PowerPoint® presentation to accompany: Medical Assisting Third Edition Booth, Whicker, Wyman, Pugh, Thompson

1. Chapter 17 Patient Billing and Collections PowerPoint® presentation to accompany: Medical Assisting Third Edition Booth, Whicker, Wyman, Pugh, Thompson

2. Learning Outcomes 17.1 Discuss the importance of accounts receivable to a medical practice. 17.2 Explain how to accept and account for payment from patients. 17.3 Prepare an invoice. 17.4 Manage a billing cycle efficiently.

3. Learning Outcomes (cont.) 17.5 Describe standard collection techniques. 17.6 Explain how to perform a credit check. 17.7 Identify credit arrangements. 17.8 Recognize common collection problems.

4. Medical assistants take on duties that are administrative in nature Customers have various payment options Third-party payers (insurance carriers) Payment plans Some have large outstanding balances Introduction A proper understanding and administration of billing and payment collection methods is required

5. Basic Accounting • Managing • Accounts receivable – money owed to the business • Accounts payable– money owed by the business • Billing and collections convert account receivable into readily available income

6. Basic Accounting • Standard payment procedures • Collect payments from patients at each office visit • Brings income into practice faster • Saves cost of • Preparing and mailing bills • Collecting on past-due accounts

7. Fee schedule of charges for services doctor offers Cost of services Doctor’s experience Charges of other doctors in the area Fee allowed by insurance policies Usual and customary fees Average fee charged for a service by comparable doctors OR The ninetieth percentile of all fees charged by comparable doctors for the same procedure Basic Accounting: Determine Appropriate Fee

8. Relative value unit (RVU) Doctor’s skill and time Professional liability expenses Overhead costs RVU converted to $ amount for a service This methodology has reduced the growth rate of spending for Doctors’ professional services Related services and supplies Other Medicare B services Basic Accounting: Determine Appropriate Fee (cont.)

9. Basic Accounting: Accepting Payment • Charge slips • Also called fee slips or transaction slips • Numbered consecutively • Preprinted with common services and charges • Uses: • Pad of charge slips on physician’s desk • Given to doctor with patient record at time of appointment • Doctor enters services provided

10. Complete charge slip and request payment Most practices accept: Cash Check Credit cards Insurance Basic Accounting:Accepting Payment (cont.) For today’s visit, the total charge is $50. How would you like to pay?

11. Cash Count money carefully Record payment on ledger Give patient a receipt Check Check date and amount Be sure check is properly filled out Endorse it immediately Basic Accounting:Accepting Payment (cont.)

12. Debit card Immediate removal of funds from bank account Processed like credit card Patient enters PIN Credit card Prompt payment and reduces expense of mailing bills Costs practice a percentage of each charge Check expiration date before processing Basic Accounting: Accepting Payment (cont.)

13. Basic Accounting (cont.) • Using the pegboard system to post payments • Not often used • Post payment on ledger card • Generates receipt at same time

14. Basic Accounting: Determining Payment Responsibility • Third-party liability • Responsibility of insurance company to pay • Minors • Parents or person with legal custody • Emancipated minor

15. Basic Accounting: Determining Payment Responsibility (cont.) • Elderly patients/patients with disabilities • Request proof of guardianship to send bill to another person • Professional courtesy • Doctor waives charges completely or charges what the insurance will pay

16. Apply Your Knowledge What is the difference between accounts receivable and accounts payable? ANSWER: Accounts receivable are monies owed to the medical practice and accounts payable are monies owed by the medical practice. Good Job!

17. Standard Billing Procedures: Preparing Invoices • Prepared and mailed • Patients who do not pay • Patients who make only a partial payment • Using codes on the invoice • For common procedures • Itemized list on invoice • Using ledger cards • Photocopy to send to patient

18. Standard Billing Procedures: Preparing Invoices (cont.) • Generating computer invoice • Print invoice for balance due • Using independent billing services • Large practices • Sending invoices electronically • To insurance companies

19. Standard Billing Procedures (cont.) • Using the superbill (encounter form) • Includes • Charges for services rendered that day • Invoice for payment or insurance copayment • Information needed to submit insurance claim • May be computerized • Attach to medical record for physician to complete at time of visit

20. Managing billing cycles Cycle billing Bills each patient only once a month Spreads the work of billing over the month Invoice groups of patients every few days Standard Billing Procedures (cont.)

21. Apply Your Knowledge What is cycle billing? ANSWER: Cycle billing is a common billing system in which each patient is billed only once a month but groups of patients are billed every few days—spreads the work of billing over the month. Excellent!

22. Standard Collection Procedures Collection of payment if not paid during standard period is guided by Statute of limitations Set time limit on when a collection suit on a past-due account can legally be filed Time limit varies with type of account

23. Standard Collection Procedures (cont.) • Statute of limitations and account types • Open-book account • Open to charges made occasionally • Last date of payment or charge for each illness • Written-contract account • Contract with patient to pay over four installations • Regulated by Truth in Lending Act • Single-entry account • Account with only one charge • Shorter time limit than open-book accounts

24. Collection Procedures:Using Collection Techniques • Initial telephone calls or letters • Friendly and sympathetic • Call the patient at home • Do not • Call patients at work • Leave a message on an answering machine

25. Collection Procedures:Preparing Statements • Invoice with a courteous reminder that payment is due • Send a collection letter when account is past due • 60 days – nice but firm • 90 days – stronger wording • 120 days – final letter • Forward the account to a collection agency

26. Collection Procedures:Preparing an Age Analysis • The process of classifying and reviewing past-due accounts by age from the first date of billing • List all patients’ account balances and when the charges originated • Use patient ledger cards and color coded tags to indicate the number of days past due Click for Sample Age Analysis

27. Collection Procedures: Laws of Debt Collection • Fair Debt Collection Practices Act of 1977 • Prevents threats to take action that is illegal or that you do not intend to take • Eliminates abusive, deceptive, or unfair practices • Guidelines: • Do not call before 8 A.M. or after 9 P.M. • Do not make threats or use profane language • Do not discuss patient’s debt with anyone else • Do not use any form of deception or violence to collect a debt

28. Collection Procedures:Laws of Debt Collection (cont.) • Telephone Consumer Protection Act of 1991 • Protects against unwanted telephone solicitations (telemarketing) • Prohibits • Automated dialing device for calls to patients • Prerecorded calls to homes without prior permission • Unsolicited advertising via fax machine • Most provisions do not apply to medical practices

29. Collection Procedures: Observing Professional Guidelines • Appropriate to assess finances charges or late charges on past-due accounts if the patient is notified in advance • Must adhere to federal and state guidelines that govern these charges • The physician should use compassion and discretion when assigning charges in hardship cases

30. Collection Procedures (cont.) • Using outside collection agencies • Management of the account • Avoid collection agencies that use harsh or harassing collection practices • Provide agency with needed information only • Do not send bills to or contact patient; refer patient to collection agency

31. Collection Procedures (cont.) • Insuring accounts receivable • Protects the practice from lost income due to non-payment • Protects cash flow and ensures that the practice will have funds to cover expected expenses

32. Apply Your Knowledge Mr. Jansen has not paid his bill for an office visit three months ago. What will guide your attempt to collect this debt? • ANSWER: The statute of limitations, Fair Debt Collection Practices Act of 1977, and Telephone Consumer Protection Act of 1991 guide the attempt to collect this debt. Correct!

33. Credit Arrangements • Extending credit • Time to pay for services provided on trust when patient is unable to pay immediately • Performing a credit check • Must have current information • Patient’s address • Telephone number • SSN • Employer’s contact information

34. Credit Arrangements (cont.) • Employment verification • Call to verify • Credit bureau reports • Credit bureau – A company that provides information about the credit worthiness of a person seeking credit

35. Credit Arrangements:Laws Governing Credit • Equal Credit Opportunity Act • May not deny credit based on patient’s sex, race, religion, national origin, martial status, or age • Patient has right to know why credit was denied • Truth in Lending Act • Covers credit agreements that involve more than four payments • Must sign, discuss, and retain copies of a disclosure statement– awritten description of the agreed terms of payment

36. Credit Arrangements: Extending Credit • Unilateral decision • Physician decides that patient will be billed for full amount each month • Patient makes whatever payment possible each month • Mutual (bilateral) agreement • Between patient and physician • If no finance charges and if number of payments four or less, not subject to Truth in Lending Act

37. Apply Your Knowledge What two places will the medical assistant contact when performing a credit check? ANSWER: When performing a credit check, the medical assistant will need to contact the patient’s employer to verify employment and the credit bureau to obtain information about the creditworthiness of the patient seeking credit. Very Good!

38. Common Collection Problems • Hardship cases • Patients may be poor, uninsured, or underinsured • Patient relocation and address changes • Do not to discuss a debt with anyone except the person responsible for the charge • May ask for forwarding address only

39. Apply Your Knowledge What are common reasons for difficulty collecting a medical bill? ANSWER: A patient may be unable to pay the bill because of economic circumstances (poor, uninsured, underinsured, elderly and on limited income) or the patient moved and did not receive the invoice or provide a forwarding address. Right!

40. In Summary Medical Assistant Obtain payments by cash, check, or credit cards at the time medical services are provided Prepare and send invoices Assign the fee for these services and collect payment • Act as physician’s collection agent: • Telephone calls • Collection letters • Collection agency If no payment

41. End of Chapter End of Chapter 17 Remember that credit is money. ~ Benjamin Franklin