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Chapter 10 Office and Insurance Collection Strategies Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.
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Chapter 10

Office and Insurance Collection Strategies

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

2

Chapter 10

Lesson 10.1

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

3

Learning ObjectivesDefine credit and collection key words

terminology and abbreviations.Define accounts receivable and explain

how it is handled.Recite types of fee adjustments available

to patients.Name payment options available to

patients.Define aging analysis.List the names of the federal credit laws

applicable to a physician office setting.

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

4

Cash Flow Cycle

Physician revenue largely from reimbursement by third-party payers

Insurance contracts with payersReimbursement provisionsMedical services not coveredPatient responsibilitiesReimbursement process

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

5

Reasons for Accounts Receivable

Increased healthcare expensesHealth care perceived as a rightLegal proceedingsInsurance delays

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

6

New Patient Confirmation Letter

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

FIGURE 10-2 New patient confirmation letter emphasizing information to incorporate when writing to a new patient.

7

Signs of Potential Nonpaying Patient

incomplete information on registration form

multiple changes of residencequestionable employment recordno business or home telephonepost office box listed with no street

address; or motel address listedincomplete insurance informationno referral

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

8

Fee Adjustments

discountcash discountsfinancial hardshipwrite-offsprofessional courtesycopayment waiverno chargereduced fee

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

9

Ledger Card

Financial Accounting Record

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

FIGURE 10-3 Electronic hard copy of a patient’s financial accounting record showing dun messages, posted payments, and cash discount.

10

Communicating Fees Be courteous at all times but express a firm,

businesslike approach that will not offend the patient.

Never badger or intimidate a patient into paying; merely state the payment policy and educate the patient.

Inform the patient of the fee and any deductible and balance due in a clear manner.

Verify the patient’s copayment listed on his or her insurance card and collect this amount before the patient’s office visit.

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

11

Communicating Fees (cont’d.)

Make it easier for the patient to pay rather than leave without making payment.

Do not give the patient an option by asking if he or she would like to pay now or have a bill sent.

Motivate the patient to pay by appealing to his or her honesty, integrity, and pride.

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

12

Collecting Fees

Payment at time of servicePayment by checkItemized statements

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

13

Financial Agreement Form

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

FIGURE 10-7 Financial payment plan agreement that provides full disclosure of all information by the Truth in Lending Act, Regulation Z.

14

Demand Letter for Returned Check

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

Hi Jennifer, ?Thank you,Stephen

FIGURE 10-9 Demand letter for returned check. This letter serves as a formal notice to collect payment and notifies a patient of impending legal action.

15

Itemized Statement

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

FIGURE 10-10 Computerized statement. A credit card option should be printed near the bottom of the statement to encourage payment. (Form adapted courtesy Bibbero Systems, Inc., Petaluma, CA; phone: 800-242-2376; fax: 800-242-9330; www.bibbero.com.)

16

Collection Decision Tree

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

FIGURE 10-11 Collection decision tree. This is a quick reference used to help determine when to send statements, make telephone calls, and send accounts to a collection agency.

17

Billing and Collection Guidelines

First statement at time of serviceMail second itemized statementThird statement 30 days laterFirst phone call/suspenseSecond phone call with 5-day noticeWritten 10-day notice with next stepsTake steps indicated in prior statement

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

18

Payment Options

cashcheckcredit cardonline paymentdebit carde-checkspayment plans

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

19

Credit and Collection Laws

Equal Credit Opportunity ActFair Credit Reporting ActFair Credit Billing ActTruth in Lending ActTruth in Lending Consumer Credit Cost

DiscloserFair Debt Collection Practices ActStatute of limitations

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

20

Chapter 10

Lesson 10.2

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

21

Learning Objectives

Perform oral and written communication collection techniques.

State the role of a billing service, collection agency, and credit bureau in the collection process.

Explain the purpose of small claims court in the collection process.

Name basic actions in tracing a debtor who has moved and left no forwarding address.

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

22

Telephone “Don’ts”

Don’t raise your voice.Don’t accuse the patient of lying.Don’t act tough.Don’t consent to partial payment.Don’t debate.Don’t report disputed accounts to

collection agency or bureau.

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

23

Collection Form Letter

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

FIGURE 10-15 Collection form letter sent to all patients who have not responded after two billing cycles.

24

Multipurpose Collection Letter

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

FIGURE 10-16 Multipurpose collection letter with checklist. This advises the patient of a seriously past due account, offers the patient three payment options, and warns the patient that failure to respond will result in a referral to a collection agency.

25

Collection Abbreviations

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

26

Insurance Payments

History of accountsCoinsurance paymentsInsurance checks sent to patientsManaged care organizationsMedicareMedigap insuranceWorkers’ compensationSuing a third-party payer

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

27

When to Use a Collection Agency

when patient says he/she won’t paywhen patient breaks promise to paywhen partial payments, but 60-day lapsefailure to respondreturned checkinsurance company payment not

forwardedmisinformationcan’t be located

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

28

Collection Agencies

Choosing an agencyTypes of agenciesAgency operating techniquesAgency chargesAgency assigned accounts

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

29

Filing a Court Claim

Obtain claim of plaintiff form.File papers with the court.Pay the filing fee.Arrange to serve the defendant.Set trial date.

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

30

Tracing a Debtor (“Skip”)

Check the address on returned envelope.Check the ZIP code.File a request at the post office.Look in the phone book.Call the primary care physician.Check with hospital accounts department.Inquire at place of employment.Call contacts on patient’s registration form.

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

31

Special Collection Issues

bankruptcyterminally ill patientsestate claims

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

32

Types of Bankruptcy

Chapter 7Chapter 9Chapter 11Chapter 12Chapter 13

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

33

Filing an Estate Claim

Confirm death.Pursue payment from third parties.Contact the county.File the claim.Send itemized statement to the

attorney.Follow up as needed.

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

34

Patient Complaints

Listen.Thank the person.Apologize.Answer the complaint.Be professional, sincere.Take it seriously.Respond in letter form.Be cordial.

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.

35

Other Considerations

Collection controlsEmbezzlementPrecautions for financial protectionBonding

Copyright © 2012, 2010, 2008, 2006, 2004, 2002, 1999, 1997, 1995, 1989, 1981, 1977 by Saunders, an imprint of Elsevier Inc. All rights reserved.


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