Advice You - Business

Debt collection from patients is a conflict doctors often prefer avoiding for fear of potential implications to practice reputation and increased exposure to malpractice lawsuits. Healthcare debt collections require unique combination of sensitivity, skill, and discipline. Understanding of debt collections process and outsourcing opportunities help the practice owner improve revenue cycle while m

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

inimizing practice risks.

The best way to improve the patient payment component of the revenue cycle is to collect cash payment in advance for healthcare services. However, without solid processes and disciplined implementation, upfront cash collection can challenge and frustrate front office staff, often contributing to accumulation of outstanding patient debt. Insurance companies sending paymen

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

ts directly to patients instead of the office further exacerbate the difficulties of debt collection.

A typical debt-processing scenario proceeds in three phases, starting with billing, to debt accumulation, to selection of the most appropriate collections method. Clear definition of responsibilities along with payment arrangements help effective collections, minimize practice risks, and reduce adm

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

inistration costs.

Billing Phase: Your billing office sends patient invoices and a number of reminder invoices regarding outstanding balance directly to the patient.

Debt Accumulation Phase: The patient does not pay the invoice for a time period exceeding desired limit (typically, 90-120 days). Accounts receivable distribution over the span of 30, 60, 90, and 120 days takes the sha

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

e of inverted horizontal S.

Debt Collections Phase: The practice must consider at least four alternatives for outstanding debt collection:

Dismiss the patient until all debt is paid.
Offer the patient the opportunity for a financial hardship write-off.
Take the patient to small claims court.
Hire debt collections agency.

First, dismiss

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ing a patient is not always an appropriate option because of associated reputation implications and potential medical malpractice risk. More importantly, dismissing the patient only stops subsequent debt accumulation but does not eliminate the already accumulated debt.

Next, financial hardship write-off may not be feasible as some patients refuse or are ineligible for it.

Third, a small court can

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

help collections only from patients with steady work and debt under $5,000, upon paying a typical $75 processing fee. Keep in mind that a small court limits its scope to liens and/or wage garnishments instead of actually making collections.

Finally, a specialized collection agency with thorough understanding of the claim payment process and result-oriented and accountable approach to customer servi

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

e recovers on average 15% of outstanding debt.

Key debt collections agency selection issues revolve around industry knowledge, performance, control, costs, and interaction between billing and collections services:

Specialized Industry Expertise
- Compliance and Certification. HIPAA-compliant medical record processing and legal compliance with federal and state

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

collections regulations.

"Skip-tracing." Ability to find patients that changed addresses or names

Access to Special Funding Sources. Experience of working with specialized public and private funds for victims of accidents and violence

Relevant Legal Expertise. Access to specialized legal expertise and ability to handle both small and la

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

rge debt cases in court

Understanding of Billing Processes Knowledge of healthcare claims processes and ability to successfully negotiate with insurance companies

Proven Performance

References. Provide a list of specialty-relevant references.
Quantitative Performance Measurement. Compare collections perf

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

rmance including percent collected and time to account liquidation.

Client satisfaction. Demonstrate long client retention history.

Centralized Control

Transparency. Provide real time status on all collection activities, including amount collected, actions taken, and patient responses. Include a wide selection of reports ava

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

ilable over a secure Internet connection 24 x7.

Tight Cash Flow Control. All collected money goes directly to your practice or bank account, increasing positive cash flow and immediately collecting interest. No waiting for a collection agency to take its percentage first and pay you at its convenience.

Lower Risk with Indemnification. Collections agency must

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

indemnify your practice from lawsuits resulting from collection efforts through a written hold-harmless agreement.

Flexible Contact Style. Avoid offending your patients. Collections agency must be able to vary its patient contact style (e.g., diplomatic or intensive) on a patient-by-patient basis according to your specific direction.

Patient Relationship Maintenan

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

ce. Collections agency must not intrude on your relationship with your patient. If you choose so, you should be able to maintain continuous control of patient's account, including negotiation of payment plans or dispute resolution directly with your patient as a key element of the collection process.

Economies of Scale and Fees

Collections Letter

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

eneration. Generally, the procedure to collect a debt starts with a letter to the person that owes the money sent on the letterhead of collections agency or attorney firm. A letter from an attorney often results in many outstanding debts paid. Flat fees for sending such letters vary between $5 and $15 per patient per month.

Aggressive Follow Up Using Legal Assistance.

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

If the letter does not result in payment, the collections agency must begin vigorous pursuit for outstanding monies. If payment is still not made on the outstanding invoice, a complaint is filed with the courts and served personally upon the debtor requiring their appearance in court. The attorney then appears in court on behalf of medical practice to obtain an award of the amount that is owed. Al

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

though the court usually enters an award on behalf of medical practice, it is important to note that collections are not completed at the time of award. The collections agency must continue to pursue payment of all debts through any and all legal means available, including wage garnishment, bank account seizures, or, in rare cases, arrest. Success fees vary from 30% to 50% of recovered debt.

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

li> Even Focus Regardless of Balance Size. Collections solution must be effective for all balances regardless of amount owed.

Interaction between Billing and Collections

Account Transfer Decisions. The practice manager must control the flow of patient debt and all associated information from billing service to collections agency.

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

Account Transfer Mechanism. Billing service must facilitate the infrastructure for simple, timely, and effective decision-making and digital data transfer to maintain the highest likelihood of successful debt collection.

Separation of Labor. The collection agency taking over the unpaid patient balance deals directly with the patient and the practice, excluding

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

billing service from remaining collections process and any associated fees.

Exclusion of Fees. Billing service should receive no referral or any other fees from collections agencies servicing the doctor's office. Upon account transfer away from the billing service, it should receive no fees from the medical practice for collecting the outstanding debt.

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.adviceyou.org.ua/article/32674/adviceyou-Outsourced-Debt-Collections-for-Medical-Practice--Top-5-Criteria-to-Better-Billing-Performance.html">Outsourced Debt Collections for Medical Practice - Top 5 Criteria to Better Billing Performance</a>

BB link (for phorums):
[url=http://www.adviceyou.org.ua/article/32674/adviceyou-Outsourced-Debt-Collections-for-Medical-Practice--Top-5-Criteria-to-Better-Billing-Performance.html]Outsourced Debt Collections for Medical Practice - Top 5 Criteria to Better Billing Performance[/url]

Many organizations are taking the best aspects of home and incorporating them into the workplace. They are recognizing that work is becoming home for many employees.

As a CEO I struggled long and hard over any decision to use a consultant. There are many issues that need to be managed by the client to keep a consultant from going overboard on time and costs. Too many need too long to get up to speed on your business (on your dime), cost too much and can not provide tangible results on a limited project basis. Too many are unproductive and do things in ten hours that I know I could have done in 2-3 hours as paying by the hour is often a de-motivator while paying by the task aligns the client's and consultant's interests more.

How often do guests visit your networking group yet ultimately never join? Why do they come in the first place? What are they expecting? What are they leaving with each meeting? The last question is critical and that is where to begin.

Tags

Links

Advice You - Outsourced Debt Collections for Medical Practice - Top 5 Criteria to Better Billing Performance

Related Articles: