15 Patient Billing and Collections
Learning Outcomes <ul><li>When you finish this chapter, you will be able to: </li></ul><ul><li>15.1  Discuss the ways prac...
Learning Outcomes (Continued) <ul><li>When you finish this chapter, you will be able to: </li></ul><ul><li>15.5  Describe ...
Key Terms <ul><li>bad debt </li></ul><ul><li>bankruptcy </li></ul><ul><li>collection agency </li></ul><ul><li>collections ...
Key Terms (Continued) <ul><li>patient aging report </li></ul><ul><li>patient refunds </li></ul><ul><li>patient statement <...
15.1 Patient Billing <ul><li>Effective patient billing begins with sound financial policies and procedures </li></ul><ul><...
15.2 Working with Patients’ Statements <ul><li>The PMP uses information from an RA/EOB to update the patient ledger and th...
15.2 Working with Patients’ Statements (Continued) <ul><li>Patient statements are designed to be direct and easy to read, ...
15.3 The Billing Cycle <ul><li>Cycle billing— type of billing which divides patients with current balances into groups to ...
15.3 The Billing Cycle (Continued) <ul><li>Patient billing: </li></ul><ul><ul><li>Each patient who has a balance receives ...
15.4 Organizing for Effective Collections <ul><li>The term  collections  refers to all the activities related to patient a...
15.4 Organizing for Effective Collections (Continued) <ul><li>Collections specialists: </li></ul><ul><ul><li>Trained to wo...
15.5 Collection Regulations and  Procedures <ul><li>Processes and methods used to collect outstanding balances: </li></ul>...
15.5 Collection Regulations and  Procedures (Continued) <ul><li>Fair Debt Collection Practices Act of 1977 (FDCPA)— laws r...
15.6 Credit Arrangements and Payment Plans <ul><li>Two federal laws govern payment arrangements: </li></ul><ul><ul><li>Equ...
15.6 Credit Arrangements and Payment Plans (Continued) <ul><li>Payment plan— patient’s agreement to pay medical bills acco...
15.7 Collection Agencies and Credit Reporting <ul><li>Practices use a variety of methods to collect funds from patients wh...
15.7 Collection Agencies and Credit Reporting (Continued) <ul><li>Fair Credit Reporting Act (FCRA)— law requiring consumer...
15.8 Writing Off Uncollectible Accounts <ul><li>Not all balances due to the practice will be paid </li></ul><ul><li>Practi...
15.8 Writing Off Uncollectible Accounts (Continued) <ul><li>Patient refunds— money that needs to be returned to patients w...
15.9 Record Retention <ul><li>The retention of medical records follows office policy and is also regulated by law </li></u...
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Survey of Medical Insurance pp ch15

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  • Teaching Notes:   Have students define all key terms as an assignment. Then, in class, ask each student to define one key term aloud.   Optional assignment: Have students do an Internet search of one key term and write a short paragraph describing what they learned about that term from looking at a few websites.
  • Teaching Notes:   Have students define all key terms as an assignment. Then, in class, ask each student to define one key term aloud.   Optional assignment: Have students do an Internet search of one key term and write a short paragraph describing what they learned about that term from looking at a few websites.
  • Learning Outcome: 15.1 Discuss the ways practices explain their financial policies to patients. Pages: 562-565 Teaching Notes:   Have students explain the reasons why effective patient billing begins with sound financial policies and procedures, in their own words. Analyze the sample financial policy in Figure 15.1 as a class.
  • Learning Outcome: 15.2 Describe the purpose and content of patients’ statements and the procedures for working with them. Pages: 565-568 Teaching Notes:   Have students name the information from an RA/EOB that a PMP uses to update the day sheet. (The payer’s payment for each reported procedures is entered; the amount the patient owes for each reported procedure is calculated; if any part of a charge must be written off due to a payer’s required adjustment, this amount is also entered.)
  • Learning Outcome: 15.2 Describe the purpose and content of patients’ statements and the procedures for working with them. Pages: 565-568 Teaching Notes:   Examine the contents of the patient statement in Figure 15.3 (c) with your class.
  • Learning Outcome: 15.3 Compare individual patient billing and guarantor billing. Pages: 568-569 Teaching Notes:   Have your students debate the advantages of the different billing methods, and explain which one they would use.
  • Learning Outcome: 15.3 Compare individual patient billing and guarantor billing. Pages: 568-569 Teaching Notes:   Have your students debate the advantages of the different billing methods, and explain which one they would use.
  • Learning Outcome: 15.4 Discuss the responsibilities of a collections specialist, and describe other positions that are typically part of the billing and collections function. Pages: 569-570 Teaching Notes:   Ask your students to name some reasons why a patient may not have paid their bill. (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.)
  • Learning Outcome: 15.4 Discuss the responsibilities of a collections specialist, and describe other positions that are typically part of the billing and collections function. Pages: 569-570 Teaching Notes:   Have your students create some examples of embezzlement that could occur in a medical practice.
  • Learning Outcome: 15.5 Describe the processes and methods used to collect outstanding balances due to the medical practice. Pages: 570-576 Teaching Notes:   Have your students practice making pretend phone calls to each other to try to collect an overdue bill.
  • Learning Outcome: 15.5 Describe the processes and methods used to collect outstanding balances due to the medical practice. Pages: 570-576 Teaching Notes:   Review the patient aging report in Figure 15.5 with your class.
  • Learning Outcome: 15.6 Name the two federal laws that govern credit arrangements. Pages: 576-577 Teaching Notes:   Ask your students to name some of the factors that are among the considerations lenders use to determine creditworthiness. (Income; expenses; debts; credit history.)
  • Learning Outcome: 15.6 Name the two federal laws that govern credit arrangements. Pages: 576-577 Teaching Notes:   Create some scenarios that require your students to devise a payment plan to address an overdue balance.
  • Learning Outcome: 15.7 Discuss the tools that can be used to locate unresponsive or missing patients. Pages: 577-581 Teaching Notes:   Have your class discuss the advantages and disadvantages of using a collection agency.
  • Learning Outcome: 15.7 Discuss the tools that can be used to locate unresponsive or missing patients. Pages: 577-581 Teaching Notes:   Ask your students to name the four main points that a written program must address under the Red Flags rule. (See the numbered list on page 580.)
  • Learning Outcome: 15.8 Describe the procedures for clearing uncollectible balances from the practice’s accounts receivable. Pages: 582-583 Teaching Notes:   Have your students name and explain some of the common types of uncollectible accounts.
  • Learning Outcome: 15.8 Describe the procedures for clearing uncollectible balances from the practice’s accounts receivable. Pages: 582-583 Teaching Notes:   Have your students name and explain some of the common types of uncollectible accounts.
  • Learning Outcome: 15.9 Explain the purpose of a retention schedule and the requirements for retaining patient information. Pages: 583-584 Teaching Notes:   Ask your students to describe the changes they think have come about in record retention as medical practices shift toward electronic record keeping.
  • Survey of Medical Insurance pp ch15

    1. 1. 15 Patient Billing and Collections
    2. 2. Learning Outcomes <ul><li>When you finish this chapter, you will be able to: </li></ul><ul><li>15.1 Discuss the ways practices explain their financial policies to patients. </li></ul><ul><li>15.2 Describe the purpose and content of patients’ statements and the procedures for working with them. </li></ul><ul><li>15.3 Compare individual patient billing and guarantor billing. </li></ul><ul><li>15.4 Discuss the responsibilities of a collections specialist, and describe other positions that are typically part of the billing and collections function. </li></ul>15-2
    3. 3. Learning Outcomes (Continued) <ul><li>When you finish this chapter, you will be able to: </li></ul><ul><li>15.5 Describe the processes and methods used to collect outstanding balances due to the medical practice. </li></ul><ul><li>15.6 Name the two federal laws that govern credit arrangements. </li></ul><ul><li>15.7 Discuss the tools that can be used to locate unresponsive or missing patients. </li></ul><ul><li>15.8 Describe the procedures for clearing uncollectible balances from the practice’s accounts receivable. </li></ul><ul><li>15.9 Explain the purpose of a retention schedule and the requirements for retaining patient information. </li></ul>15-3
    4. 4. Key Terms <ul><li>bad debt </li></ul><ul><li>bankruptcy </li></ul><ul><li>collection agency </li></ul><ul><li>collections </li></ul><ul><li>collections specialist </li></ul><ul><li>credit bureaus </li></ul><ul><li>credit reporting </li></ul><ul><li>cycle billing </li></ul><ul><li>day sheet </li></ul><ul><li>embezzlement </li></ul>15-4 <ul><li>Equal Credit Opportunity Act (ECOA) </li></ul><ul><li>Fair and Accurate Credit Transaction Act (FACTA) </li></ul><ul><li>Fair Credit Reporting Act (FCRA) </li></ul><ul><li>Fair Debt Collection Practices Act (FDCPA) of 1977 </li></ul><ul><li>guarantor billing </li></ul><ul><li>means test </li></ul>
    5. 5. Key Terms (Continued) <ul><li>patient aging report </li></ul><ul><li>patient refunds </li></ul><ul><li>patient statement </li></ul><ul><li>payment plan </li></ul><ul><li>prepayment plan </li></ul><ul><li>Red Flags rule </li></ul><ul><li>retention schedule </li></ul><ul><li>skip trace </li></ul><ul><li>Telephone Consumer Protection Act of 1991 </li></ul>15-5 <ul><li>Truth in Lending Act </li></ul><ul><li>uncollectible accounts </li></ul>
    6. 6. 15.1 Patient Billing <ul><li>Effective patient billing begins with sound financial policies and procedures </li></ul><ul><li>Medical practices use many methods to inform patients of their financial policies and procedures: </li></ul><ul><ul><li>Payment policies are explained in brochures and on signs in the reception area as well as orally by registration staff </li></ul></ul><ul><ul><li>Patients are often asked to read and sign a statement that they understand and will comply with the payment policy </li></ul></ul>15-6
    7. 7. 15.2 Working with Patients’ Statements <ul><li>The PMP uses information from an RA/EOB to update the patient ledger and the day sheet— report summarizing the business day’s charges and payments </li></ul><ul><ul><li>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 </li></ul></ul><ul><li>Patients may owe coinsurance, deductibles, and fees for noncovered services. </li></ul>15-7
    8. 8. 15.2 Working with Patients’ Statements (Continued) <ul><li>Patient statements are designed to be direct and easy to read, clearly stating: </li></ul><ul><ul><li>General information about the practice </li></ul></ul><ul><ul><li>Cost breakdown of all services provided </li></ul></ul><ul><ul><li>Balances owed </li></ul></ul><ul><ul><li>Date of the statement and sometimes the due date for the payment </li></ul></ul><ul><ul><li>Accepted methods of payment (sometimes necessary) </li></ul></ul>15-8
    9. 9. 15.3 The Billing Cycle <ul><li>Cycle billing— type of billing which divides patients with current balances into groups to even out monthly statement printing and mailing </li></ul><ul><ul><li>Spreads out the workload </li></ul></ul><ul><ul><li>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 </li></ul></ul>15-9
    10. 10. 15.3 The Billing Cycle (Continued) <ul><li>Patient billing: </li></ul><ul><ul><li>Each patient who has a balance receives a mailed patient statement </li></ul></ul><ul><li>Guarantor billing —grouping patient billing under the insurance policyholder </li></ul><ul><ul><li>Statements are grouped by guarantor and cover all patient accounts that are guaranteed by that individual </li></ul></ul><ul><ul><li>Produces fewer bills to track but can become unwieldy when family members have various health plans and/or secondary plans </li></ul></ul>15-10
    11. 11. 15.4 Organizing for Effective Collections <ul><li>The term collections refers to all the activities related to patient accounts and follow-up </li></ul><ul><li>Large practices may have separate collections departments with these typical job functions: </li></ul><ul><ul><li>Billing/collections manager—responsible for establishing office policies and enabling collections specialists to successfully perform their jobs </li></ul></ul><ul><ul><li>Bookkeeper—records funds coming into and going out of the practice </li></ul></ul><ul><ul><li>Collections specialist— staff member with training in proper collections techniques </li></ul></ul>15-11
    12. 12. 15.4 Organizing for Effective Collections (Continued) <ul><li>Collections specialists: </li></ul><ul><ul><li>Trained to work directly with the practice’s patients to resolve overdue bills </li></ul></ul><ul><ul><li>Study aging reports and follow up on patient accounts that are past due </li></ul></ul><ul><ul><li>Act ethically and professionally in contact with patients </li></ul></ul><ul><li>Embezzlement— stealing of funds by an employee or contractor </li></ul>15-12
    13. 13. 15.5 Collection Regulations and Procedures <ul><li>Processes and methods used to collect outstanding balances: </li></ul><ul><ul><li>Efforts to collect past-due balances are strictly regulated by law and by office policy </li></ul></ul><ul><ul><li>Both collection letters and phone calls are integral parts of the collections process </li></ul></ul><ul><ul><li>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 </li></ul></ul>15-13
    14. 14. 15.5 Collection Regulations and Procedures (Continued) <ul><li>Fair Debt Collection Practices Act of 1977 (FDCPA)— laws regulating collection practices </li></ul><ul><li>Telephone Consumer Protection Act of 1991— law regulating consumer collections to ensure fair and ethical treatment of debtors </li></ul><ul><li>Patient aging report— report grouping unpaid patients’ bills by the length of time they remain due </li></ul><ul><ul><li>Divides information into categories based on each statement’s beginning date </li></ul></ul>15-14
    15. 15. 15.6 Credit Arrangements and Payment Plans <ul><li>Two federal laws govern payment arrangements: </li></ul><ul><ul><li>Equal Credit Opportunity Act (ECOA)— law that prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because a person receives public assistance </li></ul></ul><ul><ul><li>Truth in Lending Act— law requiring disclosure of finance charges and late fees for payment plans </li></ul></ul>15-15
    16. 16. 15.6 Credit Arrangements and Payment Plans (Continued) <ul><li>Payment plan— patient’s agreement to pay medical bills according to a schedule </li></ul><ul><ul><li>Practices have guidelines for appropriate time frames and minimum payment amounts for payment plans </li></ul></ul><ul><li>Prepayment plan— payment before medical services are provided </li></ul><ul><ul><li>May be used when patients are scheduled to have major, expensive procedures </li></ul></ul>15-16
    17. 17. 15.7 Collection Agencies and Credit Reporting <ul><li>Practices use a variety of methods to collect funds from patients who have not paid: </li></ul><ul><ul><li>Collection agency— outside firm hired to collect overdue accounts </li></ul></ul><ul><ul><li>Credit reporting— analysis of a person’s credit standing during the collections process </li></ul></ul><ul><ul><li>Credit bureaus— organizations that supply information about consumers’ credit history </li></ul></ul><ul><ul><li>Skip trace— process of locating a patient who has an outstanding balance </li></ul></ul>15-17
    18. 18. 15.7 Collection Agencies and Credit Reporting (Continued) <ul><li>Fair Credit Reporting Act (FCRA)— law requiring consumer reporting agencies to have reasonable and fair procedures </li></ul><ul><li>Fair and Accurate Credit Transaction Act (FACTA)— laws designed to protect the accuracy and privacy of credit reports </li></ul><ul><li>Red Flags rule— law stating that health care entities must establish reasonable policies and procedures for implementing the identity theft guidelines </li></ul>15-18
    19. 19. 15.8 Writing Off Uncollectible Accounts <ul><li>Not all balances due to the practice will be paid </li></ul><ul><li>Practices must know when to write off an account </li></ul><ul><ul><li>Uncollectible accounts— monies that cannot be collected and must be written off </li></ul></ul><ul><ul><li>Bad debt— account deemed uncollectible </li></ul></ul><ul><ul><li>Means test— process of fairly determining a patient’s ability to pay </li></ul></ul><ul><ul><li>Bankruptcy— declaration that a person is unable to pay his or her debts </li></ul></ul>15-19
    20. 20. 15.8 Writing Off Uncollectible Accounts (Continued) <ul><li>Patient refunds— money that needs to be returned to patients when the practice has overcharged a patient for a service </li></ul><ul><ul><li>Patients’ refunds or credit balances are handled differently than insurance overpayments, which must be refunded to the payer </li></ul></ul>15-20
    21. 21. 15.9 Record Retention <ul><li>The retention of medical records follows office policy and is also regulated by law </li></ul><ul><ul><li>Retention schedule— practice policy governing the handling and storage of patients’ medical records </li></ul></ul><ul><li>Medical practices must be ready to answer patient requests for information and records, and to defend any claims that are questioned </li></ul><ul><li>Financial records are generally saved according to federal business records retention requirements </li></ul>15-21

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