© 2009 the mcgraw-hill companies, inc. all rights reserved 17-1 patient billing and collections...

17-1

© 2009 The McGraw-Hill Companies, Inc. All rights reserved

Patient Billing and CollectionsPatient Billing and Collections

PowerPoint® presentation to accompany:

Medical AssistingThird Edition

Booth, Whicker, Wyman, Pugh, Thompson


17-2

Learning Outcomes

17.1 Discuss the importance of accounts receivable to a medical practice.

17.2 Explain how to accept and account for payment from patients.

17.3 Prepare an invoice.

17.4 Manage a billing cycle efficiently.


17-3

Learning Outcomes (cont.)

17.5 Describe standard collection techniques.

17.6 Explain how to perform a credit check.

17.7 Identify credit arrangements.

17.8 Recognize common collection problems.


17-4

Introduction

Medical assistants take on duties that are administrative in nature

Customers have various payment options Third-party payers

(insurance carriers) Payment plans Some have large

outstanding balances

A proper understanding and administration of billing and payment collection methods is required


17-5

Basic Accounting Managing

Accounts receivable – money owed to the business

Accounts payable – money owed by the business

Billing and collections convert account receivable into readily available income


17-6

Basic Accounting

Standard payment procedures Collect payments from

patients at each office visit Brings income into practice

faster Saves cost of

Preparing and mailing bills Collecting on past-due

accounts


17-7

Basic Accounting: Determine Appropriate Fee

Fee schedule of charges for services doctor offers

Cost of services

Doctor’s experience

Charges of other doctors in the area

Fee allowed by insurance policies

Usual and customary fees

Average fee charged for a service by comparable doctors

OR

The ninetieth percentile of all fees charged by comparable doctors for the same procedure


17-8

Relative value unit (RVU) Doctor’s skill and time Professional liability

expenses Overhead costs

RVU converted to $ amount for a service

This methodology has reduced the growth rate of spending for Doctors’ professional

services Related services and

supplies Other Medicare B

services

Basic Accounting: Determine Appropriate Fee (cont.)


17-9

Charge slips Also called fee slips or transaction slips Numbered consecutively Preprinted with common services and charges Uses:

Pad of charge slips on physician’s desk Given to doctor with patient record at time of

appointment Doctor enters services provided

Basic Accounting: Accepting Payment


17-10

Complete charge slip and request payment

Most practices accept: Cash Check Credit cards Insurance

Basic Accounting: Accepting Payment (cont.)

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


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Cash Count money carefully Record payment on

ledger Give patient a receipt

Check Check date and amount Be sure check is properly

filled out Endorse it immediately


17-12


Debit card Immediate removal of funds from

bank account Processed like credit card Patient enters PIN

Credit card Prompt payment and reduces expense of mailing

bills Costs practice a percentage of each charge Check expiration date before processing


17-13

Using the pegboard system to post payments Not often used Post payment on ledger

card Generates receipt at same

time

Basic Accounting (cont.)


17-14

Third-party liability Responsibility of

insurance company to pay Minors

Parents or person with legal custody

Emancipated minor

Basic Accounting: Determining Payment Responsibility


17-15

Elderly patients/patients with disabilities Request proof of guardianship

to send bill to another person

Professional courtesy Doctor waives charges

completely or charges what the insurance will pay

Basic Accounting: Determining Payment Responsibility (cont.)


17-16

Apply Your Knowledge

What is the difference between accounts receivable and accounts payable?

ANSWER: Accounts receivable are monies owed to the medical practice and accounts payable are monies owed by the medical practice.


17-17

Standard Billing Procedures: Preparing Invoices

Prepared and mailed Patients who do not pay Patients who make only a partial payment

Using codes on the invoice For common procedures Itemized list on invoice

Using ledger cards Photocopy to send to patient


17-18

Generating computer invoice Print invoice for balance due

Using independent billing services Large practices

Sending invoices electronically To insurance companies

Standard Billing Procedures: Preparing Invoices (cont.)


17-19

Using the superbill (encounter form) Includes

Charges for services rendered that day Invoice for payment or insurance copayment Information needed to submit insurance claim

May be computerized

Attach to medical record for physician to complete at time of visit

Standard Billing Procedures (cont.)


17-20

Standard Billing Procedures (cont.)

Managing billing cycles Cycle billing

Bills each patient only once a month

Spreads the work of billing over the month

Invoice groups of patients every few days


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What is cycle billing?

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

Excellent!


17-22

Standard Collection Procedures

Collection of payment if not paid during standard period is guided by Statute of limitations

Set time limit on when a collection suit on a past-due account can legally be filed

Time limit varies with type of account


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Standard Collection Procedures (cont.)

Statute of limitations and account types Open-book account

Open to charges made occasionally Last date of payment or charge for each illness

Written-contract account Contract with patient to pay over four installations Regulated by Truth in Lending Act

Single-entry account Account with only one charge Shorter time limit than open-book accounts


17-24

Collection Procedures: Using Collection Techniques

Initial telephone calls or letters Friendly and sympathetic

Call the patient at home

Do not Call patients at work Leave a message on an

answering machine


17-25

Collection Procedures: Preparing Statements

Invoice with a courteous reminder that payment is due

Send a collection letter when account is past due 60 days – nice but firm

90 days – stronger wording

120 days – final letter Forward the account to a

collection agency


17-26

Collection Procedures: Preparing an Age Analysis

The process of classifying and reviewing past-due accounts by age from the first date of billing List all patients’ account balances and when the charges

originated

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

Click for SampleAge Analysis


17-28

Collection Procedures: Laws of Debt Collection

Fair Debt Collection Practices Act of 1977 Prevents threats to take action that is illegal or that you do

not intend to take Eliminates abusive, deceptive, or unfair practices 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


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Collection Procedures: Laws of Debt Collection (cont.)

Telephone Consumer Protection Act of 1991 Protects against unwanted telephone

solicitations (telemarketing) Prohibits

Automated dialing device for calls to patients

Prerecorded calls to homes without prior permission

Unsolicited advertising via fax machine

Most provisions do not apply to medical practices


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Appropriate to assess finances charges or late charges on past-due accounts if the patient is notified in advance

Must adhere to federal and state guidelines that govern these charges

The physician should use compassion and discretion when assigning charges in hardship cases

Collection Procedures: Observing Professional Guidelines


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Collection Procedures (cont.)

Using outside collection agencies Management of the account

Avoid collection agencies that use harsh or harassing collection practices

Provide agency with needed information only

Do not send bills to or contact patient; refer patient to collection agency


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Collection Procedures (cont.)

Insuring accounts receivable

Protects the practice from lost income due to non-payment

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


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ANSWER: The statute of limitations, Fair Debt Collection Practices Act of 1977, and Telephone Consumer Protection Act of 1991 guide the attempt to collect this debt.

Mr. Jansen has not paid his bill for an office visit three months ago. What will guide your attempt to collect this debt?

Correct!


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Credit Arrangements

Extending credit Time to pay for services provided on trust

when patient is unable to pay immediately

Performing a credit check Must have current information

Patient’s address Telephone number SSN Employer’s contact information


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Credit Arrangements (cont.)

Employment verification Call to verify

Credit bureau reports Credit bureau – A company

that provides information about the credit worthiness of a person seeking credit


17-36

Credit Arrangements: Laws Governing Credit

Equal Credit Opportunity Act May not deny credit based on patient’s sex, race,

religion, national origin, martial status, or age Patient has right to know why credit was denied

Truth in Lending Act Covers credit agreements that involve more than four

payments Must sign, discuss, and retain copies of a disclosure

statement – a written description of the agreed terms of payment


17-37

Credit Arrangements: Extending Credit

Unilateral decision Physician decides that patient will be billed for

full amount each month Patient makes whatever payment possible each

month

Mutual (bilateral) agreement Between patient and physician If no finance charges and if number of payments

four or less, not subject to Truth in Lending Act


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What two places will the medical assistant contact when performing a credit check?

ANSWER: When performing a credit check, the medical assistant will need to contact the patient’s employer to verify employment and the credit bureau to obtain information about the creditworthiness of the patient seeking credit.

Very Good!


17-39

Common Collection Problems

Hardship cases Patients may be poor, uninsured, or

underinsured

Patient relocation and address changes Do not to discuss a debt with

anyone except the person responsible for the charge

May ask for forwarding address only


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What are common reasons for difficulty collecting a medical bill?

ANSWER: A patient may be unable to pay the bill because of economic circumstances (poor, uninsured, underinsured, elderly and on limited income) or the patient moved and did not receive the invoice or provide a forwarding address.

Right!


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Obtain payments by cash, check, or credit cards at the time medical services are provided

In Summary

Medical Assistant

Assign the fee for these services and collect payment

Prepare and send invoices

If no payment

Act as physician’s collection agent:

Telephone calls

Collection letters

Collection agency


17-42

End of Chapter

Remember that credit is money.

~ Benjamin Franklin

© 2009 the mcgraw-hill companies, inc. all rights reserved 17-1 patient billing and collections...

Documents

payment slide

mcgrawhill companies

thompson slide

procedure slide

available income slide

request payment

common services

comparable doctors