Funding Focus

Collecting Private Pay Accounts

• By Kelly Riley
• Mar 01, 2007

The Centers for Medicare & Medicaid Services’ (CMS) final rule, mandating transfer of title of all oxygen equipment to the beneficiary at the end of 36 months (or possibly 13 months if Congress approves the president’s budget), should cause providers to pause and rethink their current process for collecting the patient financial portion. Comments in the final rule, in fact, state that patient costs contributed to the development of the equations used to calculate the formulas for payment methodology. CMS has clearly established that the provider has a reasonable expectation to be paid.

An excerpt taken directly from the fact sheet, published by CMS on Nov. 1, 2006, reads: Under the payment methodology in effect before the DRA, Medicare made continuous monthly payments for those beneficiaries who use oxygen equipment as long as it was medically necessary. Beneficiaries were responsible for a 20-percent co-insurance of Medicare’s payment on the rental of the equipment. As a result, a beneficiary’s coinsurance payment would often exceed the purchase price of the oxygen equipment without the beneficiary acquiring title to the equipment.

Here are some guidelines, from a collection professional, to successfully collect debt from clients.

1. TRAIN YOUR CLIENT TO PAY
If you make it clear from your initial contact exactly what your expectations are and what the consequences of not receiving payment will be (potential cancellation of lease agreement, etc.), then you are telling your clients that you expect timely payment as services and/or products are provided. By contrast, every time you allow a client to avoid paying, you are validating the assumption that you can be last in line (or not in line at all) for getting paid.

2. BE PROACTIVE IN COLLECTION EFFORTS
Commonly, when asking for emergency contact information, we accept the name of a spouse or family member in the home. Instead, it’s better to ask for an emergency contact person outside the home because when the client moves, you still have a chance of finding him/her and your equipment.

Establish that the client is responsible for all costs associated with collecting the debt owed. Generally, if your delivery ticket clearly states that the client is responsible for the cost of debt recovery, collection costs can be passed to the client. For example, if your client owes you $100, and an outside collection agency charges you 35 percent of the debt as the fee, the patient is now responsible for $135. Therefore, collecting the debt costs your company much less, as the client is burdened with the responsibility for his/her actions. Many clients in this industry are living on a fixed income. There will be greater chances of collecting the debt if it is a debt they can afford. By waiting until payment has been received by the primary insurance before billing the secondary portion, clients often are hit with several months of co-pays at one time. While a bill of $40 might seem manageable, getting a bill for more than $100 often can be overwhelming. Changing your billing system to invoice the patient for at least the estimated co-pay can help your client, and your accounts receivable, at the same time!

3. HOW TO PURSUE COLLECTIONS IN-HOUSE
One of the most valuable skills your collection staff can learn is to ask probing questions in a way that gets answers without causing the client to become defensive. For example, instead of calling and saying “Hello, I’m Jane Doe from HME Company,” open the conversation with, “Hi! I’m Jane. I’m trying to reach Mary. Do you have her new number? No? Well, do you know where she is working? It’s been a while since I’ve talked to her. Do you have her new address?” Don’t be firm and formal. Aim for warm and chatty, as if you’re an old buddy. But do not divulge the reason you are calling. The message should only convey a desire to reach the client and for the client to return the call.

With every contact, staff should convey an attitude of helpfulness. By helping the client maintain a good credit history, the staff provides a valuable service. Collection staff should maintain a positive attitude regarding the results of their call so that the payment will be collected and/or arrangements will be made. With this attitude, the staff usually will achieve success.

The solvency and continued viability of your company depends upon not only collecting funds, but collecting them in timely manner.

This article originally appeared in the Respiratory Management March/April 2007 issue of HME Business.