Orthopedic Coding Alert

Collection agencies can be a great way to bring in the money -- if you can't collect it in-house

A small-practice orthopedic biller can sometimes feel like a tightrope artist--walking the fine line between running a good business and upholding a good reputation within the community.

Small-practice collections can be both a blessing and a curse. The blessing is that you see patients regularly and have the opportunity to develop a good relationship with them. Yet tricky situations arise when you have to resort to an outside collector in a community where word travels fast.

Use these seven time-tested tips to improve your collections success:

1. Prevent overdue balances on the front end. Have a clear-cut financial policy that tells patients what you expect from them with regard to payment. For example: -Payment of copays is expected at time of service- and -balances after insurance must be paid within 90 days.- You should also include what fees you will charge for returned checks, form completions, no-shows, etc.

Copays are key: Collect all copays up-front. -I-ve seen practices cut their collections by 10 percent if they just collect copays up-front,- says Heather Corcoran, coding manager at CGH Billing in Louisville, Ky. Your best opportunity to collect on any balance is when the patient is in front of you, which include copays as well as balances from
prior services.

Arrange payment plans early: The biller responsible for collections and A/R should discuss any outstanding account balances with a patient at checkout. -Patients are usually more likely to arrange for payment when they-re standing in front of you,- Corcoran says. -Once they leave the practice, it's much harder to collect.-

2. Discuss your collections policy with your physicians. The biller handling collections and A/R should sit down with the surgeons to discuss how they want to handle patient accounts. Ask how aggressive you should be in collecting balances -- this conversation will ensure that you aren't using collection methods that the physicians disagree with.

3. Try pleasant phone-call reminders first. Sometimes all a patient needs is a gentle reminder that his account is overdue. But make sure you actually talk to the patient and don't just leave a message asking him to call you back.

Be flexible: Your billing and collections contact may have to adjust his work schedule so he can stay until 6 or 7 p.m. one or two days a week. This extra time will allow your practice to catch patients who aren't accessible at work during the day.

4. Stick to a standard collection process. Practices use various methods for collections, but most send three letters and then call the patient on the phone before they consider using an outside collector. If the patient still hasn't paid by the time the outside collector is about to initiate legal action, some practices choose to release the patient from the practice and discontinue treating him.

Remember: That decision should be made by the physicians, not the billing staff, says Stephanie Ellis, RN, CPC, owner of Ellis Medical Consulting in Brentwood, Tenn. -The physician knows much more about the patient's individual circumstances and problems than a business office employee does. I really do not make suggestions to practices about this issue. Patients are dismissed for a number of varying reasons -- not always just payment issues.-

5. Set up a mutually agreeable payment plan to accommodate patients who want to pay but can't afford the entire balance at one time. Have patients sign this agreement in the office, or mail or fax a copy for them to sign and return.

6. Accommodate the patient's needs to get the bill paid. -Management of the self-pay patient requires some skill,- says Rob Geer, senior consultant at Accelerated Receivables Management in Park Ridge, Ill. -Separating which patients cannot pay from those who will not pay requires a financial interview with the patient.-

You should develop a form that allows the patient to show his income and debt status. -If the patient's income falls below 200 percent of federal poverty guidelines (generally accepted standard for charity), the patient balance should be written off to charity care,- Geer says. -If the patient does not quality for charity care, the patient should be placed with a collection agency.-

You should develop a charity care policy for your practice, along with a financial disclosure form, Geer says. -Each practice should expect and budget for a certain amount of charity care.-

Other strategies: You can consider sending self-addressed, stamped envelopes if that has historically worked well for your practice. Or, if your insurance contracts allow it, you can even try offering the patient a discount, since your practice would lose part of the balance to collection fees.

Tip: You may think that these individualized efforts are above and beyond the call of duty, but it's worth it if it helps you get paid.

7. Use an outside collector. You may feel uncomfortable about using an outside collector for patients your practice knows well, but the simple act of involving another party is often enough to get patients to pay.

Some consultants recommend that every practice contract with a collection agency so they can quickly turn over the accounts that are behind. -Generally, any patient balance greater than 120 days should be referred to an agency,- Geer says. -Larger practices should think of contracting with multiple vendors to manage all self-pay accounts from day one.-

Practices that want the best return will use a two-tier approach, Geer says. -Self-pay balances are sent to an early out vendor the day the account is billed as self-payand this vendor will work the accounts with a softer collection practice for 120 days. Any accounts with balances that are unpaid at 120 days are then returned by the early out vendor and placed with a more hard-core collection agency,- he says.

Take Action Before 180+ Days Pass

Don't wait too long: Whether you use a vendor for new balances or you wait until collections are well overdue, you shouldn't wait too long, or it will be hard to collect. -When accounts are 180+ days out, that is so old, it is hard to locate people and make them think you are serious about the collection process.-

In addition, Ellis says, the -fresher- the accounts are when you turn them over to collections, the better chance the collections representative has of collecting your money.

Want Special Services? 
 
If a bigger collection agency doesn't offer some of the small-practice services you want, such as collecting on older and smaller balances, try using an individual outside collector. He may be more willing to work smaller balances and flexible hours, and cater to any other specific needs.

Tip: Your practice should consider bonus incentives for an individual outside collector based on dollar amounts and the age of the account. This principle could also work for a collector within your practice.