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10 Collections in the Medical Office. Learning Outcomes When you finish this chapter, you will be able to: 10.1 Explain the importance of prompt payment.

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Presentation on theme: "10 Collections in the Medical Office. Learning Outcomes When you finish this chapter, you will be able to: 10.1 Explain the importance of prompt payment."— Presentation transcript:

1 10 Collections in the Medical Office

2 Learning Outcomes When you finish this chapter, you will be able to: 10.1 Explain the importance of prompt payment laws Summarize the importance of a financial policy in a medical office Identify the laws that regulate collections from patients Demonstrate how to post a payment from a collection agency Discuss the process of writing off uncollectible accounts Explain how to use a patient aging report to identify past due accounts. 10-2

3 Learning Outcomes (Continued) When you finish this chapter, you will be able to: 10.7 Demonstrate how to add an account to the collection list Demonstrate how to create a collection letter Demonstrate how to create a collection tracer report. 10-3

4 Key Terms collection agency collection list collection tracer report payment plan prompt payment laws tickler uncollectible accounts write off 10-4

5 10.1 Laws Governing Timely Payment of Insurance Claims 10-5 Receiving prompt payment for services is a critical factor in determining the financial success of a medical practice Prompt payment laws are state laws that mandate a time period within which clean claims must be paid and that call for financial penalties to be levied against late payers

6 10.2 The Importance of a Financial Policy 10-6 Collection process begins with a clear financial policy and effective communications with patients about their financial responsibilities Important to have a written financial policy that spells out patients' responsibilities

7 10.2 The Importance of a Financial Policy (Continued) 10-7 Financial policies should tell patients how the practice handles: – Collecting copayments and past-due balances – Setting up financial arrangements for unpaid balances – Providing care for patients with low incomes – Payments for services not covered by insurance – Collecting prepayments – Accepted methods of payment

8 10.3 Laws Governing Patient Collections 10-8 Patient collections are consumer collections and are regulated by federal and state laws Collections from insurance carriers are considered business collections

9 10.3 Laws Governing Patient Collections (Continued) 10-9 Fair Debt Collection Practices Act of 1977 Telephone Consumer Protection Act of 1991 General guidelines: – No calls before 8 am or after 9 am – No threats or profane language – Respect patient privacy – No deception or violence

10 10.3 Laws Governing Patient Collections (Continued) A payment plan is an agreement between a patient and a practice in which the patient agrees to make regular monthly payments over a specified period of time – Truth in Lending Act applies if practice adds finance charges and payments are made in more than four installments

11 10.4 Working with Collection Agencies A collection agency is an outside firm hired to collect on delinquent accounts – Practice no longer contacts the patient if the account is turned over to a collection agency – Often paid on the basis of the amount of money they collect When payment is received from a collection agency, it must be posted to the patient’s account – Information found on the statement provided by the agency Exercise 10-1

12 10.5 Writing Off Uncollectible Accounts When all collection attempts are exhausted, the collection process is ended Amount owed is often called an uncollectible account or a bad debt, and it is written off the practice’s expected accounts receivable A write off is a balance that has been removed from a patient’s account Exercise 10-2

13 10.6 Using a Patient Aging Report for Collections An aging report shows the patient’s chart number and name, and the amount of unpaid charges in each of these categories: – Current: Up to 30 days – Past: 31 to 60 days – Past: 61 to 90 days – Past: 91 to 120 days – Past: More than 120 days Exercise 10-3

14 10.7 Adding an Account to the Collection List Overdue accounts are added to a collection list The collection list is designed to track activities that need to be completed as part of the collection process – Ticklers or collection reminders are displayed as collection list items A tickler is a reminder to follow-up on an account that is entered on the collection list

15 10.7 Adding an Account to the Collection List (Continued) The Collection List dialog box displays ticklers that have been entered into the database

16 10.7 Adding an Account to the Collection List (Continued) Tickler Item dialog box Exercise 10-4 Tickler tabOffice Notes tab

17 10.8 Creating Collection Letters Before collection letters can be sent in Medisoft: – Patient-responsible tickler item must be entered in the collection list – Collection Letter report must be created Report is generated when the Patient Collection Letters option is selected on the Reports menu

18 10.8 Creating Collection Letters (Continued) The Patient Collection Report lists patients with overdue accounts to whom statements have been mailed

19 10.8 Creating Collection Letters (Continued) After printing collection letters, an account alert appears in the Transaction Entry, Quick Ledger, and Appointment Entry windows There are three account alert abbreviations: – RB – remainder balance – DP – delinquent on payment plan – IC – in collections Exercise 10-5

20 10.9 Creating a Collection Tracer Report A collection tracer report is used to keep track of collection letters that were sent The report lists: – Tickler item number – Responsible party – Chart number – Account balance – Date collection letter was sent – Reasons the account is in collections Created via the Collection Tracer Report feature on the Reports menu Exercise 10-6


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