Is your collections agency reflecting poorly on you?

Keep in mind that for public relations (PR) purposes, and in some cases for legal purposes, a collections firm is an extension of your program, says Scott Becker, CPA, JD, co-chair of the Health Care Department at the Chicago-based law firm McGuireWoods. "Thus, if the collections firm acts in an overly aggressive manner, the provider can be liable or at least the recipient of bad PR," he warns.

To ensure your collections agency doesn’t create a poor image of your facility, take the following steps:

  • Review the billing rates.

Becker suggests you ask these questions: What are the rates charged to those without coverage? Would they be embarrassing if they show up on the front page of the local newspaper?

  • Determine if you are being aggressive enough in offering relief or lower rates when a patient is poor or has financial challenges.
  • Review reports concerning complaints from patients.

Collection practices should not create fear and anxiety for patients, says Carmela Coyle, senior vice president for policy at the Chicago-based American Hospital Association. "When patients incur medical debt, it’s not the same as credit card debt or car debt," she says. "These are unexpected expenses."

Because outpatient surgery is often elective, it shouldn’t be necessary to place liens on homes because bills go uncollected, says Ann S. Deters, MBA, CPA, CEO and founder of SevenD & Associates, an Effingham, IL-based consulting and management company affiliated with 17 surgery centers.

"If you take care of these things upfront, if you understand where the patient is, and you communicate upfront, you shouldn’t have to revert to those things if the patient is honest and truly trying to pay for the procedure," Deters says.

  • Ensure collection practices comply with state and federal law.
  • Consider a sample audit of your collections firm.

Examine 10 to 20 claims that have gone through your collections agency, Becker suggests. Determine the exact process that occurred from the time the bill was delivered to the collection agency, including how the agency tried to collect from the patient, he says.

"Understand how the process will work and whether at the end of the day, you’d be comfortable with the process, if exposed to plaintiff’s lawyers or newspapers," Becker adds.

[For more information, contact Scott Becker at McGuireWoods, 77 W. Wacker Drive, Suite 4100, Chicago, IL 60601. Phone: (312) 750-6016. Fax: (312) 920-6135. E-mail: sbecker@mcguirewoods.com.]