Bad Debt Syndrome by Richard L. Tamburello, Managing Director

Given the unfortunate economic circumstances for millions of Americans, more and more medical practices are finding it increasingly difficult collecting deductibles and self-pay balances.  This situation is not only impacting cash flow for practices, but negatively affecting bottom lines.  According to a recent study published in the American Journal of Medicine, 2007, “Medical bills are the cause of more than 60% of all bankruptcy filings in the United States…” Many patients ask, “Why aren’t insurance plans covering more of the medical expenses”? As a result, medical practices are now dealing with the uncomfortable task of asking patients for payments after treatments and before they can be seen on the following appointments.

URS recommends the following to minimizing bad debt losses and maximizing cash flow:

1. Inform patients of payment policies prior to being treated. Office policies should include a list of accepted credit cards and a credit agreement which is to be signed by patients/guarantors who do not have insurance or high deductibles (HSA).
2. Select patients for collections using these criteria: Minimum of 3 statements and no contact from patients indicating willingness to arrange payment plans; balances > $49.99; mail is returned.
3. Contact with patients should be geared to `motivating’ patients to pay, not via intimidation tactics.
4. Patients with insurances should have their policies (including secondary insurance) validated prior to the office visit date.
5. Surgical practices need to call insurances for eligibility, authorizations based upon Diagnosis codes presented in ascending order.  This should be completed a minimum of 48 hours prior to the scheduled surgery date.

Keep in mind these are some basic procedures by which medical practices can minimize the Bad Debt Syndrome in today’s economy and in the future.

The Importance of Conducting Insurance Follow-Up by Richard L. Tamburello

Insurance follow-up is a billing function for ensuring optimal revenues, minimizing bad debts, reducing patient complaints and accelerating revenue cycles. Over the past 15 years, I have conducted numerous A/R analyses for various-sized medical practices and have found this key aspect is often overlooked. In some cases unpaid claims are re-filed without determining and correcting the cause of denial resulting in an endless cycle of rejections. When the watchful eye of the doctor or administrator is omitted from this vital task, valid charges are written off.    

How does a physician or practice manager know when denied claims are promptly addressed, corrected and re-filed?

I recommend the following method: 

•    Run a 'Total A/R Aging Report' using the parameter 'Date of Service'
•    Do not run reports showing 'Insurance Re-billing or Billing Dates'
•    Generate a 'Patient Balances A/R Report' using the same parameter 'Date of Service' 
•    Subtract Patient Balances A/R data from the 'Total A/R Report' and it will provide accurate data on unpaid insurance charges

These reports should be run twice a month and provide information as to which insurance companies and patient charges are not meeting timely adjudication.

Tell Us: How often do you conduct insurance follow-up? Is it on your top priority list? 


Questions? Contact Richard @ Rtamburello@e-urs.com 

Key Tools for Effective Collection Results by Richard Tamburello, Managing Director, URS Billing Services, LLC

All communications with responsible parties owing delinquent balances must be positive.  Never make collection or follow-up telephone calls using abusive or insulting words. The key to improving self-pay collections and maintaining a positive image for the practice or hospital practice, are first explaining to all patients the practice’s payment and collection policies; collection communications should always focus on motivating patients to pay delinquent balances, not antagonize.  Make sure that all policies are acknowledged by both guarantor and the practice.

Responding in spirited and positives tones to patient inquiries is another key element to elevating the prospects of receiving payments from patients.  Staff members need to convey to all patient inquiries the willingness and understanding of circumstances surrounding financial problems some patients might have with paying the balance.  The results can be quite positive.