Practice Management Alert

Even with consistent adherence to collection procedures, practices will have some outstanding patient balances they just cant seem to get paid. 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.
 
Getting results from a collection agency is a two-way street, says Bob Shultz, a representative with Berks Credit and Collection in Sinking Spring, Pa., an agency with 90 percent of its business in medical collection. The practice needs to have financial policies and collection procedures in place and consistently adhere to them so the agency has the tools it needs to do the job, he says. And the agency needs to devote the staff and effort to pursue payment.
 
One of the biggest problems physician practices have with collecting money is the public-relations issue, Shultz says. As the providers of services, they are limited to how aggressively they can pursue their money, because they have to protect their reputations so patients keep coming to see them. With a collection agency, the doctors are off the hook. If patients complain, the doctors can blame it on the outside agency.
 
Practices have nothing to lose by hiring a collection agency to try to obtain payment. When we send an account to the collection agency, whatever we get from the agency on that account is great because we just figure were not going to get anything, says Bonnie Thomas, CPC, operations director for West Jersey Anesthesia Associates, a 28-physician practice in Marlton, N.J.
 
If you are shopping for a collection agency, Shultz and Thomas recommend the following:
 
1. Experience counts. Collecting owed medical bills is not the same as collecting delinquent credit-card accounts, Shultz says. I can be more aggressive when collecting on a bank account than I can with a medical practice. Although the bank and the medical practice both want their money, the medical practice wants the patient to return, while the bank doesnt want the business if the customer doesnt pay the bills, he says.
 
Thomas adds that the agency also needs to understand how insurance payments work, what part of the bill is the patients responsibility, and the physicians need to protect patient confidentiality.
 
2. 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, Shultz says. 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 promulgated by the association and have access to continuing education through the [...]