Practice Management Alert

You CAN send a patient to collections who is awaiting an injury settlement

Patients involved in injury lawsuits often believe they can legally wait to pay you until they've received settlement money, so telling them otherwise is up to you.

Check out this billing problem and see if it sounds familiar.

Problem: Our practice has been trying for years to get several patients to pay us who are in litigation and negotiations over accident and injury cases. The patients don't respond to our collection efforts because they have an attorney, and the attorneys aren't good about responding either. What actions can we take to expedite payment?

Solution: The patient must pay his medical bills regardless of his court status and how close he is to receiving his settlement. Although holding patients to their financial obligations under such circumstances can be difficult, practices must "stand firm," says Michael Fleischman, CHC, consultant with Gates Moore & Co. in Atlanta.

Attorney talk: If the patient is difficult and insists that you talk to his attorney, HIPAA requires that you first must have the patient sign a written authorization to discuss this information with the attorney, Fleischman says. But remember that getting your patient's account paid is not the attorney's responsibility - it's the patient's, he adds. So if anything, explain to the attorney that his client (your patient) is being difficult and ask if he can help convince the patient to pay the money he owes.

Try These 4 Tactics

1. Send the account to collections. Regardless of the patient's court settlement status, you are entitled to make all reasonable attempts to collect on the account, Fleischman says. And if a collector threatens to report the patient's delinquent debt to a credit bureau, that may get results.

On the other hand, the patient will likely give the collector the same excuse he's been giving you, Fleischman says. So you really need to be aggressive with your initial in-house collection attempts because the more time that passes, the less likely you'll be able to collect the debt, he says.

2. Send a letter from your attorney. To catch the patient's attention, have your practice's attorney send a letter directly to the patient stating that he owes your practice money, regardless of his legal case status, Fleischman says.

3. Obtain a letter of protection from the patient's attorney guaranteeing that the patient will pay your bill upon settlement.

4. Stay in touch. If you've already tried collections and an attorney's letter with no success, you may still want to monitor the case by sending monthly letters to the patient's attorney asking for case status updates.

Note: Prevention is the best solution to this problem, so be proactive. Verify motor-vehicle accident and workers' compensation coverage and get authorization to treat before you see patients. And when a patient first comes to your practice, have him sign a financial agreement stating he will be responsible for the bill.