Chapter 19: Billing and Collections

What are the components of a complete statement? What are the guidelines in regards to the production of statements for patients?

1) A well-prepared patient statement should contain not only information for the patient but information needed to process medical insurance claims as well. The following information should be included: 1a) Patient's name and address 1b) Patient's insurance carrier and identification number 1c) Date and place of service 1d) Description of service and fee for each service 1e) Accurate procedure and diagnosis codes for insurance processing 1f) Provider's signature and identification code or National Provider Identifier (NPI) 1g) Clinic name, address, telephone number, fax number, and website when applicable 2a) Once a patient has been accepted for treatment, it is important to maintain accurate and timely records of his or her account and payment history. That information is just as vital to the healthy management of the practice as the patient's medical record. Invoice patient services promptly according to the clinic policy, send statements regularly, and make certain they are complete and accurate. Statements to patients must be professional looking, neat, inclusive of all services and charges, and easily understood. Procedure and diagnosis codes are necessary for insurance and reimbursement but they usually mean nothing to patients. Make certain patients can understand the terminology used to explain the procedures they received. 2b) Billing occurs in a number of different ways, with the computer-generated statement the most widely used. An encounter form may be used as a statement, especially if payment is made at the time of service. Typewritten statements will likely use the continuous-form billing statement that is printed on a roll with perforated edges for separation. Photocopied statements are often used with a pegboard system. The ledger cards are coordinated with the same-size copy paper. These photocopied ledgers are placed in a window envelope so that the address on the ledger card shows through the window 2c) If the statement is to be mailed, an enclosed self-addressed envelope is appreciated by the patient and may result in a faster turnaround of payment. Stamp the words "address service requested" on the envelope just below the return address. When this statement is stamped on the envelope, a valuable tool in collections is available at minimum cost. If the statement cannot be delivered as addressed (the patient has moved or "skipped" and has left no forwarding address), the post office researches this information and returns the envelope to you with a yellow sticker providing the new address and any other updated information. If the patient has ordered that mail be forwarded, the post office will forward the statement to the patient and send the medical facility a form with the new address. There is a fee for this service. 3a) By far the most common statements are computer generated. Typically, the medical assistant keys the computer command to search the patient database for outstanding balances and directs the computer to print statements. 3b) Financial management software will age accounts and can generate collection letters that have been specifically designed for the practice, allowing the medical assistant to key in the appropriate specific information 3c) All provider orders, prescriptions, recommendations, and a copy of the visit and health summary can be waiting for the patient at the time of checkout, if desired. With a single key entry, an electronic invoice is generated with appropriate diagnostic and procedural codes already applied. If insurance is to be billed, the claim is automatically placed in the insurance queue to be uploaded electronically to third-party payers. 3d) Any payments made can be posted electronically and statements can then be printed for the patient. The collection portion of the financial management software keeps up with the daily billing tasks

What are aging accounts? What are the guidelines for the manual and electronic collection of aged accounts?

1) Account aging is a method of identifying how long an account has been overdue. This means that past due accounts are identified according to the length of time they have been unpaid. When using a pegboard bookkeeping system, color-coded strips are attached to the ledger cards to show the age of an account, or the cards can be stored behind a color-coded divider in a separate file labeled "Unpaid". For example, a red strip might be used for accounts 1 month overdue, and other colors for additional months overdue. A written code such as "OD3/23/23" should be written on the ledger card to indicate when the overdue notice was mailed, meaning "Overdue notice No. 3 mailed on February 23". 2) Depending on the type of patient served, different aging systems are used. In a computerized billing system, the accounts are automatically aged, and the aging schedule or process is shown on the computerized ledger 3) Aging accounts using a computer software system is simple. Before printing billing statements, the medical assistant keys the appropriate commands to age the accounts. The program can age accounts according to several criteria: for example, by past due balance, zero balance, or credit balance accounts. Accounts can also be aged by government agency category or by insurance carrier. All medicare or medicaid accounts might be aged separately from other accounts. Sorting out medicare and medicaid accounts may also be done when computing the accounts receivable ratio and the collection ratio. 4) The computer can also generate and print an accounts receivable report showing each overdue account, the balance overdue, and a breakdown showing how long the account has been overdue. This breakdown is usually divided into accounts 0 to 30 days overdue, 31 to 60 days overdue, 61 to 90 days overdue, and 90 days or more overdue. Additional reports can be generated from the accounts receivable report. For example, the clinic staff may wish to print a report showing accounts that have been delinquent by more than a certain dollar amount.

Why is it important for healthcare staff to follow the credit and collection policies of the medical clinic? What are the credit and collection guidelines for medical clinics?

1) It is important that patients understand the billing policy and are educated about their accounts, how they are paid, and what their responsibility is toward payment. 2) The credit and collection guidelines for medical clinics are: 2a) Medical clinic staff must provide patients with information brochures so that they can have a better understanding of their accounts, how they are paid, and what their responsibility is toward payment. 2b) Medical staff also must have a well-defined policy related to patient billing and collecting. 2c) Even uncomplicated patient billing should be done according to credit and collection policies established by the provider-employers of the clinic. Having a formalized policy makes decision making easier and gives the medical assistant or office manager responsible for billing and collections authority to act. For example, some questions the providers and office manager may want to address include: -When will payment be due from the patient? -What kind of payment arrangements can be made if the patient does not pay at time of service? -Will the patient be responsible for obtaining referrals, and if so, how will patients who did not obtain one prior to the visit be handled? -At what point should a patient be reminded of an overdue bill? -How is the reminder initially managed: by telephone, a note on the statement, or a letter? -At what point will a patient bill be considered delinquent? -Will a collection agency be used? Who decides? -If exceptions to the policy are to be made, who makes these exceptions and what steps are taken? By answering these and other questions, a straightforward credit and collection policy can be devised that is a guide to both patients and the medical assistant in charge of billing.

What is the procedure for posting/recording collection agency adjustments?

1) Gather all of your necessary equipment and supplies. Make sure that they are in good working order before beginning the procedure. For this particular procedure, you will need to have a manual bookkeeping system or computerized system, the patient's account, black and red ink pens for use in manual bookkeeping system, and a computerized practice management system. 2) If using a manual system, use the daily schedule of services/charges in front of you (the manual daily sheet), enter amount received from the collection agency on a patient's account and a note such as "payment from ABC collection agency" in the explanation section. If using a practice management system, use the payment posting module and locate the patient record. This indicates funds received on a collection contract 3) Record the amount received and the explanation in the patient's account as well 3a) Using a manual system, post the amount received by subtracting from the account balance. Use the adjustment column to write off the balance amount. This should zero out the account. 3b) In a practice management system, post the amount received to the patient account from the collection agency, and adjust the balance to zero out the account. This clearly indicates what portion of the account the patient has paid and the amount that is not collectible. In a manual system, the difference between the amount collected and amount paid by the collection agency (including the agency's fee) is entered as a negative adjustment. In a practice management system, this is tracked within the software. At the end of the year, totals can be obtained for the practice's income tax preparation

What is the procedure for explaining fees in the first telephone interview?

1) Gather all of your necessary equipment and supplies. Make sure that they are in good working order before beginning the procedure. For this particular procedure, you will need to have the provider's fee schedule, the appointment schedule, and a telephone. 2) Place the provider's fee schedule and the appointment schedule close to the telephone. Prepared medical staff do not have to search for something vital to the phone conversation. 3) Answer the phone before the third ring. Identify the name of the clinic and yourself. The person calling feels attended to and knows the call has been correctly placed 4) Acknowledge the patient and offer assistance; for example, a comment such as "How can I help you?". This sets the tone for the patient to continue with the request. 5) After the patient is identified as a new patient and the nature of the visit is determined appropriate, discuss possible dates for the appointment. A statement such as, "Our next available appointment is Thursday at 11:30am. Can you make it then?" is a good way to begin. 6) Tell the patient that you will be discussing clinic policies briefly now and will mail the patient information brochure before the appointment. The patient brochure details some of the information discussed in the telephone conversation and further verifies the clinic's policies 7) Ask about medical insurance. If the patient is insured, get the identification number, the name of the subscriber, the employer, and a telephone number of the insurance carrier if possible. This allows you to check for any preauthorization required and for the currency of the plan 8) Explain that clinic policy requires any copayment and coinsurance to be paid at the time of the visit. This establishes the patient's financial responsibility immediately. 9) Check to see if the patient has transportation and knows how to get to the clinic, and provide directions if necessary. This ensures that there is no confusion about location and accessibility. 10) Request that the patient arrive about 15 minutes before the appointment to complete some forms. This ensures that the patient has time to complete information and can ask and questions that might occur. 11) After closing the telephone interview, promptly mail the patient information brochure

What is the procedure for preparing itemized patient accounts for billing?

1) Gather all of your necessary equipment and supplies. Make sure that they are in working order before beginning the procedure. For this particular procedure, you will need to have a computer, calculator, electronic patient account or ledger cards, and billing statement forms. 2) Gather all accounts and ledgers with outstanding balances. Everything in one place saves time and energy. 3) Separate any accounts that are labeled as overdue. Individual decisions on these accounts are necessary before taking action 4) Paying attention to detail, and for each account, perform the following tasks: 4a) Verify the name and address of the patient and the person responsible for payment 4b) Place current date on the statement 4c) Scan the account information for any possible errors 4d) Itemize the procedures in terms patients understand and indicate changes 4e) Identify and subtract any payments (copayments, coinsurance, down payment) that have been made. 4f) Verify the unpaid balance that is carried forward and is due 5) Discuss with the clinic manager any action to be taken on past due accounts. Follow through with those instructions. More than one person is involved in the collection process 6) Place statements in envelopes and mail. This ensures timely delivery of statements

What should medical clinics do before spending time and effort in collections? Why is it important for medical clinics to be aware of the statute of limitations for their state in regards to collection?

1) If an unpaid account is more than 3 years old, it is wise for the medical assistant or clinic manager to investigate the statute of limitations in their state before spending time and effort in collections. 2) When applying the statute of limitations to collections, the time period is usually defined by the class into which the account falls. These include open book accounts, which may have periodic changes against them; written contracts; and single-entry accounts, which have only one charge against them. The time period which legal action takes place varies from state from state

When is it appropriate for medical clinics to use small claims courts?

1) In certain circumstances, a clinic's manager may consider bringing a case to small claims court. Typically, small claims courts handle cases that involve only limited amounts of debt (these vary from state to state), they usually do not permit representation by an attorney, and they are generally efficient and streamlined in their proceedings. Nonetheless, preparing for small claims courts and taking time to appear will require a certain investment of staff. It is important to not that if the court rules in the clinic's favor, the clinic still must collect the money from the defendant. An account assigned to a collection agency cannot be addressed in small claims court

What are the guidelines of the Truth-In-Lending Act that medical clinic staff must follow?

1) In those situations where a payment schedule is arranged, clinic policy will dictate if any interest is charged. Although it is not illegal to charge interest on patient accounts, many providers still prefer not to assign any interest on installment payments or past due accounts 2) For installment payments (such as prenatal care or surgery), medical assistants need to be aware of the conditions of the Truth-in-Lending Act, Regulation Z of the Consumer Protection Act of 1968. If there is bilateral agreement between providers and their patients for payment of medical services in more than four installments, that agreement must be in writing and must provide information on any finance charges. The information must be in writing even if there are no finance charges made. The patient is given the original copy of the disclosure statement; a second copy is kept in the clinic

What are the guidelines for maintaining a professional attitude when performing collection tasks in the medical clinic?

1) Keep in mind that although it can be discouraging to place collection calls, medical assistants are still responsible for performing this task 2) Medical assistants must keep in mind that patients will not always respond well to collection calls. Medical assistants must also keep in mind that not all patient accounts can be collected 3) It is important that medical assistants identify the aged patient accounts early, write them off, and save the medical practice time and money 4) Keep any bias and your emotions out of the process 5) Rely on your information, the aged account, and the realization that the clinic policy is well thought out and providers a win-win solution for both the patient and provider as much as possible 6) When dealing with a "true deadbeat" who has no intention of paying the bill, be proud of your provider's attention to that patient's need, but discuss with the provider the possibility of discharging the patient. 7) Medical clinic staff will need additional training and education from time to time to update their skills on patient service and how to maintain goodwill during the collection process

When is it appropriate for medical clinics to use an outside collection agency? What are the guidelines in regard to the use of an outside collection agency?

1) Occasionally, the clinic turns over highly delinquent accounts to an outside collection agency. Discretion is always advised here, however, because the fees to be collected may not justify the expense of collection. For unpaid accounts with large balances, however, this is often a viable solution. 2) One service provided by a collection agency is an intercept letter. For a nominal fee, this letter may be sent from the agency as the last resort before the account is turned over to collection. This communication alerts patients to the fact that if a response is not received, their account will go to collection. This often is the only action needed for the patient to pay the outstanding bill. Another service of a credit bureau or collection agency is to provide credit ratings of patients at the provider's request. Providers who pay for this service are able to monitor patients' ability to pay their bills, as well as to trace a "skip", someone who leaves with an outstanding bill and no forwarding address. 3) When selecting a collection agency, be certain to hire one that is compatible with the medical practice's philosophy. Questions that might be asked of potential collection agencies include the following: 3a) Does the agency handle only medical and dental accounts? 3b) What methods are used to make collections? 3c) Is the agency fee a flat charge per account or a percentage of the account recovered? 3d) How promptly does the agency settle accounts? 3e) Will the agency supply a list of satisfied customers or references? 3f) What ability does the medical practice have to end the agency's collection efforts? 4) Once a collection agency has been selected, carefully follow their instructions about any contact patients make with the medical clinic regarding their account as well as any other guidelines in their contract with the practice. Keep a record of accounts given to the agency, as well as their rate of return. Hopefully, the agency will be able to motivate patients to pay for the health care services they have received while still maintaining the practice's good reputation and increasing your profit margin. Medical collections let your patients know that the practice is serious about collecting past due accounts 5) There is often a question about how payments from collection agencies are posted. This is one purpose of the adjustment column. Place the amount received in the adjustment column because it is a subtraction from the amount due. If there is no adjustment column, put the amount in the charge column and put red parentheses around it or circle in red so that the amount is actually subtracted from the balance. The remaining balance after collections are paid is written off.

What are the guidelines in regard to payment at the time of service?

1) The best opportunity for collection is at the time of service. This process begins with the medical assistant who schedules appointments. Make certain all patients have the information they need. After determining the urgency and reason for the appointment, collecting information regarding a chief complaint, and assigning a time for the appointment, it is appropriate to discuss the financial concerns of patients. Patients may be shy in asking certain questions, but they have questions about most of the following issues: 1a) Whether the providers contract with their insurance carrier 1b) How payment is made if insurance does not cover certain procedures 1c) Whether they can be billed for copayments and coinsurance 1d) How payment is made for services if they have no insurance 1e) An approximate cost of a particular service Do not tell a patient, "We do not take your insurance". It is much better to make a statement such as, "Our providers do not contract with that insurance. However, we can work with you on a fee-for-service basis and help make finances workable for you." The atmosphere has now been created to ensure prompt collection and increased cash flow for the practice. To accommodate patients, clinics now increasingly accept debit and credit card payments. Remember, also, that if your facility does use a sign-in method as patients arrive, then the all important personal contact may be missed. With that missed opportunity also goes the opportunity to discuss finances 2) Most insurance contracts require the provider to bill the insurance company before billing the patient, except for the copayment. It is critical to abide by each contract to protect the provider. If the patient is a member of a health maintenance organization (HMO) and the clinic is a participating provider, it is bound to the terms of that agreement. If not restricted by the insurance contract, be certain to explain to the patient at the time of service that any payment owed will be adjusted according to the patient's insurance and the terms of that policy. Also remember that all patients must be treated the same and charged the same for services 3) With the knowledge of what portion of the fee can be collected at the time of service, the medical assistant says to the patient prior to leaving the facility, "The fee for your services today is $85. Will you be paying by cash, check, or credit/debit card?" When the policy for collecting fees is shared when the appointment is made, patients are not surprised by this approach. Allow the patient to be the next person to speak with in response to the question asked. If for some reason a fee cannot be immediately paid, the patient will respond by asking what kind of arrangements might be made. Even if financial arrangements are necessary, the discussion of the day's fee for service is in the process

Why is it important for healthcare staff to follow the billing procedures of the medical clinic? What are the billing guidelines of the medical clinic that healthcare staff must follow?

1) The clinic's cash flow and collection process are dependent on up-to-date and accurate billing techniques. The financial status of the practice is reflected in monthly financial statements indicating unpaid patient balances, which, if they persist, are reviewed for appropriate action, including possible referral to a collection agency. Timeliness and accuracy have a significant influence on the prompt payment and how soon collection of the patient account will be finalized. In other words, billing performance can be measured by the time it takes to generate and submit a complete statement, that is, a statement with full documentation 2) The following are procedures of billing in the medical clinic that healthcare staff must follow: 2a) Copies of all billing forms will be retained in the patient account record 2b) If a facility is experiencing problems generating patient bills, a billing timeliness analysis worksheet can be constructed to identify internal delays that affect how quickly an account is billed, and thus paid. By focusing on inefficiencies in the revenue cycle, processes may be identified that need to be streamlined. For example, the date of service and insurance verification, the date the bill was generated, and the date the bill was submitted to the patient or third party can determine the efficiency of the billing process. 2c) A billing efficiency report is another instrument that may be used to monitor the efficiency of the billing process. This report lists the previous month's billing backlog, which is added to the number of new accounts. The number of processed accounts is then subtracted. The weekly number of accounts that were rebilled also is noted, and the amount of time billing personnel spent on billing accounts is recorded. Production efficiency is calculated from these data. Inherent to this system is the careful monitoring of follow-up bills, including whether they were paid, whether the insurance paid, and an assessment of the patient's responsibility for payment

What are the collection guidelines of a medical clinic? What can medical assistants do to ensure that the collection of accounts receivable is prompt and conducted in a timely fashion?

1) The process of collecting delinquent accounts begins with first establishing how much has been owed and for how long. Ideally, collection of accounts receivable should be prompt and conducted in a timely fashion. Management consultants recommend collecting at least a portion of the fees at the time of service and that a collection ratio of 90% or better should be maintained. Another important factor is the accounts receivable ratio, which measures the speed with which outstanding accounts are paid. The desirable accounts receivable ratio is less than 2 months for collection of accounts receivable 2) Collection ratio- A collection ratio is a method used to gauge the effectiveness of the clinic's billing practices. This ratio shows the status of collections and the possible losses in the medical facility. It is a good idea to obtain the ratio monthly, quarterly, and yearly. Typically, the collection ratio is calculated by dividing the total collections by the net charges (gross or total charges minus any adjustments). This yields a percentage that is referred to as the collection ratio. For example: Total amount collected this month ($34,650) divided by the total monthly charges minus adjustments ($44,928) equals the monthly collection ratio (.7712 or 77%) In this example, you can determine that more time and energy needs to be spent in collecting accounts. The practice is losing almost 25% of its income potential. Not only is the income potential being lost but also the ability to invest that income is lost, making the potential loss even greater 3) Accounts receivable ratio- An accounts receivable ratio indicates how quickly outstanding accounts are paid. It can also be a measure of how effective the collections are. To calculate the accounts receivable ratio, divide the current accounts receivable balance by the average monthly gross charges. This yields the typical turnaround for collecting accounts receivable. For example: Current accounts receivable ($145,048) divided by the average monthly gross charges ($44,928) equals the account receivable ratio (3.2) Because the goal of the accounts receivable ratio is payment in less than 2 months, you can quickly observe that this practice is over 1 month behind in collections. 4) The longer a practice delays attempting to collect delinquent accounts, the less chance there is of receiving payment. Statistics show that the value of the dollar decreases rapidly in the collection process. That is, the more time and energy put into collections, the less value received in return. You may manage to collect the full amount due but when you consider the time and expense involved, it may not have been worth the effort and expense. Therefore, the value of the debt to be received after successful collection must be considered when determining how aggressive to be in debt collections

What are the three special situations that may arise in patient billing and collection? What are the guidelines for each special patient billing and collection situation?

1) The three special situations that may arise in patient billing and collection are bankruptcy, estates, and tracing skips. 2a) Bankruptcy- If a patient has declared bankruptcy, statements may no longer be sent nor may any attempts be made to collect delinquent accounts. A patient declaring bankruptcy usually does so under Chapter 7 or Chapter 13 bankruptcy law. In a Chapter 7 bankruptcy, a patient declares bankruptcy to all debtors and is allowed to clear all debts and start fresh. The medical clinic should file a proof-of-claim form and provide a copy of the patient's outstanding account to the bankruptcy court. In a Chapter 13 bankruptcy, also known as a "wage earner's bankruptcy", patients (wage earners) are protected from bill collectors and are allowed to pay their bills over a specified time. The court determines a monthly amount that the debtor can pay, collects that sum, and parcels it out to the creditors over a period as long as five years. The clinic must file a claim as directed by the debtor's attorney to collect any fees outstanding. Because a provider's fee is an unsecured debt, it is one of the last to be paid. Bankruptcy laws are federal and are subject to the Federal Wage Garnishment Law regarding attaching property to satisfy debt. 2b) Estates- Collection of fees when a patient has died must be directed to the executor of the estate or the one responsible for overseeing the estate. Some general guidelines to follow include: -Show courtesy by not sending a statement in the first week or so after death -Prepare an itemized statement of the deceased patient's account. (In some cases, a special form is required for this). -Mail the account information via certified mail with a return receipt requested to the administrator of the estate. The name can be obtained by calling the probate department of the superior court. -If there is no known or identified administrator, send a copy of the itemized statement to the "Estate of (patient's name)" at the patient's last known address. Often, a family member has assumed the responsibilities for paying the patient's account balances. -If unsure of how to proceed, contact the clinic's attorney or the clerk of the probate court for advice 3) Tracing skips- A skip is a patient with an unpaid bill who has apparently moved with no forwarding address. If a statement is returned to your clinic marked "no forwarding address", first determine if any internal errors were made in addressing the envelope. If the address is determined to be correct, the medical assistant is may try to call the patient at the telephone number on the patient ledger; it is possible that the patient has retained the same number, or there may be a new number given. If the medical assistant is unable to secure a telephone number, the facility needs to decide whether to pursue the unpaid debt. This will depend on clinic policy and the amount that is owed. If it is decided to pursue an unpaid account, it can be turned over to a collection agency. If the medical assistant attempts to trace the skip by calling employers or relatives, it is important not to violate any laws in doing so and to maintain the patient's confidentiality.

What are the two types of billing schedules that are commonly used in the medical clinic? What are the guidelines regarding monthly billing? What are the guidelines regarding cycle billing?

1) The two types of billing schedules that are commonly used in the medical clinic are monthly billing and cycle billing 2a) In a monthly billing system, one or two days of each month are devoted to billing and mailing all statements. Typically, statements should leave the clinic no later than the 25th of the month to be received by the first of the following month. The major disadvantage of monthly billing is that a medical assistant may neglect other activities during this time-consuming period. To avoid these problems, billing statements may be prepared intermittently over a one-week or two-week period and stored until the mailing date. To avoid confusion caused by delays in mailing, a message to "Disregard if payment has already been made" should be printed on the form. Patients become annoyed and the practice appears disorganized if a statement arrives several days after payment has been made. 2b) In a cycle billing system, all accounts usually are divided alphabetically into groups, with each group billed at a different time. In this way, administrative personnel with numerous bills to process each month will be able to handle them in a more efficient manner. Statements are prepared on the same schedule each month. They can be mailed as they are completed, or held and mailed at one time. The cycle billing system can be varied to suit the needs of the individual practice

What are the common reasons for past-due accounts?

As efficient and effective as the billing process may be, there will still be collections on some accounts. The most common reasons for past-due accounts include: a) Inability to pay: People may have financial hardships from time to time b) Negligence: People may forget to make a payment because they have been away or dealing with a family emergency c) Unwillingness to pay: When a patient complains about a charge or refuses to pay, it may have nothing to do with finances. Often, they are dissatisfied with the care or treatment they have received. These patients should be referred to the provider or office manager for immediate attention d) Third-party payers: Past-due accounts may result because of inaccurate or insufficient insurance information. Claims can be rejected because of many varied reasons, and time limits must be observed e) Minors: Minors who are not legally emancipated may seek and receive treatment, but they are not responsible for paying the bill. If the medical practice treats minors who are emancipated, a clinic policy should determine how these minors pay for their services. Emancipated minors are responsible for their bills. Many facilities ask for cash at the time of the service.

What are the two types of communication techniques that medical clinics use for the collection process? What are the guidelines of communication in regards to collection?

The two types of communication techniques that medical clinics use for the collection process are through telephone and letter. Although both have some measure of effectiveness, some practices prefer to call the patient with a past due account before officially initiating collection proceedings. The patient may have misplaced the statement, forgotten a payment, or been away on an extended vacation; a quick telephone call can often resolve the situation without the time and expense involved in collections. Also, the patient usually appreciates the courtesy and personal approach. Many patients work part or full time, which sometimes makes telephone calls difficult to complete. It is often beneficial for providers to ask the office manager or the medical assistant in charge of collections to work 2 or more hours one evening a week for the purpose of making collection calls via telephone. Calls are more likely to be answered in the time period from 5pm to 8pm than during the middle of the day. 1) Billing insurance carriers- Many patients have some form of medical insurance. Make it a practice to send each computer claim within 2 days or less of the patient account data being entered into the computer. Batches of claims to insurance carriers should be forwarded at the end of each day. In the era of electronic claims processing, much time is saved in not having to prepare hard copies of the forms for mailing. Electronic claims transmission (ECT) dictates that the practice's computer system must be able to communicate with the insurance carrier's computer. This paperless process yields fewer errors than the manual process because ECT software includes some built-in checks to determine any invalid codes, sex or age conflicts, and correct procedure and diagnostic code linkages to the services provided. Insurance claims sent via the paper route will take more time to process, and the turnaround time for payment is also longer. Payment can be delayed because of an overburdened claim department, a form that has been lost in transit, a misfiled form, an inexperienced employee, or numerous other reasons. 1a) The medical assistant should maintain an up-to-date claims register or insurance pending report and take firm control of the practice's collection procedures to ensure that claims are paid promptly 1b) This claims register or insurance pending report may be part of the computerized billing system. If so, the printout will show how much the practice charged insurance carriers and how much was received. This clearly shows which carriers are slower than others and where other problems might arise. For any claim pending more than 45 days, it is a good idea to make a call to the carrier to find out whether the claim has been received, where it is in the process, and whether the clinic staff might have done something to delay the process. Such phone calls can become carefully cultivated personal contacts with insurance representatives to pave the way for cooperation in the future. 1c) In clinics where the medical assistant files claims for patients, a follow up collection policy is important to maintain strong cash flow. When carriers do not pay in full or question or deny a claim, the medical assistant should determine the nature of the problem and rebill or appeal the decision, whichever action is appropriate 2) Telephone collections- The medical assistant is likely to use the telephone for collection procedures. Telephoning is often an effective measure because a patient may respond to a call more than to a bill received in the mail. A successful telephone collection call is enhanced by keeping to the facts and being tactful, pleasant, and diplomatic. When making calls to patients regarding past due accounts, there are some things to keep in mind to maintain the desired relationship with patients. Always remain courteous and respectful. Do not treat patients with suspicion or threats. Remember, the health profession is dedicated to helping people; avoid antagonizing patient. Most people do not let their bills become past due on purpose or out of spite. Keep this in mind when making calls. Work with patients to encourage and enable them to pay any fees they owe. 2a) Certain legal rules and ethical guidelines govern telephone collections: -When making collection calls, callers must identify themselves and ascertain that they are talking to the person who is responsible for the account. -A collection call could be embarrassing to the patient; therefore, it should not be made to the patient's place of employment -In most states, a debtor may be contacted only between 8am and 9pm -Do not make telephone calls at odd hours or make repeated calls to the debtor's friends, employers, or relative -If a contact must be made to the debtor's place of business, do not reveal to any third party the nature of the call. Patients have a right to confidentiality and privacy -Do not threaten to turn the person's account over to collection agencies When collecting by telephone, it is helpful to keep complete, accurate records of the process indicating who said what and how much was promised as payment. If after 2 weeks nothing has resolved as a result of the calls, then another course of action may be the solution, especially for large sums of money owed. Collection letters may be necessary 2b) Violating rules regarding harassment makes the caller vulnerable to charges under the Fair Debt Collection Practices Act (FDCPA). According to the guidelines set by the FDCPA, which is overseen by the Federal Trade Commission (FTC), debt collectors are not allowed to use their positions to collect debt using any manner of work performance that is found to be abusive, deceptive, or unethical. The collectors must abide by certain guidelines, such as not calling a debtor at work without written consent and keeping calls to debtors between the hours of 8am and 9pm. Under the FDCPA, debts that are created by medical expenses are a type of debt that can be sent to collection agencies and subsequently collected upon. The collectors are strictly prohibited from using profane language or any language that indicates a threat (such as wage or tax refund garnishment). It is very important that the administrative medical assistant abide by such guidelines as given within the FDCPA. 3) Collection letters- Collection letters are sent to encourage patients to pay overdue balances. After two statements are mailed to patients and the charge slip or encounter form has brought up no response, the clinic begins sending collection letters. Lack of payment from a patient may not be considered serious until after 60 days. When the patient fails to respond to the encounter form, to the statement, or to a 60-day statement with an "overdue" remark, a series of collection letters begins. Collection letters and notes are kept separate from a patient's chart