ED Coding and Reimbursement Alert

Question: We’ve had some issues with our collections firm in terms of accuracy and transparency. How do we know if it’s time to let them go?

Texas Subscriber

Answer: Once you’ve decided to turn an account over to an outside collection agency, you know you have a big problem on your hands. The recovery rate can be below 10 percent if the account is aged 180 days or more. The agencies don’t earn anything unless they collect, so in general, you really don’t have to worry about them falling down on the job.

How the collection process works:  The debtor will first get a series of strongly worded letters from the collection agency or the law firm representing them. The letters will advise patients that your practice is a member of the National Credit Bureau Network and that a blemish will be recorded on their permanent credit files if they don’t immediately resolve their past-due balance. This stern warning often does the trick.

Time to change agencies:  If, however, you are finding that you are getting less-than-adequate responses from your collection agency, you may want to switch agencies. How do you know when it’s time to do this? The primary way of determining whether the agency is doing its job is if you are getting regular reports on the status of accounts and positive results by receiving monthly checks.

But be aware that if you do want to change agencies, you should check your contract with them. You will probably have agreed to give them a certain amount of time to collect the account.