Collections in the Medical Office
10
Learning Outcomes
10-2
When you finish this chapter, you will be able to:
10.1
10.2
Explain the importance of prompt payment laws.
Summarize the importance of a financial policy in a
medical office.
10.3 Identify the laws that regulate collections from
patients.
10.4 Demonstrate how to post a payment from a collection
agency.
10.5 Discuss the process of writing off uncollectible
accounts.
10.6 Explain how to use a patient aging report to identify
past due accounts.
Learning Outcomes (Continued)
10-3
When you finish this chapter, you will be able to:
10.7
10.8
10.9
Demonstrate how to add an account to the collection
list.
Demonstrate how to create a collection letter.
Demonstrate how to create a collection tracer report.
Key Terms
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collection agency
collection list
collection tracer report
payment plan
prompt payment laws
tickler
uncollectible accounts
write off
10-4
10.1 Laws Governing Timely Payment10-5
of Insurance Claims
• Receiving prompt payment for services is a
critical factor in determining the financial
success of a medical practice
• Prompt payment laws are state laws that
mandate a time period within which clean
claims must be paid and that call for financial
penalties to be levied against late payers
10-6
10.2 The Importance of a Financial Policy
• Collection process begins with a clear financial
policy and effective communications with
patients about their financial responsibilities
• Important to have a written financial policy
that spells out patients' responsibilities
10.2 The Importance of a Financial
Policy (Continued)
10-7
• Financial policies should tell patients how the
practice handles:
– Collecting copayments and past-due balances
– Setting up financial arrangements for unpaid
balances
– Providing care for patients with low incomes
– Payments for services not covered by insurance
– Collecting prepayments
– Accepted methods of payment
10-8
10.3 Laws Governing Patient Collections
• Patient collections are consumer collections
and are regulated by federal and state laws
• Collections from insurance carriers are
considered business collections
10.3 Laws Governing Patient Collections
10-9
(Continued)
• Fair Debt Collection Practices Act of 1977
• Telephone Consumer Protection Act of 1991
• General guidelines:
– No calls before 8 am or after 9 am
– No threats or profane language
– Respect patient privacy
– No deception or violence
10.3 Laws Governing Patient Collections
10-10
(Continued)
• A payment plan is an agreement between a
patient and a practice in which the patient
agrees to make regular monthly payments
over a specified period of time
– Truth in Lending Act applies if practice adds
finance charges and payments are made in more
than four installments
10-11
10.4 Working with Collection Agencies
• A collection agency is an outside firm hired to
collect on delinquent accounts
– Practice no longer contacts the patient if the account
is turned over to a collection agency
– Often paid on the basis of the amount of money they
collect
• When payment is received from a collection
agency, it must be posted to the patient’s account
– Information found on the statement provided by the
agency
• Exercise 10-1
10-12
10.5 Writing Off Uncollectible Accounts
• When all collection attempts are exhausted,
the collection process is ended
• Amount owed is often called an uncollectible
account or a bad debt, and it is written off the
practice’s expected accounts receivable
• A write off is a balance that has been
removed from a patient’s account
• Exercise 10-2
10.6 Using a Patient Aging Report for10-13
Collections
• An aging report shows the patient’s chart
number and name, and the amount of unpaid
charges in each of these categories:
– Current: Up to 30 days
– Past: 31 to 60 days
– Past: 61 to 90 days
– Past: 91 to 120 days
– Past: More than 120 days
• Exercise 10-3
10.7 Adding an Account to the
Collection List
10-14
• Overdue accounts are added to a collection
list
• The collection list is designed to track
activities that need to be completed as part of
the collection process
– Ticklers or collection reminders are displayed as
collection list items
• A tickler is a reminder to follow-up on an
account that is entered on the collection list
10.7 Adding an Account to the
Collection List (Continued)
10-15
• The Collection List dialog box displays ticklers
that have been entered into the database
10.7 Adding an Account to the
Collection List (Continued)
• Tickler Item dialog box
• Exercise
Tickler tab10-4
Office Notes tab
10-16
10.8 Creating Collection Letters
• Before collection letters can be sent in
Medisoft:
– Patient-responsible tickler item must be entered
in the collection list
– Collection Letter report must be created
• Report is generated when the Patient
Collection Letters option is selected on the
Reports menu
10-17
10.8 Creating Collection Letters
(Continued)
• The Patient Collection Report lists patients
with overdue accounts to whom statements
have been mailed
10-18
10.8 Creating Collection Letters
(Continued)
• After printing collection letters, an account
alert appears in the Transaction Entry, Quick
Ledger, and Appointment Entry windows
• There are three account alert abbreviations:
– RB – remainder balance
– DP – delinquent on payment plan
– IC – in collections
• Exercise 10-5
10-19
10-20
10.9 Creating a Collection Tracer Report
• A collection tracer report is used to keep track of
collection letters that were sent
• The report lists:
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Tickler item number
Responsible party
Chart number
Account balance
Date collection letter was sent
Reasons the account is in collections
• Created via the Collection Tracer Report feature on the
Reports menu
• Exercise 10-6