Billing and Collections in Healthcare - Case Study Example

Lecturer: Billing and Collections in Healthcare Finkler, Ward and Calabrese (18) argue that at the time when the healthcare organizations are faced with unprecedented financial challenges, having an understanding of financial accounting is vital for health care practitioners, particularly those managing the department and budget. Handling of billing and collections squarely falls within their professional mandate. Some of the things to be performed by a healthcare practice to increase its financial success include, although are not limited to the following: introducing a written credit policy; discussing payment and practice policies in advance with the patients; billing promptly; planning an action for bills more than 30 days old; calling or sending letters after the second statement; and finally, utilizing the services of small claims act (Bell p.45). Billing and collections in health care is very crucial facet that will ensure that the medical facility does not run into losses. Today’s medical care providers rely on medical billing collections in order to keep patient and profitable practices. This because healthcare is taken as a very serious business and the physicians need to be on the look out if they are to remain afloat in this business. Faced with high cost healthcare malpractice insurance, office leases, expensive pharmaceuticals, lagging medical insurance, qualified clinical and administrative personnel, the 21st century medics require professional assistance to collect payments for the services provided (Walshe and Smith 28-30). The US healthcare providers need to ensure that they adhere to best practice guidelines when it comes to billing and payment. The Department of Health and Human Services released a report in 2011 indicating that $49 billion of medical debt is accumulated annually by the uninsured hospital patients. Due to the Affordable Act, by 2014 almost 20 million newly insured patients will enter the healthcare system. As a result, there would a greater onus on practices and hospitals to collect their balances outside the clinics (Walshe and Smith 57-58). To effectively address these situation healthcare providers can manage their billing and collection processes through the following: First, coming up with multiple payment options such as payments through an online web portal that accepts debit or credit cards, which ensures fast payment and removes the worry of safeguarding patient data. Patients can also utilize mobile phones for reminder messages and to pay bills. Secondly, encouraging advance payment through pre-funded accounts permits them to effectively plan for the payment. Thirdly, is keeping the costs of billing low by embracing paperless mode of billing and payments. Lastly, patent driven healthcare where the healthcare facility needs to ensure the security of their financial information. By having a secured online portal that protects patient’s financial data makes it easier and faster for healthcare provider to process payment (Phelps). According to (Beik 314) argues that a well run medical billing and collection services can significantly assist healthcare practice to run more effectively and efficiently by means of eliminating staffing issues, undisciplined medical billing and collection processes, outdated systems of medical billing, and archaic reporting tools which lead to poor collection ratios. Billing services can carry out numerous functions of the medical care practice including: preparation and submission of insurance claims; provision of data entry in relation to patient demographics, charges, insurance information, payments, and adjustments; tracking of payments that have been made by patients and third party payers; production of practice management reports; and collection of delinquent accounts (Bell 36). Some providers of health care outsource their medical billing services by hiring a separate entity in professional medical billing services. Billing service entities offer comprehensive, cost-effective, and Health Insurance Portability and Accountability Act (HIPAA)-compliant medical billing solutions for the medical care professionals nationally. The medical billing services are usually organized and operated by medical billing professionals who are tasked with designing, implementing, and managing the accounts receivable portion of the medical care practice. According to Reed (58) asserts that as both the employed and the jobless are faced with difficulty in obtaining and affording health insurance, clinicians, hospitals, and the private practitioners are also experiencing the pinch. Individuals are continuously getting sick, but they do have the capability of meeting the cost of hospitalization, the prescriptions drugs, and quality preventive medical care. The programs that are funded and subsidized by the government such as Medicare and Medicad have proven to insufficient to counterbalance the expenses numerous practitioners incur just because they are simply attempting to stay in the business of keeping humans well and alive. Therefore, when patients go ahead and default on payments, medical care provider and doctors are obliged to take drastic measures to collect the money. This is where the healthcare providers seek the services of professional medical collection agencies. These are firms that are specialized in recovery of outstanding balances from uncollectible and slow-paying accounts, in conjunction with health insurance firms who may extend the compensating physicians because of paper work backlogs. A collection agency is an organization that gets or arranges for payments of cash owed to a third party, in this case a medical care office. A number of healthcare practitioners utilize these collection agencies to assist them collect delinquent accounts (Finkler, Ward and Calabrese 85-88). The collection agencies offer services to businesses that: are too small to have their own collection department, have inadequate expertise to collect delinquent accounts themselves, are of the opinion that a collection agency would get quicker results, or simply they do not want to deal with the hassle that is associated with collections. Many outsourced billing companies take responsibility and authority for collecting the amount (101). The delinquent bills usually have a negative impact on the physician’s profit margins, as well as having an adverse effect on the patient credit reports. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) does not legitimize medical collection agencies from disclosing information in relation to a patient’s treatment (Reed 58). However, these collection firms are within the law when recording delinquent account on credit reports, which is found to affect the capability of the patient to get future financial assistance. The major advantage is that the health care providers no longer have to risk losing god patient relations due to aggressive or poor collection practices. This is because the medical collection agencies are faceless and typically impartial third parties that have the qualification to tackle delicate matters such as delinquent accounts without offending long standing patients (Jaklevic 9). The recent advancements in technology has revolutionized the healthcare system through cloud computing. What the medical facilities need is the internet and the computer for them to access the network of billing services (Walshe and Smith 54). Thereafter, the medical facility can be able to retrieve up-to-the-minute information of the patient as well as practicing management reports at the time on a secured server. The presence of the internet network a healthcare office can interact with professional billing services anywhere both in the US and abroad. Most collection agents request for at least 50% of the total money collected. Bell (36) argues that delinquent bills need to be turned over for collection only when it is quite obvious that the payment by any other means is a dead issue. The decision on when to go to a collection agency is a business decision that is typically carried out within every healthcare practice. If a decision is arrived at to turn delinquent accounts over, to a collection agency, precaution should be taken when selecting the agency Walshe and Smith (65-67) point out that a legitimate collection agency must be a member of a national trade association, for instance the Consumer Data Entry Association and American Collectors Association. These aforementioned firms offer all-important training and standards. Besides checking credentials and reference, the medical care practice need make sure that the agency chosen employs certified, well trained collectors who comprehend and abide by the Fair Debt Collection Practices Act and adhere to the stipulations of the state laws, they are ensured licensed and bonded, and lastly, has the capability to collect in other states. By so doing, medical collection organisations are adept at bringing delinquent accounts current and reducing write-offs (Petaschnick 132-116). Therefore, those patients who have delinquent accounts need to contact the healthcare providers in advance before the commencement of medical billing collections. Hospitals and other healthcare providers need also to make provisions for indigent and underinsured patients in order to resolve past accounts a certain time frame (Petaschnick 65). Therefore, when patients receive demands for payment from physicians and are not able to meet these financial obligations, contacts with accounts payable representative is made immediately, with hospital’s accountants assessing the financial statement of the patient to establish if they qualify for help from the state and federal funding sources (Beik 23-28). Works Cited Beik, Janet. Health Insurance Today: A Practical Approach. New York: Elsevier Health Sciences, 2012. Bell, Clark. "Hospitals, get billing right." Modern Healthcare 36 (1999): 36. Finkler, Steven A., David M. Ward and Thad Calabrese. Accounting Fundantamentals. Burlington: Jones & Bartlett Publishers, 2011. Jaklevic, Mary Chris. "Billing confusions runs high." Healthcare Registration 30 (2013): 9. Petaschnick, Joann. Health Care Billing & Collections: Forms, Checklists & Guidelines. New Jersey: Aspen Publishers, 2013. Randy Phelps, R. 2 June 2011. Healthcare billing and collection: Best practices. 3 December 2013 . Reed, Vita. "Healcare." Orange County Business Journal 21.1 (2008): 58. Walshe, Kieran and Judith Smith. Healthcare Management. New York: McGraw Hill, 2011. Read More