of payment plan within the patient’s budget.
In-house collection activity
The patient now has a past-due bill and the provider is tasked with trying to collect it. What policies are in place to assist you in doing so? It is important to point out that a properly written office policy regarding the collection of accounts is important. Specific steps need to be identified and communicated to everyone working in the office detailing exactly how the collection of these accounts is to be accomplished. These steps include the timing and frequency of written reminder notices and phone calls, as well as identifying the length of time these accounts will be worked in-house. A record should be kept of all collection efforts on each account. In order to devote the requisite attention to collection of past-due medical bills additional staff may be required.
There is no set rule with respect to the number of reminder notices that must be sent or phone calls that must be made, nor are there any strict parameters governing how long a medical provider should attempt to recover past-due accounts in-house. One thing that is certain, however, is that the longer a bill goes unpaid, the more difficult it is to collect it voluntarily. Call the patient early in the process to secure a commitment of payment, arrange a payment plan, or to determine if the patient is even able to pay at the present time.
Placing accounts with an outside agency or law firm
Once it becomes clear that the patient is not going to pay the past-due bill voluntarily, what is the next step for the provider?
There are two additional avenues that afford providers an opportunity to collect the debt. The first is to place the account with an outside collection agency, and the second is to place the account with a law firm well-versed in collection law. The former will not be able to sue on the account should legal action required. However, the latter not only has the ability to sue but also can act as a collection agency for pre-suit collection activity. In other words, a collection law firm can act in the dual role of collection agency and law firm.
Once accounts are placed with an outside agency or law firm, the medical no longer needs to devote time and resources to collecting past-due balances. The agency or firm now has the primary responsibility of recovery on these accounts. This does not necessarily mean that the provider will be entirely removed from the process. For instance, the provider should be updated regularly on the status of the accounts and there will be occasions when additional records are needed if legal action is required. However, when an agency gets involved, the provider should cease all billing on that account. Additionally, if the patient calls to discuss the bill at this point, he or she should be referred to the agency handling the account. After an account has been turned over for collections, any payments that the provider receives towards that account should be reported to the agency so accurate record at to the correct balance can be kept.
Once the decision is made to place the past-due account with an outside agency, it is vitally important that the provider choose the agency or law firm wisely. For instance, it is crucial that the agency or firm have a great deal of experience collecting consumer debt generally and medical debt specifically. The procedures and techniques used by the agency or firm must comply with all state and federal law (ex. HIPAA and the Fair Debt Collection Practices Act). Familiarity with these laws and extensive experience with their compliance are imperative. Many collection agencies and law firms that collect medical bills can also assist with filing appeals with insurance companies that have denied claims. Ultimately, the medical provider will have the final say on the settlement of any patient’s account and if legal action should be taken.
If all else fails and a lawsuit becomes necessary, the suit will be filed in the county where the provider is located. At this point it will be necessary to have placed the file with a law firm because a collection agency alone cannot file a lawsuit on the medical provider’s behalf. In most instances the patient will not file any response to the lawsuit and the court will enter judgment by default. If a written response is filed with the court the provider will need to make sure it has all billing records available in order to prove their case.
Once judgment is obtained, Ohio provides a broad statutory scheme for the collection of judgments. For instance, property liens and the garnishment of wages are options. However, there is a cost-benefit analysis that needs to be undertaken in order to make sure the patient ultimately has some ability to pay. Again, information is key. Is the patient employed, unemployed or retired? Does the patient own real estate? The answers to these questions will ultimately determine what type of post-judgment collection technique is used.
The weak economy has affected nearly every segment of the American population. This is true for businesses, large and small, as well as patients. Some of the leading causes of personal bankruptcies in this country are job loss and excessive unsecured debt, which can include medical bills. If the provider or the agency/firm with whom the past-due account was placed receives notice of a patient’s bankruptcy, the provider and its collection representatives must immediately cease all billing and collection efforts and await further instruction from the bankruptcy court.
Medical providers deliver an especially valuable service to consumers. In order to deliver these essential services, providers must be properly compensated to allow for adequate income and cash flow to stay viable. Therefore, providers must utilize all techniques available to collect past-due accounts. Steps to maximize collection of these accounts include:
Timely filing and processing of any insurance claims;
It is only through this consistent, collaborative effort that the recovery of medical bills is possible.
If you have further questions about collection practices please contact the Jones Law Group, LLC at (614) 545-9998.