Getting Credit Information
How can you, the professional healthcare provider, improve your return on receivables and help ensure that your practice continues to be profitable?
When patients come to your office, your receptionist or secretary should have them fill out a simple patient information form. The information provided by the patient on the information form will prove critical to your billing and collection efforts. Your admitting personnel should be trained to obtain this information before admitting the patient for treatment.
The information should include:
• Patient's full name and birth date.
• The full name of the person financially responsible for the account, his or her street address, telephone number and the number of years that he or she has lived at that address.
• The Social Security Number and driver's license number of the person responsible for the account.
• The responsible person's present employer, the number of years he or she worked there, his or her job position or title, the name of the supervisor and the employer's address and telephone number.
• The address of the responsible person's previous employer and the number of years he or she worked there.
• The name, address and telephone number of the nearest relative not living with the responsible person and his or her relationship to the person.
• The name and address of the party that referred the patient.
Obtaining a Satisfactory Financial Agreement
• Ask for payment at the time of the treatment, if possible. Some providers offer a cash discount for payment at the time of service. This is an excellent way to improve cash flow. You must be careful, however not to violate government health plans or health maintenance.
Not Responsive to Your Collection Efforts?
There is a limit to the amount of time and effort that you should expend attempting to collect a past-due account internally. That limit has been reached when you have lost effective contact with your patient.
Further collection efforts on your part most likely will be unsuccessful if any of the following conditions apply:
• Failure to respond to your statements, letters or phone calls.
• A lapse in payment arrangements for no valid reason.
• Repeated complaints.
• Denial of responsibility.
• The patient moves and does not give you the new address.
• Indication of serious marital difficulties.
• Repeated changes in address and occupation.
If any of your patients with past-due accounts fit into these categories, it is time to refer the account to your collection specialist. Your collector knows how to recover your money while maintaining the patient's respect and confidence in you.
Don't delay - the longer an account remains unpaid, the more difficult it is to collect.
Should You Do It Yourself?
Some health professionals and hospitals feel that they can collect past-due accounts more profitable themselves. They want to save the fee charged by a collection service.
Here are some of the costs involved if you decide to do your own collecting:
Salaries - In addition to the salary of the collector, you should include the time you will need to spend supervising the collection operations.
Rent - Although it may be just a corner in your office, required space should be figured at the standard rental rate for space in your area. You are giving up space that you may need for expansion or that you might release and rent to someone else.
Postage - Your collection operation will require increased postage for the mailing of collection letters and statements.
Loss through lower recovery percentage -
Figure the cost to you if your collection ratio is less than it might be if you used a collection specialist. Your collection ratio must be at least equal to that of an outside collector in your area who has collection accounts similar to yours. Also, cost of doing your own collection should be less than the percentage fee charged by the specialist. Otherwise, you have gained nothing. If your costs exceed the collector's fee, you have lost money.
Another option would be to outsource or contract out certain billing and collection functions. Outpatient, self-pay receivables is just one area where an outside service can assist you. Firms that offer "early-out" or accelerated receivable management programs have the technology and trained staff to work these accounts much faster and cheaper than provider personnel. In addition, by outsourcing those functions, provider staff can concentrate more effectively on high balance account and other productive areas.
If you need to supplement your cash flow, healthcare receivable funding programs provide a line of credit and give up-front money for procedures covered by insurance.
Selecting a Collector
We are members of the American Collectors Association, Inc. (ACA). ACA is an international trade organization of credit and collection professionals who provide a variety of account receivable management service. Headquartered in Minneapolis, ACA serves members in the United States, Canada and 55 other countries worldwide.
ACA has approximately 4,400 members including third party collection agencies, credit grantors, attorneys and vendor affiliates. Members agree to comply with all applicable laws and regulations, as well as the ethical standards and guidelines established by the association. For more information, ACA's web site is located on-line at www.collector.com
ACA members also have access to extensive education programs that keep them up-to-date on federal laws relating to credit and collections and on the latest professional collection techniques.
Most collection services work on a contingency basis, meaning that if they collect, they earn a fee from the money collected. If they do not collect, there is no charge to you for their efforts. Some ACA members offer other types of compensation plans. We will be happy to answer any questions you may have regarding fee arrangements. Many ACA members do not require a written agreement with clients because the relationship is built upon mutual trust and confidence. If you desire a contract, we will be happy to work out an equitable agreement with you. When a contract is proposed, it is advisable to have it checked by your attorney, especially if the collection service is not a member of ACA.
We offer a complete professional collection service within our geographic trade area. In addition, we are able to forward accounts to another area, in situations where your debtor has moved, by using the annual ACA Roster that lists the approximately 4,400 member offices.
Through our membership in ACA, we can offer a variety of services to help you manage your receivables, including education, information about collection laws, and public relations and legislative programs and materials. Through us, many of these services are available to you.
Working Together
We hope that you will refer future accounts to us. When you do, there are some things you can do to make our relationship mutually profitable and effective:
• When a patient calls you as the result of a collector's efforts, refer the patient back to the collector to make payment arrangements.
• If a payment is made to you directly on an account referred to us, let us know immediately. This will enable us to keep our records up-to-date and ensure that your patient is given credit for the payment, Also, if we are unaware of direct payments, we could be accused of harassment under the federal Fair Debt Collection Practices Act (FDCPA) when we continue to contact the patient for payment. We are, of course, entitled to a full fee even if the payment is made directly to you, since we have done the job that you asked us to do.
• Requests for frequent progress reports impede rather than enhance collection productivity. Through we will do our best to keep you updated on the status of your accounts, it is to your advantage to limit requests to specific needs. This will permit us to bring the collection of your accounts to a speedy conclusion. We are as anxious to collect, as you are to have us collect, since that is how we earn our fees.
• We will remit to you at least once every 30 days unless you make some other arrangement with us.
• If you request it, we will return accounts to you. If, however, we have been successful in setting up a payment schedule or in partially collecting an account, we will expect to be reasonably compensated for the work we have done.
• We are your representative and want to work closely with you. If you have any questions about our services, feel free to discuss them with us.
As a healthcare provider and professional credit grantor, you have an obligation to your patients and to yourself to grant credit wisely, to obtain the necessary information about the patients to whom you are granting credit and to make sure that those who are able to pay their bills do so. By setting up credit granting, billing and collection policies and procedures - and by recognizing that time is the safest refuge of any debtor - you are well on your way toward fulfilling this obligation. We hope the ideas in this booklet will help you accomplish this goal.
When the time comes for you to turn your delinquent accounts over to a collection specialist, you can be assured that our office, a member of the American Collectors Association, Inc. (ACA), will give you the finest possible collection service.
