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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. 10.2 Summarize the importance of a financial policy in a medical office. 10.3 Identify the laws that regulate collections from patients. 10.4 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. 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. 10.8 Demonstrate how to create a collection letter. 10.9 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) 10-10 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 10-11 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 10-12 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 10-13 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 10-14 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) 10-15 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) 10-16 Tickler Item dialog box Exercise 10-4 Tickler tabOffice Notes tab

17 10.8 Creating Collection Letters 10-17 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) 10-18 The Patient Collection Report lists patients with overdue accounts to whom statements have been mailed

19 10.8 Creating Collection Letters (Continued) 10-19 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 10-20 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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