Collections

[DMK]

Hey guys!  This question pops up every month when I send out patient statements and I finally remembered to post it here.

What does the law say about past due patient accounts and sending to collections?  I was told that if you make a note to the patient that the account will be sent to collections, that it MUST be sent to collections.  That you can NOT "threaten" collections and then not follow through.

We have a "PFW" (Polite note on the statement after 60 days, Firm note up to one year, then Write it off but collect if the patient returns for treatment) system that works 98% of the time, but like everyone, we need to collect every cent that's owed to us and it gets more difficult every month.

I'm doing a better job at collecting up front for deductible and co-pays, but there's always the "oh, I'll pay on my next visit" people, then they don't come back.

Our worst offenders are the patients that come over while we're providing coverage for another doctor (who incidentally is the WORST collector, everyone gets a "deal" over there).  We've let his office know that his patient's will be expected to pay their co-pays and deductibles at time of service and this time when we covered we collected ALL we were due.

I guess the question is... Can I threaten collections in XXX # of days and not file if they still don't pay?

I look forward to any and all opinions (including the harsh ones), and if anyone has the legal "facts" I would greatly appreciate the help!

Dina

[PMRNC]

You have to follow both federal and state fair debt reporting laws. In some states it's actually illegal for anyone to do any type of collections without a bond. In other states you have to use the mini-miranda on all statements. Across the board if you threaten collections you must follow through exactly on that date you need to check your state laws for the amount of time to give a debtor. Collections is never black/white there's a lot of fine lines you can cross so make sure you do your homework on your state and federal rules.

[PMRNC]

Its funny you brought this up, I was going to do some further research because I just found out that NC wants to make third party billing companies get a surety bond, I know they are also entertaining this idea in NJ and NH. I was just talking to a collection attorney yesterday about this.

[DMK]

Thanks Linda!

I can always count on you for concise information.  It is as I suspected.  So PFW it is!  Luckily I never let our balances get out of hand, it's the dang $20 here and there that add up!

[PMRNC]

I know. with all my clients we have more problem with patient balances than we do the insurance payors. (overall speaking)
What I do is try to stay consistent by following that practices financial policies, each office should have one, it should be a guide for the billing staff to know the time frame to alert the patient, it should have a balance cutoff..etc  For example one of my clients uses a third party collection agency exclusively. According to their policy, accounts $over $34.99 (there is a methodology on that <g>) are sent with an alert to the patient with 30 days notice, ON day 31 that account because it's flagged in our system is automatically sent to the collection agency and removed from our system but I put them in another database linked to that provider because we cannot speak with patients who are sent to collections. That patient is then given the collection agencies contact information and they have to go through them to rectify the account. But all of that .. the entire procedure is in the practices office and financial policy and each patient is given a copy of that financial statement. That keeps things fair and it keeps the doctors from making special deals without our knowledge which could create problems.  I make sure EACH client gives me any office and financial policies which I keep in my office, I won't work for any practice without them. Some of them don't use collection services and then I have one doctor that will actually go to small claims for his balances over $300. Then of course there are the ones that simply don't want to spend the time or money chasing the collections <sigh> so after 3 billing attempts according to their policies those accounts can simply be written off.

Whenever a question like this comes up it's always best FIRST to ask the provider or consult their financial / office policy...then you have all the answers as things like that come up.