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BILLING & COLLECTIONS

This 2 step program makes it easy to collect more money at the time of service

Ask any office “how well do you collect at the time of service?” and the answer will be “outstanding!”

But almost no offices can define outstanding, says Reed Tinsley, CPA, a medical practice business advisor in Houston.

Here’s the definition: at the time of service, the office should be getting some type of payment from 90% of the patients who can pay anything, even $1. “It may not be possible to get it all,” he says. “But get something.”

The first half is a 20-day letter

Tinsley’s advice is to go directly for the money.

Don’t waste the time and effort of sending out second and third statements, he says. Every patient should get “one and only one” statement, and if the money isn’t in at 30 days, send out what he terms a 10-day letter signed by either the office manager or the staffer in charge of collections.

It’s brief. All it needs to say is:

Dear Patient: Our records indicate that your account is overdue. This letter is notice that if we do not hear from you within 10 days from the date of this letter, your account will be sent to our outside collection agency.

If you cannot pay the balance of your account now, we still want to work with you to set up a mutually agreeable payment arrangement; however, our cooperation is only available if you contact us with the next 10 days.

We are sorry to have to take this action, but expenses in the health care industry are such that we can no longer perform services without receiving adequate compensation.

Please ask for me when you call. Thank you for your prompt attention to this matter.

The patient already has an EOB plus the office’s statement and knows exactly how much is owed.

And he points out that all the letter asks for is “the courtesy of a call.” Anybody who doesn’t respond within 10 days “isn’t going to pay.” That person has already had more than 40 days to pay. If there’s no response now, send the account to collections.

And be strict about it, he says. If there’s no response in 10 days, send the account to collections.

Staff control the other half

That letter is only half the collections picture, however. The other half is what the staff do, and he outlines five points.

First, the collection work has to start when the appointment is made. The scheduler has to remind all patients – both new and established – that “We expect your copay and deductible at the time of your appointment. Will that be a problem?”

Put the same message on the website. Also put up a sign in the waiting area.

“The cost of billing and collecting is tremendous,” he says. And when the amounts are small such as copays, the expense of billing for it outweighs the money that comes in.

Second, for the patient who has received a 10-day letter and not responded, don’t schedule an appointment until that patient speaks with the manager.

Third, collect the co-pay before the patient ever sees the doctor. All states except Massachusetts allow offices to collect at the time of service, he says.

If the patient doesn’t have cash, ask for a credit card. And if there’s still no payment, it’s time to make the call of whether to see the patient or reschedule.

Fourth, when a patient comes in with a balance, don’t let that patient see the physician “without some kind of conversation about making a payment.”

Unless there is a front desk staffer who is good at that type of conversation, the best approach is to take it out of the hands of the staff and call in the manager. And all the manager needs to say is “We notice that you have a balance. Can you make some payment on that today?”

And fifth, when a patient has a high deductible, ask for the full payment. “It’s not the physician’s fault. It’s the employer’s fault,” and there’s no reason for the doctor to make up what the employer doesn’t provide.

Only a short payment plan

For patients who can’t pay the full amount, set up a payment plan. And payments have to be substantial, Tinsley says. “It’s absurd for somebody to pay $10 a month.” The office will lose money sending out the statements.

When someone truly can’t pay, that’s the time to offer a discount, perhaps “can you pay half today and half later with a 20% discount?”

And no plan should go on for more than six payments.

He adds that discounts should not be given without first trying to get the money. Give them only on the back end. “This is a business.” Make every attempt to get paid for it.

‘It’s not rocket science’

Bringing in the best possible revenues “is not rocket science.” It’s just common sense, and Tinsley points to six basic and simple tactics that all offices need to take but that tend to go ignored.

  • Set aside “adequate time each week to do the insurance collection calls.” Small offices rarely do that, he says, because they stay so busy. But to get the money in, the office has to start the calls at 28 days, not 60.

“Don’t be lazy and just refile the claim.” Chances are it’s going to come back the same way.

  • Hire enough staff to get the collection work done properly.

He cites one client office that had five physicians and only one collector, “and more than $900,000 was over 150 days old.” Not hiring another collection staffer was scarcely a money saver. Even a part-time staffer can make a tremendous dent in any office’s receivables.

  • Accountability is essential. Many times staff write off as contract adjustments amounts that could have been appealed and paid. There needs to be a system of getting approval before any charge can be written off.
  • Chart the number of E/M code levels. They should fall into a bell curve.

An office can have a curve that leans toward the higher-level codes if it has adequate documentation to support those claims, he says. But no office should have a curve leaning toward the lower-level codes. When that happens, count on it that the physician is undercoding – and many physicians do that on purpose to avoid trouble.

  • Check each EOB against what the payer is supposed to be paying. A common misconception is that all payers deny the same things Medicare denies. But that’s not always the case, and unless the office spots those claims, money falls through the cracks.
  • Finally, recognize the importance of accurate coding. Most of today’s revenue is fixed reimbursement, and to make the best of that situation, the office has to maximize its coding.

Tinsley recommends that any staffer who deals with coding – and all the doctors – take coding classes. The money is in the hands of the codes, and the codes are in the hands of the doctors.

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