Tag Archives: United States

Dispelling Collection Myths

25 May

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ACA (American Collectors Association) International seeks to dispel commonly held myths about the credit and collections industry. Today more than 30 million consumers have delinquent or defaulted accounts under collection, averaging $1,400 each.

“Repayment of consumer debt is the lifeblood of America’s credit-based system and vitally important to the national and state economies,” ACA International Chief Executive Officer Pat Morris said. “It helps ensure that affordable credit is available, goods and services remain affordable, sustains jobs and supports keeping taxes low.”

As an industry, third-party debt collectors help employ more than 300,000 people, pay nearly $2 billion in federal, state and local taxes, donate $85 million and volunteer 650,000 hours to charitable organizations in local communities. “Whether a small town hospital, business or a city struggling to recover taxpayer owed dollars, organizations large and small rely on the recovery of rightfully owed consumer debt,” Morris said.

Myth 1: Avoiding a Debt Collector Makes the Debt Go Away. Consumers who ask debt collectors to stop contact or choose not to respond to calls or letters often mistakenly believe it means their debt has been eliminated. Avoiding contact will not erase a debt. Instead, consumers should communicate with collectors to discuss the account, verify its accuracy and work on a plan for resolution. If consumers don’t owe the debt, communicating with collectors can help put a stop to calls or letters.

Myth 2: Consumers Don’t Have Rights in the Recovery of Past Due Accounts. The collection of consumer debt is one of the most heavily regulated industries in the United States. Consumers have important rights under a number of federal and state laws. For more information about what to do if contacted by a debt collector please visit http://www.askdoctordebt.org.

Myth 3: All Debt Collectors are Bad. Just as “all consumers” aren’t the same, neither are all debt collectors. Most are committed to professionalism, training and customer service. When it comes to the “bad guys,” we want to put them out of business just as consumers do. ACA International and its members continue to work with state and federal policymakers, regulators, courts and attorneys general to comply with the law and hold accountable those who do not.

Myth 4: It is Boom Time for Debt Collectors. It’s no secret that consumers have struggled financially in the current economy. Despite an increase in defaults and delinquency, the inability of consumers to repay rightfully owed debts trickles down to those charged with their recovery.

© 2012 ACA International. All Rights Reserved. Reprinted with the express written permission of ACA International

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Self-Pay Is Here To Stay: And It’s Scary

18 May

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So are you one of those who thought that health exchanges would cause self-pay to go away?  You need to think again!!  Self-pay isn’t going anywhere anytime soon. and it’s growing.

It has been projected that out of pocket expenses nationally will rise more than $400 billion by 2016.  The advent of mandated medical coverage, which is coming in 2014 will markedly increase the number of “basic” health plans with the demise of “Cadillac” plans.  Higher deductibles and lower co-pay in these basic plans will leave the patient covering up to 40% of the bill.  All of this happening with a patient population that has an increasingly difficult time covering their portion of the amounts.  Couple that with the fact that percentage of Americans who are enrolled in the increasingly popular high deductible plans hit a record 28% in 2012,  It’s getting scary!

Some things you might not know:

  • 55% of patient responsibilities are never covered.
  • 81% of “true” self-pay responsibilities are never covered.
  • It costs twice as much to collect from the patient vs. the payer
  • Between 2007 and 2012, patient responsibility grew from 12% of total revenue to 30% and isn’t slowing down.
  • Self pay is the number three payer after Medicare and Medicaid
  • Each family will be responsible for up to 32% more in financial responsibility in 2014
  • An “insured” patient doesn’t guarantee full payment.
  • ICD-10 will also potentially increase patient responsibility.

These are just a few facts that indicate our future.  A strategy or partner will be necessary to respond well to these challenges that are before us.  The view of patient out of pocket will have to change.  No more can a practice just assume that they can absorb patient balances that aren’t collected.  Balances will need to be collected and early in the cycle, as accounts receivable depreciate in collectability very quickly, more quickly than ever.  Any A/R over 90 days, depreciates at .5% per day, and practices can’t absorb the losses any more.

Most practices cannot do this on their own.  What is not collected at time of service is both challenging and expensive to work adequately in-house.  The expense associated with pursuing these well is more than the practice can handle, so the choice is clear.  You can either “do the best you can with what you’ve got” or you can find a partner who can help you do it well, and for less cost.

Make sure that anyone that you partner with is 100% committed to compliance, because federal, state and local regulations are making it more and more challenging to accomplish the task.  Ensure they protect you, as well, from liability for what they do.

Again, I realize that many who read this will deny that this is the future, and rely on the belief that more patients insured will mean less challenge for the practice in pursuing patient balances.  If you are among those, I have a bridge I’d like to sell you.

If you realize the challenge, and would like to investigate what I believe to be the best available solution to this increasing problem, respond to this article and ask and I will be happy to share it with you.

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Are You Asking The Right Questions?

9 May

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It is always important to ask questions, especially if you are not 100% certain of the subject matter you are discussing. This is even more important when selecting a company to recover your late payments and call upon people that are delinquent on their accounts. It is paramount to ensure your company of choice is expert in their field.

Today with the ever changing Federal and State regulations, it is more important now than ever to ask questions first before you have to answer for shortcuts or missteps that could result in hefty fines for lack of compliance with the letter of the law.

The next time you talk to a potential collection or debt agency be sure to have the following questions close by so you are not hit with Federal and State regulations later.

1. Is your company compliant with TCPA, HIPAA and familiar with state laws regarding compliancy?
Yes. In fact, Transworld Systems is compliant in all 50 states as well as having a Hold Harmless Statement in our agreement with clients.

2. Does your company perform background checks on collectors in required states?
Yes. We perform background checks on collectors in ALL states.

3. How are cell-phone calls handled?
Rules governing cell phones are complex and change frequently. You want a collections agency that is willing to give you a Hold Harmless Agreement.

4. What is a Hold Harmless Agreement?
Simply put, a Hold Harmless Agreement is an agreement or contract in which one party agrees to hold the other free from the responsibility for any liability or damage that might arise out of the transaction involved.

5. Do you know what PHI is?
Yes. PHI is Protected Healthcare Information. It includes any information about health status, provision of healthcare and payment for healthcare that can be linked to an individual. Be sure the company you choose ensures the security of that information.

6. Is your company licensed to collect in all states?
Yes. If you are billing regional, national or transient customers, it is important that your collections resource can legally collect in the states where your debtors reside.

Contact me for more ways to know if your collection agency will keep you protected from liability and potential penalty.

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Top 10 Tips To Improve Collections (Part 3)

8 May

It’s a problem faced by virtually every business and medical practice – how to deal with customers / patients who pay their bill late, or not at all.  While customers and patients expect prompt and professional service, they don’t always meet the same standard when it comes to paying their bill.

Accounts not paid promptly can severely impact the cash flow of a business or practice.  A clearly defined and carefully communicated, yet diplomatic payment policy, may help avoid difficult collections situations.

Tip #3

USE “ADDRESS SERVICE REQUESTED”

One of the most difficult collection problems is tracking down a customer/patient who has “skipped” — or moved without informing your business of the new address.  The U.S. Postal Service has a procedure to address this situation.  Any statement or correspondence sent from your office should have the words “ADDRESS SERVICE REQUESTED” printed or stamped on the envelope, just below your return address in the upper left hand corner.

If a statement  or invoice is sent to a customer/patient who has moved and the words “ADDRESS SERVICE REQUESTED” appear on the business’s envelope, the Post Office will research this information.  If they can locate a change of address for that person, they will send you business Form #3547 with the correct new address for a small fee.  This can help keep your address file up to date and eliminate many of your items being returned marked “Forwarding Order Expired,” and leaving you (and your A/R) in the lurch.

To receive the rest of these tips by email, follow this blog in the right hand column.

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Video

Satisfied Medical Clients

5 May

A video montage of current Transworld Systems clients filmed at the national MGMA (Medical Group Management Association) meeting.

Transworld Systems has a 14 year relationship as an “Adminiserve Partner” with the MGMA, and offers MGMA member practices special rates for their services.

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