Collections are a routine part of the functions performed by medical billing services, but some types of collections have a particularly low return rate. For example, patients are often reluctant to turn a reimbursement for out-of-network benefits over to their healthcare practitioner, which presents a risk for both practitioners and their billing services.
Several reasons exist for the challenges a billing service faces in collecting these reimbursements. In the first place, a billing service is neither the practitioner nor the insurance company. These facts mean that a billing service is at least two steps removed from the patient, often making it impractical to directly collect the reimbursements from the patients. The strategies for this process therefore consist of working with practitioners to improve their collections rate, which may be grouped into patient policies, transparent fees and good faith collection efforts.
Clear Defined Patient Policies
Effective patient policies provide the primary means of collecting reimbursements for out-of-network practitioners. The most importance aspect of these policies is an enforceable assignment of benefits that clearly specifies the patient is required to turn reimbursements from the insurer over to the practitioner. Furthermore, practitioners should also have a comprehensive financial responsibility agreement with their patients, which requires the patients to assume full responsibility for any bills not covered by insurance. This agreement may be part of the assignment of benefits or a separate document.
A practitioner who doesn’t have either of these policies in place should raise a major red flag for the billing service, as this is often the reason for a low collections rate. Billing services should require these practitioners to implement assignment of benefits and financial responsibility agreements before taking them on as clients. Otherwise, the expected revenue stream from this client may never materialize.
The patients of out-of-network providers often lack an understanding of their total treatment cost and who will pay for them. A transparent fee structure is therefore essential for collecting reimbursements, but providers are rarely interested in spending time explaining financial issues rather than medical issues. However, they’re also running a business, which requires a disclosure of fees and financial responsibility.
Healthcare practitioners have many reasons for not disclosing fees to their patients, but the double fee issue is one of the most significant. This is a problem that routinely occurs with insured healthcare services because the amount that practitioners expect their patients to pay is rarely what they will bill the insurance company. Some states are trying to address double fees by enacting legislation that increases fee transparency for the patient. For example, New York’s “Surprise Bill Law” went into effect in 2015, which requires health practitioners to disclose their total fees to patients.
Good Faith Collection Efforts after Patient Leave the Office
The next issue in improving return rates for reimbursements is to make good faith collection efforts. The majority of states have passed laws regulating this procedure, which vary considerably in their details. However, a good faith effort generally means that debtors such as billing services must try to collect on a bill at least three times before proceeding to litigation. Even in states that don’t legally require three attempts, it’s still good business practice to do so. Health practitioners can use a variety of methods to collect on aged accounts, including sending the account to a dedicated collections company, filing suit directly in small claims court or hiring an attorney to initiate the suit. It often makes more sense to sue in the case of insurance reimbursement, since the patient is committing insurance fraud in addition to failing to pay a debt.
M-Scribe Technologies, LLC can assist you with your billing and coding issues, including collections. Contact me at 770-666-0470 or email at firstname.lastname@example.org to find out how we can help you with your medical practice’s needs.