1. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Pearson's Comprehensive Medical Assisting Administrative and Clinical Competencies Second Edition CHAPTERCHAPTER CHAPTER 15 Fees, Billing, Collections, and Credit Lesson 1: Fees, Billing, Collections, and Credit

2. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Lesson Objectives Upon completion of this lesson, students should be able to … Define and spell the terms to learn for this chapter. Discuss how fees are determined and be able to discuss this with patients. Describe the various billing methods and preparation of billing statements. Identify the patient information required at the time of registration and thereafter to maintain the records needed for billing.

3. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Lesson Objectives Explain credit policy. List the steps in the collection process and identify the legalities involved. List the benefits of using electronic medical records.

4. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Critical Thinking Questions 1.How do physicians set their fees? 2.What factors might they consider?

5. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Factors Used To Determine Physician Fees Services provided Time it takes to provide the services Prevailing fee currently charged in the community

6. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Usual, Customary, and Reasonable Usual fee –What the physician usually charges Customary –The fee that is typically charged for a procedure by the majority of physicians with the same experience Reasonable fee –The fee that would be reasonable based on the difficulty and time required for the procedure

7. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Informing Patients of Fees and Payment Policies Patient should be informed prior to first appointment Information should include costs, office financial policies, and credit procedures Information can be conveyed in the first phone call with the patient and then a hard copy can be mailed to the patient Fee and payment policies should be posted in the office

8. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Methods for Securing Payment Collect payment at the time of the service; if cash is not possible, many offices now accept credit Bill the patient Use an outside collection agency

9. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Truth in Lending Form Used if credit is extended and it is determined that the patient will make set payments to the physician over four or more installments Form clearly states the amount financed, the finance charge, and the total of the payments Where there are no finance charges this is to be stated on the agreement form Original form is given to the patient and a copy is retained by the doctor and must be kept on file for two years

10. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Consent Form for Billing Allows the medical office to bill the insurance carrier on behalf of the patient for services provided Grants the office permission to forward information regarding the patient’s visit including procedures and diagnoses to the insurance company if requested Should be placed in file and updated annually

11. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Billing Methods Performed internally Generated by the physician’s office Generated externally through the use of a billing service

12. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Obtaining Payment from Patients For a video on Handling Patients’ Payments, click here, go to MyHealthProfessionsKit.com, or insert the DVD-ROM in the back of your book. click here

13. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Superbill Also known as the encounter form Can be used as a charge slip, statement, and insurance reporting form Two- or three-part carbonized form

14. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Superbill Provides a comprehensive list of patient services with codes and fees Prior to seeing a patient, one is attached to the chart. The physician marks the services as they are provided. A copy of the form is then provided to the patient as documentation Also used to report services to the insurance carrier

15. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Ledger Card and Mailing Statements One ledger card created for each patient Used to record charges, adjustments and payments for the patient When mailing a statement to the patient the ledger card can be copied and used as the statement The copy must be clear and legible and be seen through the envelope window ADDRESS CORRECTION REQUESTED should be indicated on the envelope

16. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Be sure and update this information every 6 to 12 months. Information Required for Billing Full name of patient Date of birth Residence and mailing address (no PO Box) Telephone numbers Address and telephone of nearest relative Insurance information Driver’s license number

17. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Methods Used for Billing Manual billing Computerized billing

18. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Billing Frequency Once-a-month –Requires statements to be sent to all patients who have an outstanding bill for arrival on the last day of the month Cycle billing –Statements are sent out in cycles throughout the month to groups of patients

19. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Billing Third-Party Payers and Minors Third-party payers are individuals other than the patient who have agreed to pay the patient’s bill Assignment of benefits ensures direct payment to the physician Minors can be billed if emancipated

20. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Steps in Preparing a Ledger Card Type or key into the computer the patient’s name in the following format: Last name first, first name, and middle initial Type or key into the computer the patient’s address including zip code If using copied paper ledger cards as patient bills, be sure to key in the patient name and address as they would be for an addressed envelope

21. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Steps in Preparing a Ledger Card Type or key into the computer the patient’s telephone number including area code. If applicable, the patient’s home, work and cell phone numbers should be documented. Type or key into the computer the patient’s insurance information including name, address, and telephone number of the insurance company, subscriber name and ID, group number, and effective date.

22. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Making Credit Arrangements with Patients During the appointment reminder call, remind patients of their obligation to pay Try to obtain payment at the time of service Provide a billing statement with request for payment to patients when they leave the office If credit arrangements are necessary, make them during the patient’s first visit Understand federal laws that affect credit such as the Truth in Lending Act

23. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Guidelines to Collections Obtain immediate payment when possible Use charge slips or superbills Secure accurate information about the patient Inform patients of their responsibilities Outline all fees and finance charges to the patient Confirm if third-party responsibility exists

24. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Guidelines to Collections Be consistent in following office policies on billing Establish collection procedures as needed Follow up on all commitments made by patients

25. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Reasons for Outstanding Bills Patient does not feel the bill is important Patient is unable to pay Patient does not understand the bill

26. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Affects of Having Delinquent Accounts Patients staying away from the office due to being embarrassed about their financial situation Possible implication of guilt on the part of the physician as to the quality of care that the patient received Loss of revenue

27. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Age Analysis Process of determining how long an account has been past due Computerized systems provide reports that indicate accounts that are 30, 60, and 90 days overdue The collection step needed is determined by the age of the account Manual systems utilize coding systems with various colors or flags attached to ledger cards to indicate the age of accounts

28. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Critical Thinking Question 1.What collection techniques do you think would be most effective, and why?

29. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Collection Techniques Personal interview with patient who is being seen in the office and has an outstanding account Reminder notices placed on bills mailed to patients Telephone calls Collection letters inserted with monthly statements Use of a collection agency

30. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Guidelines for Making a Collections Call Never threaten Do not call the patient’s workplace Identify the person prior to discussing account Never show anger

31. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Guidelines for Making a Collections Call Be honest regarding who you are and the intent of the call Do not harass or intimidate the patient Ask the patient when payment should be expected and document this information Politely thank the patient for their time and repeat back to the patient the terms agreed upon. Document the interaction in the patient’s financial record.

32. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Guidelines for Sending a Personalized Letter Insert the letter with the patient’s statement Do not ask why the payment is late In the letter an offer should be made to assist the patient with making payment arrangements The letter must convey the message that action will be taken to resolve the payment obligation

33. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Basic Rules and Guidelines to Drafting a Collection Letter Based upon the collection policy of the office, determine at what point the first letter is sent With the patient ledger card, and/or financial record in front of you, review the account activity prior to drafting the letter Locate the patient’s demographic information including their address Using the computer, compose a rough draft of the letter, ensuring that proper formatting, grammar, and punctuation are used

34. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Basic Rules and Guidelines to Drafting a Collection Letter The first paragraph should summarize the reason for the letter and any payments the patient has made on the account The second paragraph should state the desired action of the patient. This may simply be to contact the office, or may specifically state the expected payment amount and dates of the expected payment. Ensure that the letter is written in a polite tone without any threats for lack of compliance.

35. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Basic Rules and Guidelines to Drafting a Collection Letter The third, or closing paragraph should thank the patient in advance for their prompt attention to the matter and encourage the patient to contact the office Once the rough draft is complete, read through the document again checking for spelling, grammar and formatting errors Correct any errors, and print and sign the document

36. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Basic Rules and Guidelines to Drafting a Collection Letter Make a copy of the letter to be placed in the patient’s record and note the day the letter was mailed Place the letter in an addressed envelope and mail to the patient

37. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan A “Skip” An individual who owes money but has moved and left no forwarding information Steps to find skips: –Check the registration form to confirm information –Call telephone numbers and references to try and locate the individual –Ensure that “Address Correction Requested” has been placed on the billing envelope

38. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan For a video on Collecting the Money, click here, go to MyHealthProfessionsKit.com, or insert the DVD- ROM in the back of your book.click here Collecting the Money

39. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Other Special Collection Issues Bankrupt patients Deceased patients Statute of limitations

40. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Bankruptcy A patient who files for bankruptcy is protected by the court When notice of a patient’s bankruptcy is received, all collection attempts must cease and the medical office must file a claim for payment with the courts

41. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Claims Against Estates When a patient dies, a bill should be sent to the estate of the deceased Contacting next of kin will provide information regarding who is the administrator of the estate It is important to follow up with the collection of bills to prevent any impression of physician’s fault for medical care of the deceased patient

42. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Statute of Limitations Refers to the amount of time a legal collection suit may be brought against a debtor This will vary from state to state and should be verified with state agencies If you have aging accounts that are more than two or three years old, investigate the statute of limitations in your state before spending time, effort, and money to collect the debt

43. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Using a Collection Agency Check references of the agency Review their collection methods Interview the collection agency Determine the fees charged for the services Inform patient that his/her account has been turned over to the agency

44. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Using a Collection Agency Provide copies of patient information necessary for the collection agency Delete patient diagnosis from any information turned over to the agency Refer patients to the collection agency if there are any questions

45. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Posting a Payment from a Collection Agency After verifying the correct patient account to apply the payment to, align the patient’s ledger card to the next line on the day sheet Enter the patient’s name and previous balance into the appropriate column Enter the date of the payment, the name of the collection agency, and the amount of the payment in the appropriate columns

46. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Posting a Payment from a Collection Agency Enter the amount of the payment on the deposit portion of the day sheet in the checks column Subtract the payment from the previous patient balance and record the new balance on the patient’s ledger card

47. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Posting a Payment from a Collection Agency If an adjustment is to be made to the account due to the collection agency fee, record the amount in brackets [ ] in the adjustment column of the ledger card. Enter as the description “collection agency fee.” Subtract the amount of the adjustment from the previous patient balance and record the new balance on the patient’s ledger card

48. Copyright ©2011 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Pearson's Comprehensive Medical Assisting: Administrative and Clinical Competencies, 2/e Beaman Fleming-McPhillips Routh Gohsman Reagan Questions?