Collections in the Medical Office

1. 10 Collections in the Medical Office

2. 10-2 Learning Outcomes When you finish this chapter, you will be able to: 10.1  Explain the importance of prompt payment laws. 10.2 Summarize the importance of a financial policy in a medical office. 10.3  Identify the laws that regulate collections from patients. 10.4 Demonstrate how to post a payment from a collection agency. 10.5  Discuss the process of writing off uncollectible accounts. 10.6  Explain how to use a patient aging report to identify past due accounts.

3. 10-3 Learning Outcomes (Continued) When you finish this chapter, you will be able to: 10.7 Demonstrate how to add an account to the collection list. 10.8  Demonstrate how to create a collection letter. 10.9  Demonstrate how to create a collection tracer report.

4. 10-4 Key Terms • collection agency • collection list • collection tracer report • payment plan • prompt payment laws • tickler • uncollectible accounts • write off

5. 10-5 10.1 Laws Governing Timely Paymentof Insurance Claims • Receiving prompt payment for services is a critical factor in determining the financial success of a medical practice • Prompt payment laws are state laws that mandate a time period within which clean claims must be paid and that call for financial penalties to be levied against late payers

6. 10-6 10.2 The Importance of a Financial Policy • Collection process begins with a clear financial policy and effective communications with patients about their financial responsibilities • Important to have a written financial policy that spells out patients' responsibilities

7. 10-7 10.2 The Importance of a FinancialPolicy (Continued) • Financial policies should tell patients how the practice handles: • Collecting copayments and past-due balances • Setting up financial arrangements for unpaid balances • Providing care for patients with low incomes • Payments for services not covered by insurance • Collecting prepayments • Accepted methods of payment

8. 10-8 10.3 Laws Governing Patient Collections • Patient collections are consumer collections and are regulated by federal and state laws • Collections from insurance carriers are considered businesscollections

9. 10-9 10.3 Laws Governing Patient Collections(Continued) • Fair Debt Collection Practices Act of 1977 • Telephone Consumer Protection Act of 1991 • General guidelines: • No calls before 8 am or after 9 am • No threats or profane language • Respect patient privacy • No deception or violence

10. 10-10 10.3 Laws Governing Patient Collections(Continued) • A payment plan is an agreement between a patient and a practice in which the patient agrees to make regular monthly payments over a specified period of time • Truth in Lending Act applies if practice adds finance charges and payments are made in more than four installments

11. 10-11 10.4 Working with Collection Agencies • A collection agency is an outside firm hired to collect on delinquent accounts • Practice no longer contacts the patient if the account is turned over to a collection agency • Often paid on the basis of the amount of money they collect • When payment is received from a collection agency, it must be posted to the patient’s account • Information found on the statement provided by the agency • Exercise 10-1

12. 10-12 10.5 Writing Off Uncollectible Accounts • When all collection attempts are exhausted, the collection process is ended • Amount owed is often called an uncollectible account or a bad debt, and it is written off the practice’s expected accounts receivable • A write off is a balance that has been removed from a patient’s account • Exercise 10-2

13. 10-13 10.6 Using a Patient Aging Report for Collections • An aging report shows the patient’s chart number and name, and the amount of unpaid charges in each of these categories: • Current: Up to 30 days • Past: 31 to 60 days • Past: 61 to 90 days • Past: 91 to 120 days • Past: More than 120 days • Exercise 10-3

14. 10-14 10.7 Adding an Account to theCollection List • Overdue accounts are added to a collection list • The collection list is designed to track activities that need to be completed as part of the collection process • Ticklers or collection reminders are displayed as collection list items • A tickler is a reminder to follow-up on an account that is entered on the collection list

15. 10-15 10.7 Adding an Account to theCollection List (Continued) • The Collection List dialog box displays ticklers that have been entered into the database

16. 10-16 10.7 Adding an Account to theCollection List (Continued) • Tickler Item dialog box • Exercise 10-4 Tickler tab Office Notes tab

17. 10-17 10.8 Creating Collection Letters • Before collection letters can be sent in Medisoft: • Patient-responsible tickler item must be entered in the collection list • Collection Letter report must be created • Report is generated when the Patient Collection Letters option is selected on the Reports menu

18. 10-18 10.8 Creating Collection Letters(Continued) • The Patient Collection Report lists patients with overdue accounts to whom statements have been mailed

19. 10-19 10.8 Creating Collection Letters(Continued) • After printing collection letters, an account alert appears in the Transaction Entry, Quick Ledger, and Appointment Entry windows • There are three account alert abbreviations: • RB – remainder balance • DP – delinquent on payment plan • IC – in collections • Exercise 10-5

20. 10-20 10.9 Creating a Collection Tracer Report • A collection tracer report is used to keep track of collection letters that were sent • The report lists: • Tickler item number • Responsible party • Chart number • Account balance • Date collection letter was sent • Reasons the account is in collections • Created via the Collection Tracer Report feature on the Reports menu • Exercise 10-6