Understanding Revenue Recovery, continued from page 13 stage in revenue recovery – collections. An account that isn’t being appealed with an insurance carrier really shouldn’t stay in billing longer than 180 days. The longer the account sits prior to being assigned to collections, the greater the likelihood of nonpayment by the patient.
BILLERS ARE NOT COLLECTORS AND COLLECTORS AREN’T BILLERS COLLECTIONS: Though billers and collectors each have an important job in revenue recovery, they each have a different job and different incentives as to how they approach their job. A biller may take 5-10 minutes per claim to submit a claim on what is usually a fairly certain return (compensation from insurance) which is a fairly low risk factor; whereas collections may require several hours of repetitious contact with the patient after initial payment has already occurred by the insurance carrier. These second stage monies being pursued are now the monies that require discussion with and education of the patient as to why payment is due and the responsibility of the patient and not insurance. This all takes time. On top of all of this, the collector may receive less than complete recovery or no recovery whatsoever on a claim. Therefore, collection agencies usually charge 30%-50% in view of the extra time and money spent to collect (it costs about $2 for each notice sent out) in relation to the risk of recovery. Some even charge a $10-$15 per account loading fee in order to cover the costs of taking on the risk. Additionally, billers that are not employees of the physician, and are conducting collection activities for monies that are post insurance payment, are considered third party debt collectors and are subject to all of the same collection laws as a collection agency. If they are not following all state and federal collection laws they are subjecting themselves and your office to liability. A good collection agency is constantly keeping themselves up to date on changes in collection law; they are constantly training their staff as to proper protocol in order to protect themselves as well as you and your reputation in the medical community. Let’s face it, when it comes to selecting a collection agency for this last stage of the revenue recovery cycle, most physicians have left this important decision up to someone else in the office. In an attempt to do what is best for their employer or client, the staff or biller will usually be looking for the agency that charges the least amount and boasts the best recoveries. These are things to be taken into consideration, however, your criteria shouldn’t end there. Ever since the “great recession,” consumers/patients have gained a lot of rights that previously didn’t exist. These new found rights are being protected by agencies such as the FTC (Federal Trade Commission) and the CFPB (Consumer Finan14 | THE BULLETIN | MARCH / APRIL 2015
cial Protection Bureau) to name a few. Many of these rights don’t affect those already conducting themselves in a professional manner. It is important to have the appropriate associate agreements in place and to know that your associates are conducting themselves according to law. Does your collection agency credit report? If so, have they taken all of the appropriate steps according to the FCRA (Fair Credit Reporting Act)? They must restrict or encrypt all medical information including your identity so as to comply with HIPAA, etc. Medical credit reports are on their way out. FICO has already changed its criteria and the CFPB is still addressing further changes. However, that is the topic for another article. IN CONCLUSION, this portion of your business does deserve at least an assessment of your present revenue recovery procedures. Decisions need to be made to determine that you are utilizing people and associates that share your common goal of revenue recovery, while protecting your good name in the medical community and protecting you from liability. I often find it puzzling why some of our independent practices in the medical community sometimes make a decision to send their revenue recovery needs to large collection agencies, often owned by out of state interests, as they overlook the Bureau of Medical Economics (BME) which is unique for the following reasons: • A resource independently and locally owned by your own medical association, SCCMA; • A member benefit with a discount; • Not-for-profit – where all of the profits go back to the medical community; • Run by experts solely devoted to medical collections; • Endorsed by CMA, SCCMA, MCMS, and ACCMA; and • Lastly and probably most importantly, actively protecting physicians from liability. I am hopeful that when you take the time to investigate your revenue recovery cycle, you will allow BME the opportunity to show you why we are unique. This by no means encompasses each and every aspect of revenue recovery, you may wish to attend or have a staff member attend one of our upcoming Revenue Recovery Boot Camp Seminars. If you have questions or are interested in more information about BME, please contact our client relations director Karen Jorgenson at (408) 998-5811 Ext. 3034 or email email@example.com.