Medical Billing Ch. 15 Patient Billing and Collections

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Claim follow-up and payment processing Patient Billing and Collections

Patient billing and collections, last step in billing and reimbursement process involves:

- Generating and mailing patient statements showing patient balances owed.
- Posting patients' payment'
- Examining aging reports for patients' accounts & handling collections

Patient Financial Responsibility - defined in the Financial Policy of the Medical practice - they address all scenarios including:

- financial arrangements & payment plans
- payments not covered by insurance
- various special circumstances

Policies should handle:

- collection of copayments, deductibles & past-due balances
- financial arrangements for unpaid balances
- charity care or use of sliding scale for those w/ low incomes
- payments for services not covered by insurance
- prepayment for services
- day-of-service discounts/ discount to those in financial need
- acceptance of cash, checks, money orders & credit or debit cards
- special circumstances for auto accidents & nonassigned insurance

Effective patient billing includes:

educating patinets from the start of the billing & reimbursement process.

Patient Information Form

often presents a statement about payment responsibility (see pg 563)

Encounter to Claim amount due process

Patient Encounter
visit charges (transactions) entered in patient ledger
patient's balance is updated
claim is filed
resulting payment from patient's insurance carrier is posted, based on the RA/EOB

Resulting info. from RA/EOB

1. payer's payment for each procedure is entered
2. Amount patient owes for each reported procedure is calculated
3. If any part of a charge needs to be written off d/t payer's required adjustment, this amount is also entered.

PMP uses the RA/EOB information to

update the day sheet and patient ledger

Day sheet

report summarizing the business day's charges and payments (recorded in the PMP)

Patient Statement

shows services provided to a patient toatl payments made, total charges, adjustments and balance due

Patient Statements

printed bills that show the amount each patient owes; computer generated from day sheet and patient ledger / both of these records have screens in the Practice's PMP

Patient Ledger Cards

manually generated bills that show the amount each patient owes;

Patient statements must be:

accurate and easy to read... clearly stating:
- general info about the practice
- cost breakdown of all services provided
- date of statement & due date of payment (sometimes)
- balances owed
- Accepted methods of payment
Clear and accuracy ensure patients pay on time

payment Cards

accepted from patient at time of service... patient then receives a zero balance statement

Cycle Billing

type of billing that divides patients with current balances
into groups to even out monthly statement printing and mailing.

Guarantor Billing

grouping patient billing under the insurance policyholder. i.e. all of the family's recent charges can be categorized and sent together on one statement. (good for families w/ minor children)

Cycle billing

used to assign patient accounts to a specific time of the month and to standardize the times when statements will be mailed and payments will be due. i.e. if cycle is weekly, the patient accounts are divided into four groups / 1/4 of the bills go out each week.

Advantages/ Disadvantages of Guarantor Billing

- reduces amt. of time & $ spent on billing by reducing paper & mailing costs & reducing time spent on billing follow-up for those w/ overdue bills; fewer bills to track
- Can become difficult & cumbersome when family members have various health plans and / or secondary plans

Collections

all the activities related to patient accounts and follow-up; they should achieve a suitable balance between maintaining patinet satisfaction & generating cash flow

Billing Collectors may have these job functions:

- Billing / collections manager
- patient account representative (bookkepper)
- Collections specialist

Billing / Collections Manager

- responsible for establishing office policies & enabling collections specialists to successfully perform their jobs.
Create, implement, monitor, organize & develop, assist with, train, supervise & evaluate all that has to do with collections.

Collection Specialists

staff member with training in proper collections techniques, trained to work directly with the pratice's patients to resolve overdue bills. Must always act ethically, professionally... they represent the practice.

Embezzlement

stealing of funds by an employee or contractor - Dividing collections tasks among several people with helps reduce chances of employee errors or embezzlement

Avoiding opportunities for fraud

dividing tasks and responsibilities among several different people

Fair debt Collection practices Act (FDCPA) of 1977

laws regulating collection practices
Regulated by the Federal Trade Commission

Telephone Consumer Protection Act of 1991

law regulating consumer collections to ensure fair and ethical treatment of debtors
Regulated by the Federal Trade Commission

Collections from patients are

1. classified as consmer collections
2. regulated by federal and state laws

FTC Guidelines outlined in FDCPA and Telephone Consumer Protection Act:

- contact patients 1x/day only; leave no more than 3 messages per week
- do not call before 8am or after 9pm
- do not threaten or use foul language
- identify the caller, practice & purpose of call; don't mislead the patient
- don't discuss debt with anyone but patient
- no messages or emails detailing the debt owed
- contact via email if patient requests calls stop
- make calls to attorney if patient wishes,

Patient Aging Report

report grouping unpaid patients' bills by the length of time they remain due; Aging begins on the date of the bill.

patient aging reports

- contains patient's name
- most recent payment
- remaining balance
DIVIDES information into categores based on each statement's beginning date:
1. Current or up to date (36 days)
2. Past Due (31-60 days)
3. Past Due: (61-90 days)
4. Past Due (90+ days)

Claims Under Appeal

denied claim that's being appealed may not convert the account to 'past-due' status until the final appeal decision has been received.

Each practice sets its own procedures for collections process.

30 days.............bill patient
45 days.............call patient regarding bill
60 days.............letter 1
75 days.............letter 2 & call
80 days ............letter 3
90 days..............turn over to collections

Collections Letters

professional courteous, breif & to the point; Letter is first notice that their bill is past due. Gradually become more aggressive in wording.

Methods of Collections

Collections Letter (s)
Collections Calls
Documentation (specialists use abbreviations for common call results & situations)

Credit Arrangements & Payment Plans

Two federal laws govern payment arrangements:
1. Equal Credit Opportunity Act (ECOA)
2. Truth in Lending Act

Equal Credit Opportunity Act (ECOA)

prohibits credit discrimination on the basis of race, color, religion, national oirgin, sex, marital status, age, or because a person receives public assistance. (enforced by FTC)

Truth in Lending Act

law requiring disclosure of finance charges and late fees for payment plans;

Payment Plan

A practice may decide to extend credit to patients thu a PAYMENT PLAN that lets patients pay bills over time, rather than in a single payment.... practices may charge interest on these plans... terms must be agreed on by both parties.

Truth in Lending Act as it applies to Payment Plans

all terms must be disclosed and agreed upon before arragnement is finalized. If interest charged, or 4+ payments to be made plan is governed by TRUTH in LENDING ACT... part of the consumer Credit protection Act.

Credit Counseling & Debt Management programs

nonprofit organizations that can assist patients who are struggling to pay their bills or who have a great number of different bills; they contact creditors to work out payment plans at reduced costs to patients.... only 1 monthly payment made & then divided among creditors as agreed.

Payment Plan Design

practices have guidelines for appropriate time frames and minimum payment amounts for payment plans.

prepayment Plans

payment before major expensive procedures are performed... downpayment made & then monthly postpayments set up.

Collection Agencies and PHI

agencies must agree to follow practice's security & privacy policies to protect patients' PHI.
- Employees of Coll. Agencies must sign confidentiality agreements regarding PHI

When to Use a Collection Agency

- All attempts to contact patient have been unsuccessful & patient hasn't responded to letters or calls
- patient says they won't pay a bill
- bad check for lack of funds
- defaults on payment plan
- outdated patient contact info./ can't be located
- patient receives payment for service from insurance company & hasn't paid provider

Notice of Privacy Practices (NPP)- and Collections

explains practice's policy on when accounts are sent to an outside collector.

Collection Agency....

be careful choosing... they represent the Practice.
Choose a fair, ethical agency. ; Cost efficient way to retrieve some/all unpaid balances to cover some of practice's fees.

Types of Collection Agencies

Local, regional or national scale;
Local or regional understand patient's demographic surroundings
National has more tools to locate/contact debtors, often at lower cost

Credit Reporting

analysis of a person's credit standing during the collections process....
supplied by credit bureau for a cost....
shows record of unpaid bills/debt
regulated by law under the Fair Credit Reporting Act (FCRA) and the
Fair and Accurate Credit Transaction (FACTA)

Credit Bureaus

organizations that supply information about consumers' credit history

Fair Credit Reporting Act (FCRA)

law requiring consumer reporting agencies to have reasonable and fair procedures

Fair and Accurate credit Transaction Act (FACTA)

laws designed to protect the accuracy and privacy of credit reports. Amended FCRA in 2003.

FCRA and FACTA

designed to protect privacy of credit report information.

Red Flags Rule

law stating that health care entitles must estabilsh reasonable policies and procedures for implementing the identity theft guidelines.

Red Flags Rule

result of FACTA, Fair & Accurate Credit Transaction Act; focuses on prevention of identity theft. Enforced by FTC

Red Flag

means a pattern, practice or specific activity that indicates the possible existence of identity theft.

Examples of red flags

alerts or warnings from consumer reporting agencies, suspicious personal identifying information and documents (photo ID),

Skip Tracing

process of locating a patient who has an outsanding balance.

Methods of Skip Tracing

Tracing a Debtor (practice searches)
Professional Skip Tracing Assistance (for large practices)
Computerized Skip Tracing (online directories & databases- less expensive)
Effective Skip Tracing Calls

Bad Debt

Patient Account deemed uncollectible...

Uncollectible Account / Write-off account

monies that cannot be collected and must be written off / practice must determine which debts to write off in the PMP and whether to continue to treat the patients.

Means Test

process of fairly determining a patient's ability to pay... patient fills out a form and their income tax forms are reviewed, along with credit reports.

Bankruptcy

declaration that a person is unable to pay his or her debts / another reason for write-off.

Dismissing patients who do not pay

physician has the right to terminate the physician-patient relationship for any reason under the regulations of each state.

Patient Refunds

money that needs to be returned to patients when the practice has overcharged a patient for a service;

Patients' refunds or credit balances

are handled differently than insurance overpayments, which must be refunded to the payer.

Retention Schedule

practice policy goerning the handling and storage of patients' medical records. List of items from a record that are retained & for how long.

Record REtention

patients' medical recorrds & financial records retained per practice's policy. Federal laws, HIPAA and FACTA regulations also apply.

Retention Schedule

protects both the provider & the patient; record must be available for anyone within or outside of the practice who is caring for the patient.
- kept in case of legal proceedings

Practice Briefs

American Health Info. Management Assoc. publishes guidelines called practice briefs on many topics including retention of health information.

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