1. Patient Billing and Collections17
Patient Billing and Collections

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. Introduction
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
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. 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. Determine Appropriate Fee
Fee schedule is based on
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 90th percentile of all fees charged by comparable doctors for the same procedure

8. Determine Appropriate Fee (cont.)
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

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

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

12. Accepting Payment (cont.)
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

13. Pegboard System Not often used Post payment on ledger card
Generates receipt at same time

14. Determining Payment Responsibility
Third-party liability – responsibility of insurance company to pay
Minors
Parents or person with legal custody
Emancipated minor
Elderly patients/patients with disabilities –proof of guardianship

15. Determining Payment Responsibility (cont.)
Refunding and overpayment
Maintaining a credit balance
vs.
Refunding overpayment
Professional courtesy – waived charges or accept amount that the insurance pays

16. Apply Your Knowledge Good Job!
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. Preparing Invoices Preparing and mailing Using codes on the invoice
Patients who do not pay at time of appointment
Patients who make only a partial payment
Using codes on the invoice
For common procedures
Itemized list on invoice
Using ledger cards – photocopy and send to patient

18. Preparing Invoices (cont.)
Generating computer invoice – print invoice for balance due
Using independent billing services
Sending invoices electronically

19. Using the Superbill Encounter form Includes May be computerized
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

21. Excellent! 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 – sets time limit on when a collection suit on a past-due account can legally be filed

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. 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. Using Collection Techniques (cont.)
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 before forwarding to a collection agency

26. 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. Sample Age Analysis
Back

28. Laws Governing 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

29. Laws Governing 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

30. Observing Professional Guidelines for Finance Charges and Late Charges
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

31. 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

32. 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

33. Correct! 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!

34. Credit Arrangements
Credit – gives the patient time to pay for services provided on trust when patient is unable to pay immediately
Performing a credit check
Must have current information
Verify employment
Request a credit bureau report

35. Laws Governing Extension of 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 – a written description of the agreed terms of payment

36. Extending Credit Unilateral decision Mutual (bilateral) agreement
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. Very Good! 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
 17.1 Accounts receivable is important to a medical practice. An understanding of accounts receivable ensures that money is collected, managed, and documented properly.
17.2 Payments from patients can be accepted by check, debit card, cash, and credit cards. Give a charge slip to the patient and place a copy of the charge slip in the medical record. Record on the ledger sheet to track accounts receivable.
17.3 Preparing an invoice is essential in the medical office. Invoices can be computer-generated, and you can apply all of the necessary information, such as name and amount due.

41. In Summary (cont.)
17.4 To manage a billing cycle efficiently, maintain consistency in sending out bills.
17.5 Standard collection techniques include calling or writing patients to determine the reason for non- payment or to set up a payment arrangement.
17.6 To perform a credit check, you must have current information. Make sure you get the patient’s consent to perform a credit check.

42. In Summary (cont.)
17.7 Credit arrangements for patients include extending credit based on trust, performing employment verification, and requesting a credit report.
17.8 Two of the most common collection problems are 1) patients who cannot make payment; and 2) patients relocating without providing forwarding information.

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