CHAPTER 20 Patient Billing and Collection 20-2 Learning Outcomes (cont.) 20.1Describe accounts receivable and accounts payable and the common payment

CHAPTER

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20Patient Billing and

Collection

20-2


Learning Outcomes (cont.)

20.1 Describe accounts receivable and accounts payable and the common payment methods accepted in medical practices today.

20.2 Identify the different types of documents used as statements to bill patients and how these documents are used in cycle billing.

20.3 Compare open book, written-contract, and single-entry accounts, and purpose of creating an accounts receivable aging.

20-3


Learning Outcomes (cont.)

20.4 Explain the purposes of the following credit and collections acts: ECOA, FCRA, and FDCPA, and TLA.

20.5 Relate the required components of a Truth in Lending statement.

20.6 Summarize two common types of problem collection accounts in the medical office.

20-4


Introduction

• Payment arrangements– Third-party payers – Balance billing– Payment plans– Outstanding balances

• You must understand and administer billing as well as payment collection methods

20-5


Patient Payments in the Office

• Management of– Accounts receivable (A/R)

– Accounts payable (A/P)

• Billing and collections – vital tasks

• Copayment – immediate collection

20-6


Accepting Patient Payment

• Enter charges for services provided

• Most practices accept– Cash– Check– Credit cards– Insurance

For today’s visit, the total charge is $50. How would you

like to pay?

20-7


Accepting Patient Payment (cont.)

• Cash– Count money carefully– Record payment – Give patient a receipt

• Check – Check id– Check date and

amount– Endorse it immediately

• Debit card– Immediate transfer of

funds– Processed like credit

card

20-8


Accepting Patient Payment (cont.)

• Credit card

– Check expiration date

– Keep signed receipt, give patient a copy

– Transaction fee ~ adjust patient account

– On-line payments

20-9


Payment Responsibility

• Guarantor

• Minors

– Parents or person with legal custody

– Emancipated minor

– Divorce

• Elderly patients and patients with disabilities – Consent

– Proof of guardianship

20-10


Payment Responsibility (cont.)

• Professional courtesy – Waived charges or

accept amount that the insurance pays

– Must collect copayments

20-11


Apply Your Knowledge

What is the difference between accounts receivable and accounts payable?

ANSWER: Accounts receivable is the money owed to the medical practice and accounts payable is the money owed by the medical practice.

20-12


Standard Billing Procedures

• Preparing statements – Practice contact information

– Patient name and address

– Guarantor’s name

– Balance

– Itemized list of services and charges

– Payments received

– Total balance due

20-13


Standard Billing Procedures (cont.)

• Manual statements

• Ledger card

• Computer generated statements

• Independent billing service

• Superbill

20-14


Managing Billing Cycles

• Cycle billing

– Bills each patient monthly

– Staggers billing workload

– More even cash flow

20-15



What is cycle billing?

ANSWER: Cycle billing is a system in which each patient is billed only once a month but groups of patients are billed every few days. It spreads the work of billing over the month.

Excellent!

20-16


Standard Collection Procedures

• Collection of payment is guided by

– Laws

– Professional standards

– Guidelines

• Statute of Limitations

20-17


Standard Collection Procedures (cont.)

• Statute of limitations and account types– Open-book account ~ last payment date or

charge for each illness

– Written-contract account • Payment agreement stipulated

• Regulated by Truth in Lending Act

– Single-entry account ~ shorter time limits

20-18


Using Collection Techniques

• Initial telephone calls or letters

– Friendly and sympathetic

– Call the patient at home

– Assume the patient forgot

– Ask for full amount

• Acceptable amount

• Expected payment date

20-19


Using Collection Techniques (cont.)

• Follow-up statements and collection letters

– 60 days past due – friendly but firm

– 90 days past due – stronger wording

– 120 days or more past due • Final letter

• Verify cutoff date on ledger card

• Send certified/return receipt

20-20


Preparing an Age Analysis

• The process of classifying and reviewing past-due accounts by age from the first date of billing

– Use patient ledger cards and color-coded tags to indicate the number of days past due

– List all patients’ account balances and when the charges originated

20-21


Preparing an Age Analysis (cont.)

20-22


True or False:

An open-book account consists of only one charge.

A written-contract account is regulated by the Truth in Lending Act.

A single-entry account might be used for a person who will not become a regular patient.

The statute of limitations sets an amount limit on when an account can be filed as past due.

An age analysis is a process for reviewing past-due accounts by age from the first date of billing.


ANSWER:

Correct!

T

T

T

F

F

single-entry

time

20-23


Laws That Govern Credit and Collection

• Fair Debt Collection Practices Act of 1977– Governs collection of unpaid debts

– Guidelines:• Do not call before 8 A.M. or after 9 P.M.

• Do not make threats or use profane language

• Do not discuss patient’s debt with anyone else

• Do not use any form of deception or violence to collect a debt

20-24


Laws That Govern Credit and Collection (cont.)

• Telephone Consumer Protection Act– Protects against telemarketing

– Prohibits• Automated dialing to certain numbers

• Prerecorded calls to homes

• Unsolicited advertising via fax

– Most provisions do not apply to medical practices

20-25


Laws That Govern Credit and Collection (cont.)

• Professional guidelines– AMA ~ appropriate to assess finance charges

or late charges on past-due accounts if the patient is notified in advance

– The physician must adhere to federal and state guidelines

20-26


Using Outside Collection Agencies

• Avoid those that use harsh or harassing collection practices

• Once agency has the account

– No further contact with the patient

– Maintain list of files sent for collection

– Practice decides how best to deal with the account

20-27


Insuring Accounts Receivable

• Protects the practice from lost income

– Nonpayment

– Destruction of A/R records

• Protects cash flow and ensures that the practice will have funds to cover expected expenses

20-28



What law governs the methods that can be used to collect unpaid debts?

ANSWER: The Fair Debt Collection Practices Act of 1977

Right!

20-29


Credit Arrangements

• Credit – extended by physician

• Equal Credit Opportunity Act– Reasons for not denying credit

– Must tell patient why credit was denied

– Perform a credit check

20-30


Credit Arrangements (cont.)

• Performing a credit check

– Verify employment

– Credit bureau report

• Creditworthiness of person seeking credit

• Payment history

• Fair Credit Reporting Act

20-31


Credit Arrangements (cont.)

• Unilateral Agreement– Physician agrees to patient offer – Not subject to Truth in Lending Act

• Mutual Agreement– Between patient and physician– Subject to Truth in Lending Act

• Finance charges• More than four payments

20-32


Truth in Lending Act

• Consumer Credit Protection Act

• Credit agreements of more than four payments

• The practice must– Discuss agreement with patient– Sign and retain disclosure statement

20-33


Truth in Lending Act (cont.)

• Disclosure statement– Truth in Lending Statement

– Agreement on payment terms• Total amount of debt• Down payment and payment amount• Final due date • Interest rate and total finance charges

20-34



Match:

Credit cannot be denied based on sex, race, religion, etc.

Provides a credit history.

Not regulated by the Truth in Lending Act

Bilateral agreement between the patient and physician

Covers credit agreements of more than four payments

Description of agreed terms of payment

A. Disclosure statement

B. Credit bureau

C. Equal Credit Opportunity Act

D. Unilateral agreement

E. Truth in Lending Act

F. Mutual agreement

B

C

D

F

E

A

ANSWER:

Excellent!

20-35


Common Collection Problems

• Hardship cases

– ECOA – all patients in the same circumstances must be afforded the same consideration

– May refer to clinics that provide free or reduced-fee services

20-36


Common Collection Problems (cont.)

• Patient relocation and address changes

– Skips

– Telephone or e-mail

– Ask post office for forwarding address

– Keep all returned statements and envelopes as proof of reasonable attempts to collect

20-37



What is a “skip”?

ANSWER: A patient who moves without leaving a forwarding address to which the office can sent a statement of unpaid charges.

Yes!Yes!

20-38


In Summary

20.1 Accounts Receivable refers to the money that is owed to the practice.

Accounts Payable refers to the money that the practice owes other vendors.

Common payment methods include cash, check, and debit and credit cards.

20.2 Common statement documents include the use of superbills, typed or computer-produced itemized statements, and copies of ledger cards.

In cycle billing the accounts are split in groups and statement mailing dates are staggered.

20-39


In Summary (cont.)

20.3 An open-book account consists of periodic charges and payments added as needed when patients are seen in the practice.

A written-contract account is used when the physician and patient sign a contract for a specific service or procedure.

A single-entry account is one used for patients when it is expected they will be seen only once, such as for a relative visiting the area on vacation.

An age analysis is the process of classifying and reviewing past-due accounts by age from the first date of billing.

20-40


In Summary (cont.)

20.4 ECOA is the Equal Credit Opportunity Act. It prohibits discrimination against loan applicants.

The Fair Credit Reporting Act (FCRA) requires credit bureaus supply correct and complete information to businesses to use in evaluating a person’s application for credit, insurance, or a job.

The Fair Debt Collections Practices Act or FDCPA requires debt collectors to treat debtors fairly and prohibits certain collection tactics.

The Truth in Lending Act requires creditors to provide applicants with accurate and complete credit costs and terms.

.

20-41


In Summary (cont.)

20.5 The Truth in Lending Statement must include the following elements: amount of total debt, amount of the down payment, amount of each payment and date due, due date for the final payment, interest rate, expressed as an annual percentage rate, and total finance charges

20.6 The two most common types of collection problems in the medical office are hardship cases, who simply cannot afford to pay their debt, and accounts known as skips, where the debtor moved and left no valid forwarding information so it is not possible to bill the patient.

.

20-42


End of Chapter 20

Remember that credit is money.

~ Benjamin Franklin

Documents

CHAPTER 20 Patient Billing and Collection 20-2 Learning Outcomes (cont.) 20.1Describe accounts receivable and accounts payable and the common payment