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Issues and Trends in HBI Ch 14
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Issues and Trends in HBI Ch 14

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  • Teaching Notes:
     Suggest to students that they review the key terms in this chapter prior to reading the chapter or hearing the lecture. This will enhance their understanding of the material.
     
  • Learning Outcome: 14.1 Explain the structure of a typical financial policy.
    Teaching Notes:
    Examine Figure 14.1 and discuss with students the reasons why effective patient billing begins with sound financial policies and procedures.
    Ask students to describe three advantages of having a financial policy in place and to identify possible errors that a medical practice could expect if no financial policy was in place.
  • Learning Outcome: 14.2 Describe the purpose and content of patients’ statements and the procedures for working with them.
    Teaching Notes:
     
    Ask students to identify and describe the information from an RA that a PMP uses to update the day sheet.
    Examine and discuss with students strategies to ensure that the amount the patient owes for each reported procedure is calculated accurately.
  • Learning Outcome: 14.2 Describe the purpose and content of patients’ statements and the procedures for working with them.
    Teaching Notes:
     
    Refer to Figure 14.3 (c), then identify and discuss with students the breakdown of all services provided.
    Ask students to describe the advantages of having a patient statement that is easy to read and understand.
  • Learning Outcome: 14.3 Compare individual patient billing and guarantor billing.
    Teaching Notes:
     
    Ask students to describe the different types of patient billing groups and explain how each one is used.
    Examine and discuss with students the advantages of dividing patients into specific billing groups.
  • Learning Outcome: 14.3 Compare individual patient billing and guarantor billing.
    Teaching Notes:
     
    Compare the advantages of cycle versus guarantor billing.
  • Learning Outcome: 14.4 Classify the responsibilities for each position that is typically part of billing and collections.
    Teaching Notes:
     
    Examine and discuss with students some of the reasons why patients may not pay their medical bills (patient thinks bill is too high; patient thinks the care rendered was not appropriate or not effective; patient has personal financial problems; bill was sent to an incorrect address; there is a misunderstanding about the amount the patient’s insurance pays on the bill; etc.).
    Ask students to provide an example of how they would approach a patient who misunderstands the medical bill and strategies for collecting the balance due.
  • Learning Outcome: 14.4 Classify the responsibilities for each position that is typically part of billing and collections.
    Teaching Notes:
     
    Identify and discuss with students some examples of embezzlement that could occur in a medical practice.
    Ask students to explain how aging reports help to keep accounts receivables up-to-date.
  • Learning Outcome: 14.5 Describe the processes and methods used to collect outstanding balances.
    Teaching Notes:
     
    Identify and discuss with students why it is important to be straightforward and professional when working out collection agreements with patients.
    Ask students to provide an example of how collection letters and phone calls can help ensure that payments are made in a timely manner.
  • Learning Outcome: 14.5 Describe the processes and methods used to collect outstanding balances.
    Teaching Notes:
     
    Examine Figure 14.5 with students and describe how each act protects patients (debtors).
    Ask students to provide three examples of how the Telephone Consumer Protection Act of 1991 protects patients.
  • Learning Outcome: 14.6 Name the two federal laws that govern credit arrangements.
    Teaching Notes:
     
    Ask students to explain how the Equal Credit Opportunity Act (ECOA) protects patients from discrimination.
    Ask students to describe how the Truth in Lending Act ensures that patients understand the terms of the payment agreement.
  • Learning Outcome: 14.6 Name the two federal laws that govern credit arrangements.
    Teaching Notes:
     
    Provide an overdue balance scenario for students and discuss a straightforward and professional approach to creating a collection agreement with the patient.
    Optional Assignment:
    Ask students to create a written prepayment plan for future medical services.
  • Learning Outcome: 14.7 Discuss the tools that can be used to locate unresponsive or missing patients.
    Teaching Notes:
     
    Identify and discuss with students the advantages and disadvantages of using a collection agency.
    Ask students to provide an example of how collection letters and phone calls can help ensure that payments are made in a timely manner.
  • Learning Outcome: 14.7 Discuss the tools that can be used to locate unresponsive or missing patients.
    Teaching Notes:
     
    Examine and discuss with students how the Fair Credit Reporting Act protects patients. Why is this important in a medical office?
    Ask students to explain how the Fair and Accurate Credit Transaction Act protects a patient’s credit rating.
  • Learning Outcome: 14.8 Describe the procedures for clearing uncollectible balances.
    Teaching Notes:
     
    Examine and discuss with students why bankruptcy qualifies a patient's balance to be written off.
    Ask students to explain how the means test can determine bad debt.
  • Learning Outcome: 14.8 Describe the procedures for clearing uncollectible balances.
    Teaching Notes:
     
    Ask students to provide some examples of how to confirm patient refund amounts.
  • Learning Outcome: 14.9 Analyze the purpose of a retention schedule.
    Teaching Notes:
     
    Ask students to describe the advantages of medical practices shifting towards electronic record keeping.
    Examine and discuss with students why it is important to retain medical and financial records.
  • Transcript

    • 1. CHAPTER 14 Patient Billing and Collections © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
    • 2. Learning Outcomes 14-2 When you finish this chapter, you will be able to: 14.1 Explain the structure of a typical financial policy. 14.2 Describe the purpose and content of patients’ statements and the procedures for working with them. 14.3 Compare individual patient billing and guarantor billing. 14.4 Classify the responsibilities for each position that is typically part of billing and collections.
    • 3. Learning Outcomes (continued) 14-3 When you finish this chapter, you will be able to: 14.5 Describe the processes and methods used to collect outstanding balances. 14.6 Name the two federal laws that govern credit arrangements. 14.7 Discuss the tools that can be used to locate unresponsive or missing patients. 14.8 Describe the procedures for clearing uncollectible balances. 14.9 Analyze the purpose of a retention schedule.
    • 4. Key Terms • • • • • • • • • • • bad debt bankruptcy collection agency collection ratio collections collections specialist credit bureaus credit reporting cycle billing day sheet embezzlement 14-4 • Equal Credit Opportunity Act (ECOA) • Fair and Accurate Credit Transaction Act (FACTA) • Fair Credit Reporting Act (FCRA) • Fair Debt Collection Practices Act (FDCPA) of 1977 • guarantor billing • means test • nonsufficient fund (NSF) check
    • 5. 14-5 Key Terms (continued) • • • • • • • • patient aging report patient refunds patient statement payment plan prepayment plan retention schedule skip trace Telephone Consumer Protection Act of 1991 • Truth in Lending Act • uncollectible accounts
    • 6. 14.1 Patient Financial Responsibility 14-6 • Effective patient billing begins with sound financial policies and procedures • Medical practices use many methods to inform patients of their financial policies and procedures: – Payment policies are explained in brochures and on signs in the reception area as well as orally by registration staff – Patients are often asked to read and sign a statement that they understand and will comply with the payment policy – Checks may be accepted but nonsufficient funds (NSF) check may not be honored if account is lacking
    • 7. 14.2 Working with Patients’ Statements 14-7 • The PMP uses information from an RA to update the patient ledger and the day sheet—report summarizing the business day’s charges and payments – These data are used to generate patient statements —printed bills that show services provided to a patient, total payments made, total charges, adjustments, and balance due • Patients may owe coinsurance, deductibles, and fees for noncovered services.
    • 8. 14.2 Working with Patients’ Statements (continued) 14-8 • Patient statements are designed to be direct and easy to read, clearly stating: – – – – General information about the practice Cost breakdown of all services provided Balances owed Date of the statement and sometimes the due date for the payment – Accepted methods of payment (sometimes necessary)
    • 9. 14.3 The Billing Cycle 14-9 • Cycle billing—type of billing which divides patients with current balances into groups to even out monthly statement printing and mailing – Spreads out the workload – If the billing cycle is weekly, for example, the patient accounts are divided into four groups so that 25 percent of the bills go out each week
    • 10. 14.3 The Billing Cycle (continued) • Patient billing: – Each patient who has a balance receives a mailed patient statement • Guarantor billing—grouping patient billing under the insurance policyholder – Statements are grouped by guarantor and cover all patient accounts that are guaranteed by that individual – Produces fewer bills to track but can become unwieldy when family members have various health plans and/or secondary plans 14-10
    • 11. 14.4 Organizing for Effective Collections 14-11 • The term collections refers to all the activities related to patient accounts and follow-up • Large practices may have separate collections departments with these typical job functions: – Billing/collections manager—responsible for establishing office policies and enabling collections specialists to successfully perform their jobs – Bookkeeper—records funds coming into and going out of the practice – Collections specialist—staff member with training in proper collections techniques
    • 12. 14.4 Organizing for Effective Collections (continued) 14-12 • Collections specialists: – Trained to work directly with the practice’s patients to resolve overdue bills – Study aging reports and follow up on patient accounts that are past due – Act ethically and professionally in contact with patients • Embezzlement—stealing of funds by an employee or contractor
    • 13. 14.5 Collection Regulations and Procedures 14-13 • Processes and methods used to collect outstanding balances: – Efforts to collect past-due balances are strictly regulated by law and by office policy – Both collection letters and phone calls are integral parts of the collections process – Collections specialists maintain a professional attitude while being straightforward; they must be prepared for difficult situations and ready to work out credit arrangements and payment plans
    • 14. 14.5 Collection Regulations and Procedures (continued) 14-14 • Fair Debt Collection Practices Act of 1977 (FDCPA)—laws regulating collection practices • Telephone Consumer Protection Act of 1991 —law regulating consumer collections to ensure fair and ethical treatment of debtors • Collection ratio – average number of days it takes a practice to convert its AR into cash • Patient aging report—report grouping unpaid patients’ bills by the length of time they remain due – Divides information into categories based on each statement’s beginning date
    • 15. 14.6 Credit Arrangements and Payment Plans 14-15 • Two federal laws govern payment arrangements: – Equal Credit Opportunity Act (ECOA)—law that prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, or age or because a person receives public assistance – Truth in Lending Act—law requiring disclosure of finance charges and late fees for payment plans
    • 16. 14.6 Credit Arrangements and Payment Plans (continued) 14-16 • Payment plan—patient’s agreement to pay medical bills according to a schedule – Practices have guidelines for appropriate timeframes and minimum payment amounts for payment plans • Prepayment plan—payment before medical services are provided – May be used when patients are scheduled to have major, expensive procedures
    • 17. 14.7 Collection Agencies and Credit Reporting 14-17 • Practices use a variety of methods to collect funds from patients who have not paid: – Collection agency—outside firm hired to collect overdue accounts – Credit reporting—analysis of a person’s credit standing during the collections process – Credit bureaus—organizations that supply information about consumers’ credit history – Skip trace—process of locating a patient who has an outstanding balance
    • 18. 14.7 Collection Agencies and Credit Reporting (continued) 14-18 • Fair Credit Reporting Act (FCRA)—law requiring consumer reporting agencies to have reasonable and fair procedures • Fair and Accurate Credit Transaction Act (FACTA)—law designed to protect the accuracy and privacy of credit reports
    • 19. 14.8 Writing Off Uncollectible Accounts 14-19 • Not all balances due to the practice will be paid • Practices must know when to write off an account – Uncollectible accounts—monies that cannot be collected and must be written off – Bad debt—account deemed uncollectible – Means test—process of fairly determining a patient’s ability to pay – Bankruptcy—declaration that a person is unable to pay his or her debts
    • 20. 14.8 Writing Off Uncollectible Accounts (continued) 14-20 • Patient refunds—money that needs to be returned to patients when the practice has overcharged a patient for a service – Patients’ refunds or credit balances are handled differently than insurance overpayments, which must be refunded to the payer
    • 21. 14.9 Record Retention 14-21 • The retention of medical records follows office policy and is also regulated by law – Retention schedule—practice policy governing the handling and storage of patients’ medical records • Medical practices must be ready to answer patient requests for information and records and to defend claims that are questioned • Financial records are generally saved according to federal business records retention requirements
    • 22. Summary
    • 23. Summary
    • 24. Summary