You Be the Expert:
Overzealous Collection Agency
Published on Wed May 01, 2002
Test your knowledge. Determine how you would handle this situation before looking at the box below for the answer.
Question: If an account has been turned over to collection and the insurance company has told the collection agency it will pay a certain amount, what happens to the amount "discounted" off our charges? Our collection agency won't stop hassling patients after their insurance has finally paid the claim. It keeps trying to make the patient pay the amount the insurance won't pay.
Louisiana Subscriber
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Answer: The problem here appears to be twofold. First, the practice's collection agency is probably not experienced with medical collections. It doesn't appear to understand that payer contracts often require practices to write off a certain amount of their charges as the contractual adjustment. Second, you may be sending accounts to collections too soon. You should check your contract with the payer to see how long the insurer has to pay the claim. States also have prompt-payment laws that stipulate how long payers have to pay claims.
When hiring a collection agency, look for one with experience handling medical accounts. Collecting on owed medical bills is not the same as collecting on delinquent car payments or credit-card bills. Most physicians don't want to alienate their patients, even those who are having problems paying a bill. You're dealing with people who have medical problems, and the agency needs to be sensitive to that. It must also understand how insurance payments work, what part of the bill is the patient's responsibility, and the physician's need to protect patient confidentiality.
Note: For more on hiring a collection agency, see page 12 of the September 2001 Medical Office Billing and Collections.
You should evaluate what kinds of accounts you are sending to the agency. Consider whether you should send accounts to an agency that's going to charge you a percentage of what's collected as its fee when you could collect from an insurance company. Remember that you have the contract with the collection agency and can direct its activities on your behalf. Discuss with the agency your expectations and the techniques it uses with your patients. If you're dissatisfied with the way the agency is treating your patients, find another company.
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