1. Billing and Collections Chapter 20 ICBS 120

2. Credit and Collections Policies Each office should have a formalized policy regarding billing and collection. It is always helpful to contact the insurance carrier and complete an estimation of patient responsibility prior to the first appointment. Some office will ask for any coinsurance at the first appointment. The patient should always be advised of any expected payment prior to the appointment. A good time to do this is during reminder calls.

3. Truth-in-Lending Act Also called the Consumer Credit Protection Act of 1968 which was established to protect consumers by requiring providers of installment credit state the charges clearly in writing and express the interest as an annual rate. Any finance charges must be advised in writing prior to being charged.

4. Past Due Accounts The most common reasons for past due accounts include: Inability to pay. People may have financial hardships from time to time. Negligence. People may forget to make a payment because they have been away or dealing with a family emergency. Unwillingness to pay. When a patient complains about a charge or refuses to pay, it may have nothing to do with finances. These patients should be referred to the physician or office manager for immediate attention.

5. Aging Accounts Account aging is a method of identifying how long an account is overdue. This means that past due accounts are identified according to the length of time they have been unpaid.

6. Telephone Collections Callers must identify themselves and ascertain that they are talking to the person who is responsible for the account In most states, a debtor may be contacted only between 8am-9pm Do not threaten to turn the person over to collection agencies Kill them with kindness - try to work out a payment plan.

7. Collection Letters Collection letters are sent to encourage patients and third-party carriers to pay overdue balances. Each office has it’s own policy on when letters are sent.

8. Use of small claims court Typically, small claims court handles cases that involve only limited amounts of debt (varies state to state), they do not permit representation by an attorney, and they are generally efficient and streamlined in their proceedings. If the court finds in the medical office’s favor, the medical office still must collect the money from the defendant.

9. Bankruptcy If a patient has declared bankruptcy, statements may no longer be sent nor any attempt be made to collect delinquent accounts Medical bills are unsecured debt and will the last one paid, if there are any assets in the case to be dispersed.

10. Statute of Limitations A statute of limitations is a statute that defines the period in which legal action may take place. The time period in which legal action must take place against any of these accounts varies from state to state; if an unpaid account is more than three years old, it is wise to investigate the statue of limitations in your state before spending time and effort in collections.

11. Summary Billing and collections activities are intricately linked to daily financial practices and claims processing, and the person responsible for billing should be well aware of these other functions. Billing does not have to be a complex or elaborate system but it needs to be precise, professional, and comprehensive, as all communications with patients should be. If collections become necessary, courteous and straightforward letters and telephone exchanges are the most effective. The goal of all billing and collections is to maintain the relationship with the patient while ensuring good cash flow and payment of accounts receivable in the clinic.