Urology Coding Alert

Even with consistent adherence to collection procedures, practices will have some outstanding patient balances they just can't seem to collect.

Instead of writing off the amount owed as bad debt, hiring a collection agency to pursue payment can generate revenue from those past-due accounts. If you are shopping for a collection agency, consider the following tips:

--Experience counts. Collecting owed medical bills is not the same as collecting delinquent credit-card accounts. Collectors say that they can be more aggressive when collecting on a bank account than with a medical practice. Why? Although the bank and the medical practice both want their money, the medical practice wants the patient to return, while the bank doesn't want the business if the customer doesn't pay the bills.

And the collections agency needs to understand how insurance payments work, which part of the bill is the patient's responsibility, and the physician's need to protect patient confidentiality. That's why you should go with a collection agency that has experience in medical collections.

--Check references. In addition to asking other medical practices to recommend agencies that worked well for them, you should ask the agencies for medical clients you can contact to discuss their experience with the companies. Also, ask the agencies whether they are members of the American Collectors Association (ACA), based in Minneapolis, a trade organization of collection professionals.

ACA members are agencies that adhere to a code of ethics and have access to continuing education through the association. The ACA maintains a Healthcare Services Program to help healthcare collectors stay on top of the legal issues in collecting these types of accounts.

--Negotiate a contract. Collection-agency fees are negotiable. Most are contingency-based, meaning the agency gets paid only when it collects a delinquent account. Be wary of an agency that charges fees up-front. Some medical practices argue that if you pay the agency up-front, they won't have as much incentive to collect on your accounts. Ask the collection agency what percentage they will take out of the money they collect for you.

Collection agencies may negotiate the fee based on what services you want them to provide and what types of files you're giving them. For example, the fee might depend on how accurate and complete the patient information is on the accounts, how old the accounts are and how many accounts the practice turns over to the agency. If all of your accounts are 90 days old or less, the collection agency may be more willing to negotiate. If your accounts are all more than six months old, the agency will find it harder to collect and may not be willing to haggle.

Make sure your contract also stipulates how the agency will report its performance to the practice, and who is responsible in the case of negligence by the practice or the agency.

Have your compliance officer check how the Health Insurance Portability and Accountability Act (HIPAA) may affect the contract. HIPAA requires that certain language be in every contract between an entity covered by the act and the entity's business associates.

--Give complete data. Complete patient information for an agency includes names, addresses, phone numbers at home and at work, itemized statements that show when the services were rendered, how much the services cost, how much the insurance company paid, and how much each patient owes.

Practices that have done their homework on patient data will help the collection agency better pursue payment of the debt. With that information, the agency can supply the patients with verification of the debt if they request it.

--Two agencies are better than one. All collection agencies are not the same, and the fees they charge should not be the determining factor in selecting one. You may want to hire two agencies at once and have them compete with each other. Determine how much money each is collecting for you, and compare that with the fee that each agency is charging you. You'll easily be able to determine which agency has brought in the most reimbursement for your practice.

--Monitor performance. Your practice should track collection-agency performance by monitoring which accounts you send the agency, what the agency is collecting, the dollar amount of the accounts sent to the agency, and the amount of money recovered for your practice.