Presentation on theme: "Collections in the Medical Office"— Presentation transcript:
1 Collections in the Medical Office 10Collections in the Medical Office
2 Learning Outcomes When you finish this chapter, you will be able to: 10-2When 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.10.3 Identify the laws that regulate collections from patients.Demonstrate how to post a payment from a collection agency.10.5 Discuss the process of writing off uncollectible accounts.10.6 Explain how to use a patient aging report to identify past due accounts.
3 Learning Outcomes (Continued) 10-3When you finish this chapter, you will be able to:Demonstrate how to add an account to the collection list.10.8 Demonstrate how to create a collection letter.10.9 Demonstrate how to create a collection tracer report.
4 Key Terms collection agency collection list collection tracer report 10-4collection agencycollection listcollection tracer reportpayment planprompt payment lawstickleruncollectible accountswrite off
5 10.1 Laws Governing Timely Payment of Insurance Claims 10-5Receiving prompt payment for services is a critical factor in determining the financial success of a medical practicePrompt 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 payersLearning Outcome: 10.1 Explain the importance of prompt payment laws.Page: 344Insurance carriers can dispute claims.They can contend that patient care services were not medically necessary or that the method in which services were provided violated the payer provider contract.Resubmitting rejected claims is a time consuming process, resulting in increased practice expenses and more delay in payment.Prompt payment laws exampleNew York Prompt Payment Law, when a managed care organization or insurance company fails to make payment on a clean claim within forty-five days of submission, the physician is entitled to receive interest on the late payment at the rate of 12 percent per year.If a clean claim is not paid within the allotted time frame, the payer should be notified in writing that payment has not been received according to applicable prompt payment laws.
6 10.2 The Importance of a Financial Policy 10-6Collection process begins with a clear financial policy and effective communications with patients about their financial responsibilitiesImportant to have a written financial policy that spells out patients' responsibilitiesLearning Outcome: 10.2 Summarize the importance of a financial policy in a medical office.Pages:The average patient is now responsible for paying nearly 35 percent of medical bills, more than three times the amount paid by a patient in 1980.Patients’ reasons for not paying include• Lack of insurance• Lack of financial resources• Significant medical costs• Consumer-directed health plans with high out-of-pocket costs• Lack of understanding that payment is their responsibility
7 10.2 The Importance of a Financial Policy (Continued) 10-7Financial policies should tell patients how the practice handles:Collecting copayments and past-due balancesSetting up financial arrangements for unpaid balancesProviding care for patients with low incomesPayments for services not covered by insuranceCollecting prepaymentsAccepted methods of paymentLearning Outcome: 10.2 Summarize the importance of a financial policy in a medical office.Pages:Despite the practice’s efforts to communicate the financial policy to all patients, some individuals still do not pay in full and on time.Some practices send all accounts that are past thirty days to an outside agency.
8 10.3 Laws Governing Patient Collections 10-8Patient collections are consumer collections and are regulated by federal and state lawsCollections from insurance carriers are considered business collectionsLearning Outcome: 10.3 Identify the laws that regulate collections from patients.Pages:
9 10.3 Laws Governing Patient Collections (Continued) 10-9Fair Debt Collection Practices Act of 1977Telephone Consumer Protection Act of 1991General guidelines:No calls before 8 am or after 9 amNo threats or profane languageRespect patient privacyNo deception or violenceLearning Outcome: 10.3 Identify the laws that regulate collections from patients.Pages:If the practice’s printed or displayed payment policy covers adding finance charges on late accounts, it is acceptable to do so. The amount of the finance charge must comply with federal and state law.
10 10.3 Laws Governing Patient Collections (Continued) 10-10A 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 timeTruth in Lending Act applies if practice adds finance charges and payments are made in more than four installmentsLearning Outcome: 10.3 Identify the laws that regulate collections from patients.Pages:If no finance charges are applied to unpaid balances, this type of arrangement is between the practice and the patient, and no legal regulations apply.The agreement must be signed by the practice manager and the patient.
11 10.4 Working with Collection Agencies 10-11A collection agency is an outside firm hired to collect on delinquent accountsPractice no longer contacts the patient if the account is turned over to a collection agencyOften paid on the basis of the amount of money they collectWhen payment is received from a collection agency, it must be posted to the patient’s accountInformation found on the statement provided by the agencyExercise 10-1Learning Outcome: 10.4 Demonstrate how to post a payment from a collection agency.Pages:The agency provides a statement that shows which patient accounts have paid, and the amounts of the payments.Perform Exercise 10-1
12 10.5 Writing Off Uncollectible Accounts 10-12When all collection attempts are exhausted, the collection process is endedAmount owed is often called an uncollectible account or a bad debt, and it is written off the practice’s expected accounts receivableA write off is a balance that has been removed from a patient’s accountExercise 10-2Learning Outcome: 10.5 Discuss the process of writing off uncollectible accounts.Pages:Perform Exercise 10-2
13 10.6 Using a Patient Aging Report for Collections 10-13An 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 daysPast: 31 to 60 daysPast: 61 to 90 daysPast: 91 to 120 daysPast: More than 120 daysExercise 10-3Learning Outcome: 10.6 Explain how to use a patient aging report to identify past due accounts.Pages:Used monitor collection activities for patients and insurance.The collection process begins with an analysis of the aging report, which shows the status of each account over time.Perform Exercise 10-3
14 10.7 Adding an Account to the Collection List 10-14Overdue accounts are added to a collection listThe collection list is designed to track activities that need to be completed as part of the collection processTicklers or collection reminders are displayed as collection list itemsA tickler is a reminder to follow-up on an account that is entered on the collection listLearning Outcome: 10.7 Demonstrate how to add an account to the collection list.Pages:Collection List located on Activities menu.
15 10.7 Adding an Account to the Collection List (Continued) 10-15The Collection List dialog box displays ticklers that have been entered into the databaseLearning Outcome: 10.7 Demonstrate how to add an account to the collection list.Pages:
16 10.7 Adding an Account to the Collection List (Continued) 10-16Tickler Item dialog boxExercise 10-4Tickler tabOffice Notes tabLearning Outcome: 10.7 Demonstrate how to add an account to the collection list.Pages:A new tickler item is created by pressing the New button in the Collection List dialog box.Once a new tickler has been saved, the program automatically assigns a unique identifier code to the item.For patient-responsible ticklers, the balance is the balance shown in Transaction Entry.Perform Exercise 10-4
17 10.8 Creating Collection Letters 10-17Before collection letters can be sent in Medisoft:Patient-responsible tickler item must be entered in the collection listCollection Letter report must be createdReport is generated when the Patient Collection Letters option is selected on the Reports menuLearning Outcome: 10.8 Demonstrate how to create a collection letter.Pages:
18 10.8 Creating Collection Letters (Continued) 10-18The Patient Collection Report lists patients with overdue accounts to whom statements have been mailedLearning Outcome: 10.8 Demonstrate how to create a collection letter.Pages:
19 10.8 Creating Collection Letters (Continued) 10-19After printing collection letters, an account alert appears in the Transaction Entry, Quick Ledger, and Appointment Entry windowsThere are three account alert abbreviations:RB – remainder balanceDP – delinquent on payment planIC – in collectionsExercise 10-5Learning Outcome: 10.8 Demonstrate how to create a collection letter.Pages:Perform Exercise 10-5
20 10.9 Creating a Collection Tracer Report 10-20A collection tracer report is used to keep track of collection letters that were sentThe report lists:Tickler item numberResponsible partyChart numberAccount balanceDate collection letter was sentReasons the account is in collectionsCreated via the Collection Tracer Report feature on the Reports menuExercise 10-6Learning Outcome: 10.9 Demonstrate how to create a collection tracer report.Pages:Perform Exercise 10-6