A TRAINING SESSION FOR SDCMS MEMBERS & OFFICE STAFF “MAXAMIZE YOUR REIMBURSEMENTS WITH EFFECTIVE COLLECTIONS” April 19, 2008 Created by: Catherine Sherman Vice President
SEMINAR PURPOSE • To learn how to maximize your reimbursements by implementing effective collection procedures that are appropriate for your healthcare practice. In order to do this, you will need to know why collections is important and what policies and procedures to establish for your practice. • The success or failure of your practice depends heavily upon how well you, the employees, perform in daily operations. In essence, how well you uphold your image to the public, how well you communicate with the patient and fellow employees, how well you obtain information, and how well your actions provide the necessary results.
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You will learn: • How to establish Consistent Procedures for Collections • How to Educate Your Patients • How to Collect at the Time of Service • How to Reduce Billing Costs • How to Increase Cash Flow • When and Why to Use a Collection Agency • How to Collect Past Due Accounts • The four Cs of Collections
What are you up against? • • • • • • • • •
Patients Third Parties General Misconceptions Insurance Pays 100% The doctor has more money than I do It costs too much I don’t have a job Bankruptcy I didn’t want to be sick
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HOW TO ESTABLISH CONSISTENT PROCEDURES FOR COLLECTIONS: • Establish a written policy and procedures manual for self-pay collections and billing. • No more than three billing statements should be sent. • Make a telephone call(s) to the patient at set intervals. • Final statement should indicate “please pay immediately or your account will be referred to our collection agency.” • Outsource accounts to a collection agency.
• Explain to your employees that the policies and procedures you have established for billing and collections are expected to be used regularly. • Have all employees, including physicians, comply with these policies. • Verify Data before patient is seen. • Accept as many credit cards as reasonably possible.
HOW TO EDUCATE YOUR PATIENTS: •
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Be sure the patient knows what your expectations are at the time their appointment is scheduled. • You will need their insurance card. • They will have to pay their co-pay, if any, before they are seen. Inform your patient of the possibility they may have a future balance due and that they may receive a billing statement for the aforementioned balance. • Deductible • Non-covered charges • Co-Insurance • Possible pre-existing condition If your office uses an outside billing company, you should explain this to your patient either verbally or in writing. • What is the process of the patient billing and collections this outside billing company follows? • Will they get a statement? • Will the billing service contact them?
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HOW TO COLLECT AT THE TIME OF SERVICE y WHEN THE PATIENT IS IN THE OFFICE: Your front office personnel must collect as much of the patient portion due as possible at the time of service. If done successfully this will eliminate the need to bill the patient or at the very least minimize billing costs. This has several positive effects Increase Daily Cash Flow Reduce Your Accounts Receivable Eliminate Collection Personnel Time and Costs Reduce Bad Debt Write-offs y SOFTEN UP YOUR PATIENT: Smile Use Open Posture Forward Leaning Territoriality Use Good Eye Contact Get Your Patient’s Name and Use It
yHOW DO MEDICAL BILLS RATE: Mortgage/Rent Insurance Premium Utilities Food Furniture/Appliances Loans Automobile Credit Cards Dr. Bills Hospital Bills yTHE PSYCHOLOGICAL ADVANTAGE POINTS: Remember: A warm body is easier to collect from than a cold voice at the end of a telephone line. 98% at Pre-registration 84% at Registration 62% After service is rendered but still in your office 10% Over the phone
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yHANDLING THE FEAR OF ASKING FOR MONEY: What are you really doing? You are selling your patient on the idea that they should pay now rather than later. - Give Instructions, Not Options Mr. Patient, your co-pay for today is $15. How will you be paying this today? Mr. Patient, your co-pay today is $15. Will you be paying by cash, check or credit card today? - Who do you ask? Responsible Party Patient Guarantor Executor/Executrix - Why do you ask? The patient should be made aware that your office has established a policy of collecting any patient copays before they are treated. To comply with your insurance contracts.
HOW TO REDUCE BILLING COSTS yINSURANCE OVERVIEW: Insurance is the guarantee by one to another against accidental loss. The insured by virtue of his contract, exchanges the possibility of an unknown larger loss for a comparatively certain payment. - Types of Insurance: There are three primary categories. Worker’s Compensation Commercial Individual Group Government Medicare Medi-cal - Insurance Follow-Up: Prepare – Before making the telephone call or web site inquiry to the insurance company, review the account and become familiar with all pertinent details regarding the account. Dates of Service Age of Account Insured’s Name Patient Demographics Chief Complaint Employment Age Policy and Group Numbers Expected Payment Previous Documentation, if any
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y The Communication: - Start communication with the insurance company to determine status of bill payment. Has the claim been received? Is any additional information required to adjudicate the bill? If so, what kinds of information? Where and to whom should this information be sent? What is the expected payment amount and when should it be received? If pending, find out why and what is the delay. Don’t be stalled by poor excuses, pin them down! If information is needed, be sure to clarify if there are any other problems and be sure to resolve them at the same time. - If the dollar amount and the date of payment can not be obtained from the claims examiner or representative, your office should insist on speaking with a Supervisor. The examiner and/or supervisors name should be documented. Your office should explain that he/she has been assigned the task of following up the billing of the claim. It is important to remember that time is money an the more you allow the examiner to stall the more money your practice loses.
yFailure To Pay: - If the insurance company fails to honor payment of the verified claim within reasonable dates, your practice should inform the insured that all documents for payment of their claim have been received by their insurance company and verified by your practice. - The insured should be told that your practice would appreciate his/her immediate cooperation in contacting the insurance company in order to get the matter resolved. - It must be made clear to the insured that billing to insurance companies is a courtesy to them and prompt payment and cooperation from both insurance companies and their insured is absolutely necessary for your practice to continue to provide the quality care that your patients deserve. - If you accept assignment or are a contracted provider, you have a responsibility to make a reasonable effort to collect the claim from the insurance company. - Further advise the insured that if payment is not received within thirty days, from their insurance company, their account will be re-classified to self-pay and you will expect payment in full from them.
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HOW TO INCREASE CASH FLOW yWHAT DO YOU NEED TO SUCCEED? -The key word is CASHFLOW. To meet this challenge, you must be committed to selling payment-in-full! - Regular audits of overhead costs: Telephone Costs Billing Expenses Postage Payroll Utilities Supplies - Minimize payroll and maximize your resources yFOLLOW THE 4 C’S OF THE ESSENTIAL MIND-SET: - Communicate – What are your expectations? - Credibility – How believable are you. - Clout – Clarity of objectives. - Control – Stay with time and money.
WHEN AND WHY TO USE A COLLECTIONS AGENCY Collection agencies function as an integral part of the healthcare provider’s office by allowing the physician’s office to focus on what they do best --- taking care of patients. The collections industry is a sophisticated industry that uses the latest technology such as, predictive scoring models, specialized software and trained personnel, to collect in the most efficient and ethical manner possible. Most healthcare providers choose to hire a professional collection agency because they have the expertise and resources to perform collections more efficiently and effectively, while representing their healthcare clients in a professional manner. yAfter your 3rd and final dunning notice has been mailed and phone call(s) have been made in an attempt to collect the bill, the account should be referred to your collection agency. yIf a payment plan defaults, send the account to collections right away. yIf you receive return mail and have no good phone numbers, send the account to collections right away. yWhy don’t healthcare providers simply charge off these accounts? Hospitals would probably be the appropriate source for this information. The revenue returned to non-profit hospitals by collections agencies in most cases represents the difference between a net loss and breaking even. It is estimated that collectors save the average family of four $331 a year, money they would have spent to cover the increased cost of goods and services if businesses and hospitals raise their prices to cover their losses to bad debt.
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HOW TO COLLECT PAST DUE ACCOUNTS yCONTACT: - STEP 1: ALWAYS ask for payment in full, now! Once you agree to monthly payments, you can rarely go back and ask for payment-in-full. - STEP 2: If you can’t get PIF, then ask for ½ of the balance and then an acceptable payment arrangement. - STEP 3: If still unsuccessful, ask for 1/3 of the balance and then an acceptable payment arrangement. - STEP 4: If still unsuccessful, setup an acceptable payment arrangement. Outstanding Balance Acceptable Monthly Payment $0 - $1,000 $1000 - $2499 $2500 or more
$100 $200 10% per month of the outstanding balance - STEP 5: Never wait more than 30 days for a payment!
yPAYMENT ARRANGEMENTS: Start at the top. Always ask for the balance before accepting a payment plan. Work down, not up. All of these steps should be established in your practice’s collection policy and used with every delinquent account. yDOCUMENT: Whenever an account is worked all documentation should be entered into your system and a new follow-up date scheduled. Documentation should be concise and accurate, as well as brief, using appropriate abbreviations. When anything is done to an account that would affect the expected date of payment, a new follow-up date should be set. Correspondence Payment arrangements Dispute
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yNO CONTACT: -
If there was no telephone contact with the patient, a dunning notice should be mailed. The follow-up date should be rescheduled and the follow-up time should be staggered to increase the likelihood of contacting the patient. Evening Weekends Lunch Hour ySOURCES FOR PAYMENT: Payment-in-Full: Checking or Savings account Credit Cards Banks Relatives Employers Loan Companies Home equity loans Stocks/Bonds Insurance Policies Sale of personal property ySOURCES FOR PAYMENT PLANTS: Partial Payments Salary or Wages Disability Check Second Job Hobby/Side Jobs Worker’s Compensation
Unemployment Check Pension Military Reserve Pay Bonus/Commission
yCOLLECTION METHODS: -
Telephone - The telephone call is the most important collection tool. It is quick and a relatively inexpensive method for contacting the patient and insurance company to discuss the overdue balance. It is also the most practical means of obtaining other sources of information about the debtor.
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Dunning Notices - The dunning notice is useful when telephone contact is not possible, but should never be substituted for the telephone call. The dunning notice does not allow for a two-way communication. You can never be certain that your message reaches the debtor nor what their response is.
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yHOW MUCH EFFORT? When working a self-pay account the following schedule of efforts is recommended: Activity Age Day 1 1st statement Day 10 1st telephone call Day 25 2nd telephone call Day 30 2nd statement (Message A) Day 45 3rd and final statement & phone call (Message B) Day 55 Account referred to collection agency yDUNNING MESSAGES: A = Unless the balance due is paid within 10 days, your account will be placed with our collection agency. B = Final Notice. We are preparing your account for placement with our collection agency.
THE FOUR C’S OF COLLECTIONS yCOMMUNICATION: Verbal What are your expectations? What do you want the patient or insurance company to do? Four Steps for Communicating Clearly: Concentrate on Objectives – When is payment due? Now! Concentrate on Yourself – Speak clearly and distinctly Avoid Technical Terms – EOB (Explanation of Benefits) Use Proper Punctuation – Both written and verbal. - As a catch all, be sure to always clarify and review. - Perception is the patient’s reality. {Woman, without her, man is a beast. Who is the beast? {“I know you believe you understand what you think I said, but I am not sure you realize that what you heard is not what I meant.
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There are six Messages present in clear communication. What you mean to say. What you actually say. What the other person hears. What the other person thinks he hears. What the other person says. What you think the other person says. -Non Verbal Communication Inflection Hard Nosing Hand out for handshake Smile yCREDIBILITY: -How do you portray yourself. -How others perceive you. -Three Ways to Increase Your Credibility: Act Firmly Act Professionally Act Intelligently
-What Will Detract From Your Credibility: Poor or unclear communication A fear of the unknown. Medical bills are usually unwanted as opposed to buying things for pleasure. The belief that healthcare debts are not real debts. Patients not expecting the high costs. -To increase credibility we must overcome the negatives and positively condition” the patient. yCONTROL: -Keep the focus of the conversation on the debt. Stay with time and money. yCHARACTER AND CAPACITY: -The sum of the attributes making up the patient’s dependability and willingness to pay. -Measuring the patient’s ability to pay. -Overcoming circumstances which can be unforeseen that can change any of the above C’s.
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Presenter Catherine Sherman Vice President, TSC Accounts Receivable Solutions
THANK YOU!
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