© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 20 Billing and Collections

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Billing Procedures

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Billing Procedures Timeliness and accuracy important Streamline billing process Billing efficiency report used to monitor efficiency

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Credit and Collection Policies Well-defined policy related to patient billing and collecting Patient-information brochure Questions providers may want to address

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Payment at Time of Service Inform patients when appointment made: –Whether provider has contract with their insurance carrier –How payment made if insurance does not cover procedures –Whether they can be billed for co-payments and coinsurance –How payment made for services if they have no insurance –Approximate cost of service if appropriate

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Payment at Time of Service Increasingly accept debit and credit card payments Most insurance contracts require provider to bill insurance company before billing patient, except for co- payment Abide by each contract Patients treated the same and charged the same for services

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Truth in Lending Act Clinic policy dictates if interest is charged Regulation Z of Consumer Protection Act of 1967 Agreement must be in writing and must provide information on any finance charge Patient given original copy of disclosure statement

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Components of a Complete Statement Statement should contain: –Patient’s name, address, insurance carrier and identification number –Date and place of service –Description of service and fee for each service

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Components of a Complete Statement Statement should contain: –Procedure and diagnosis codes for insurance processing –Provider’s signature and identification code or National Provider Identifier (NPI) –Clinic name, address, telephone number, fax number, Web site when applicable

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Components of a Complete Statement Computerized statements –Most commonly used for statements –Search patient database for outstanding balances and print statements –Ages accounts –If insurance to be billed, claim automatically uploaded electronically to third-party payers –Statements printed for patient

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Monthly and Cycle Billing Monthly billing –Devote one or two days per month to billing and mailing statements –Place in mail 25th of month –Time consuming

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Monthly and Cycle Billing Cycle billing –Divide accounts alphabetically into groups –Each group billed at different time

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Past-Due Accounts Inability to pay Negligence Unwillingness to pay Third-party payees Minors

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Collection Process Establish how much owed and for how long Prompt and conducted in timely fashion

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Collection Process Collection ratio –Divide total collections by net charges –Obtain ratio monthly, quarterly, yearly –Goal is 90% or better Accounts receivable ratio –Divide current accounts receivable balance by average monthly gross charges –Goal is payment in less than 2 months

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Aging Accounts Identifies how long account has been overdue Pegboard system –Color-coded strips may be attached to ledgers –Written code written on ledger card to indicate when overdue notice was mailed

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Aging Accounts Computerized aging –Key appropriate commands to age accounts –Can age accounts by several criteria –Generates accounts receivable report –Additional types of reports available

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Collection Techniques Billing insurance carriers –Both telephone and written communications –Computer claim within 2 days or less –Electronic claims transmission (ECT) –Maintain up-to-date claims register or insurance- pending report –Follow-up collection policy

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Collection Techniques Telephone collections –Effective; patient may respond to call more than to bill received in mail –Successful calls require tact and diplomacy –Work with patients to encourage and enable them to pay fees they owe –Legal rules and ethical guidelines govern telephone collections Fair Debt Collection Practices Act (FDCPA)

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Collection Techniques Collection letters –Sent to encourage patients to pay overdue balances –Office policy will help determine when to send –Collection letters and notes kept separate from patient’s chart

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Use of an Outside Collection Agency Used for highly delinquent accounts Discretion advised Expense of collection may not justify fees to be collected

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Use of an Outside Collection Agency Seek collection agency compatible with medical practice’s philosophy Follow instructions of collections agency Keep record of accounts given to agency

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Use of Small Claims Court Handle cases that involve only limited amounts of debt If court finds in clinic’s favor, clinic still must collect money from defendant Account assigned to collection agency cannot be filed in small claims court

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Special Collection Situations Bankruptcy –Statements may no longer be sent nor any attempt be made to collect delinquent accounts –Chapter 7 Proof-of-claim form of patient’s account filed –Chapter 13 Patients allowed to pay bills over time by court- determined amount –Unsecured medical debts are usually last to be paid

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Special Collection Situations Estates –Fee collection goes to executor of estate –Guidelines Show courtesy Prepare itemized statement Mail to executor of estate Address statement to “Estate of (name of patient)” Contact probate court for additional information

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Special Collection Situations Tracing “skips” –Check address –Call patient –Facility decides whether to pursue unpaid debt –Account can be turned over to collection agency

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Statute of Limitations Defines period in which legal action may take place Defined by class into which account falls –Open book accounts –Written contracts –Single-entry accounts State-by-state limitations (

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Maintain a Professional Attitude Collecting past-due accounts difficult and can be discouraging Quickly identify accounts that cannot be collected and write them off Keep any bias and emotions out of process

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Maintain a Professional Attitude Rely only on information from aged account Strive for a “win-win” as much as possible Staff may need additional training and education