Know the advantages of working with a third party healthcare debt collection agency

Patients who either refuse to pay their medical costs or simply forget to do so are a common occurrence for medical professionals. While this is a problem that affects many businesses, medical clinics specifically struggle with unpaid bills. First of all, it is challenging to retrieve already-provided services. Second, unless the patient has a history of being unresponsive, it might be a good idea to keep them as a client. Could working together with a healthcare debt collection agency be the best way for your clinic to deal with overdue bills?

Know in detail:

Third-Party Healthcare Collections vs. First-Party Collections:

First-party collections are efforts by doctors or a member of their staff to obtain money from patients. Third-party collections are the process of using a third party to collect the money.

The trade association for third-party collection firms in the US is called the Association of Credit and Collection Professionals (ACA). The Consumer Financial Protection Bureau (CFPB) is the principal organization in charge of overseeing third-party collections. On a federal level, the CFPB regulates debt collectors, but individual states also have their own laws. Although some states follow federal laws, others go above and beyond.

The two main federal statutes that the CFPB uses to control collection practices are the Fair Debt Collections Act and the Consumers Protect Act. Despite being allowed to utilize an autodialer, these regulations forbid collection agencies from automatically calling consumers on their cell phones.

The CFPB does not currently pay for medical debt. Some senators argue that if medical debt showed on a credit report, it would probably impact the person's ability to get credit or a loan. The CFPB supervises credit reporting.

How Third-Party Collections Work?

Third party collection agency are typically paid in the form of commissions, which are deducted from the money they bring in. Rates are frequently privately negotiated in the field of physician collections and can range from 10 to 25 percent or more, depending on the size, nature, and simplicity of the debt.

The phrase "negotiated" is essential. The doctor should be open to negotiating a price rather than accepting the amount that the collection agency offers. The negotiated rate will typically be based on the time frame of the outstanding loan. A commission, for instance, would be lower for a debt that was 60 days overdue than one that was 120 days overdue or greater. If it is difficult to collect the money because it involves more work on the part of the medical debt collection firm, the percentage the doctor will pay will rise.

Because medicine is so individualized, doctors frequently have a say in how a healthcare debt collection agency goes about getting their money back. These typically start with letters and end with calls.

After a predetermined time period—usually when the physician receives their initial payment statement—a collection agency will normally begin the collections process. One tactic is alternation. For instance, one collection agency alternates between sending three letters and making two phone calls, as follows: letter, phone call, letter, phone call, letter. This tactic makes it more pressing to make the doctor's office payment.

One collection agency tactic is to operate under the name of the doctor's office in order to prevent the patient from realizing that the debt has been given to a debt collection agency. More so than if their doctor submitted their accounts to a third-party collection agency, patients are less likely to be aggrieved if they just forgot or experienced a momentary issue that prevented payment.

The potential for medical collection companies to offer services under their own names increases the necessity. Once more, they alternate between letters and phone calls. Doctors can choose to send a note or email to patients who pay, saying, "I appreciate your money." Please call if you require our services. The doctor might add further observations. We appreciate you choosing us to be your healthcare provider.

This illustrates the need for the collection agency to comprehend the importance of doctor-patient interactions. Collection agencies shouldn't harm a doctor's reputation because they have one to uphold and defend. The doctor-patient relationship is vital to the reputation of the brand and must be safeguarded.

Representation and Respect

Always keep in mind that the healthcare collection agency you select to engage with represents both you and your medical practice. Each collection agency is distinct. The way that the collecting agency does business and presents itself must be comfortable for the doctor. Do they show respect to the patients? Do they act honestly and straightforwardly? They are on time. What kind of customer service do they offer?

It's crucial for doctors to maintain good patient interactions. You need to stay away from a collection agency that aggravates them.

Find out if your peers are satisfied with the service by consulting them for recommendations on choosing a collection agency.

● Is the service effective?

● Can you negotiate with them?

● Does the agency represent your practice in a way that is appropriate?

The terminology surrounding medical debt has become more complex than ever as a result of the switch from ICD-9 to ICD-10. You should look for a medical debt collection company that concentrates on medical practices rather than just medication. Collection companies handle hospital debts differently than debts from medical practices. In part, because they see a lot of patients generally, hospitals are typically highly active in collecting debt. Private practice physicians, on the other hand, might be more flexible.

Offer Workarounds

Doctors frequently seek to avoid the need for a collection agency. Of course, a lot of small payments that accumulate over time go unrecognized and can amount to a lot, but it's important to assess the backlog of claims and identify those that are truly collectible. When a debt is unfair, made in error, or is so minor as not to be worth the trouble, it may seem reasonable to write it off.

Your finances, however, may suffer if you consistently miss payments. Consider negotiating a price with the patient. Call the patient and suggest a payment schedule. Find out how much they can afford. It is a tactic to keep patients involved with the clinic until it is obvious that they are deadbeat and has no intention of paying their bills.

Examine your front-office practices as well. Take into account acquiring the patient's credit card so you can charge them straight after the insurance provider has paid. After that, give the patient a receipt attesting to the debit of their card in accordance with their insurance coverage.

The office should completely gather all necessary financial data from a patient, including their demographics and insurance information. Inform the patient of their financial obligations before they leave your office by explaining the insurance deductible and co-pay amounts. Be diligent in collecting as much of the debt upfront as you can to avoid having to search for unpaid bills later.

As much as you can, learn the reason why the patients aren't willing to pay. Are they employed? Concerned with their insurance plan? Or are they unhappy with the care they received?

This last issue can be difficult, but it emphasizes how important it is to understand the patient's nonpayment. If, for any reason, the patient is genuinely unhappy with the level of care, and you send the patient's bill to a healthcare debt collection agency, you may be increasing your risk of a lawsuit.

Being cautious while deciding which bills to pursue is a good idea. Additionally, feel assured that you gave the patients the best care while still receiving compensation. Therefore when you decide to hire a collections agency, ensure you hire the best one to avoid lawsuits and alone recover patient dues on time.