13.5 Collecting Outstanding Patient Accounts 13-43 Introduction to Collections The term collections refers to all the activities that are related to patient accounts and follow-up. Collection activities should achieve a suitable balance between maintaining patient satisfaction and generating cash flow. While most patients pay their bills on time, every medical practice has patients who do not pay their monthly statements when they receive them. Many simply forget to pay the bills and need a reminder, but others require more attention and effort. A great deal of accounts receivable can be tied up in unpaid bills, and these funds can mean the difference between a successful and an unsuccessful practice. Learning Outcome 13.5 - Apply regulations and guidelines to the collection process. TEACHING NOTES Steady cash flow is needed to maintain the office and pay bills.

13.5 Collecting Outstanding Patient Accounts Cont. 13-44 Collections Cont. A patient may not pay a bill for several reasons: The patient thinks the bill is too high. The patient thinks that the care rendered was not appropriate or not effective. The patient has personal financial problems. The bill was sent to an inaccurate address. There is a misunderstanding about the amount the patient’s insurance pays on the bill. Learning Outcome 13.5 - Apply regulations and guidelines to the collection process. TEACHING NOTES Patients’ addresses should be updated periodically to avoid bills being returned as undeliverable.

13.5 Collecting Outstanding Patient Accounts Cont. 13-45 Regulations Collections from patients are classified as consumer collections and are regulated by federal and state laws. The Federal Trade Commission enforces the Fair Debt Collection Practices Act (FDCPA) of 1977 and the Telephone Consumer Protection Act of 1991 that regulate collections to ensure fair and ethical treatment of debtors. State law may not permit contacting debtors at their place of employment, so this aspect needs to be checked. If the practice chooses to add late fees or finance charges to patients’ accounts, it must do so in accordance with state and federal laws. Often, it is required to disclose any fees or finance charges at the time services are rendered. Learning Outcome 13.5 - Apply regulations and guidelines to the collection process. TEACHING NOTES In addition to state and federal laws, the practice’s policies for dealing with patients need to be followed.

13.5 Collecting Outstanding Patient Accounts Cont. 13-46 Collection Guidelines Contact patients once daily only, and leave no more than three messages per week. Do not call a patient before 8 A.M. or after 9 P.M. Do not threaten the patient or use profane language. Identify the caller, the practice, and the purpose of the call; do not mislead the patient. Do not discuss the patient’s debt with another person, such as a neighbor. Do not leave a message on an answering machine that indicates that the call is about a debt or send an e-mail message stating that the topic is debt. Learning Outcome 13.5 - Apply regulations and guidelines to the collection process. TEACHING NOTES Do not tell a patient you are going to take certain actions (such as enlisting a collection agency) unless you are prepared to do so.

13.5 Collecting Outstanding Patient Accounts Cont. 13-47 Collection Guidelines Cont. If a patient requests that all phone calls cease and desist, do not call the patient again, but instead contact the patient via mail. If a patient wants calls to be made to an attorney, do not contact the patient directly again unless the attorney says to or cannot be reached. Learning Outcome 13.5 - Apply regulations and guidelines to the collection process. TEACHING NOTES Send the letter via certified mail with return receipt requested, and place the receipt in the patient’s file. This provides verification that the letter was delivered to the patient.

13.5 Collecting Outstanding Patient Accounts Cont. 13-48 Credit Arrangements and Payment Plans A practice may decide to extend credit to patients through a payment plan. The Federal Trade Commission (FTC) enforces the Equal Credit Opportunity Act (ECOA), which prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because a person receives public assistance. If the practice decides not to extend credit to a particular patient, while extending it to others, under the ECOA the patient has a right to know why. Factors like income, expenses, debts, and credit history are among the considerations lenders use to determine creditworthiness and must be clearly stated. Learning Outcome 13.5 - Apply regulations and guidelines to the collection process. TEACHING NOTES The practice must be specific in answering such questions.

13.5 Collecting Outstanding Patient Accounts Cont. 13-49 Credit Arrangements and Payment Plans Cont. Both the patient and the practice must agree to all the terms before the arrangement is finalized. Patients agree to make set monthly payments; if no finance charges are applied to the account, the arrangement is not regulated by law. However, if the practice applies finance charges or late fees, or if payments are scheduled for more than four installments, the payment plan is governed by the Truth in Lending Act, which is part of the Consumer Credit Protection Act. Patients must sign off on the terms on a truth-in-lending form that the practice negotiates with the patient. Learning Outcome 13.5 - Apply regulations and guidelines to the collection process. TEACHING NOTES Practices have guidelines for appropriate time frames and minimum payment amounts for payment plans. The practice works out payment plans using patient information such as the amount of the bill and the amount of the patient’s disposable income.