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For urgent care clinics and healthcare providers in general, a backlog in accounts receivable (AR) isn’t unusual. According to a recent report by Urban Institute, one in four nonelderly adults in America have past-due medical bills.
It’s no surprise that collecting unpaid debt is a burden that has to be carried by someone. Depending on the payment plans you offer and the demographic makeup of your patient base, you may be able to delegate the job to someone in house. But because many clinics run with a very lean staff, hiring a collection agency may be the most efficient and effective way to clean up your AR.
Making the choice to hire an agency is the first step. Choosing the right agency is the more difficult second step. The collection agency you choose will be a reflection on your clinic. A thorough vetting process that includes asking a lot of questions, checking references, and reaching a mutually beneficial payment agreement is essential to a successful partnership.
Ask these nine questions before hiring a collection agency:
The American Collectors Association International (ACA—not to be confused with the Affordable Care Act) also offers certification through membership and course completion based on adherence to high collection industry standards.
Accreditation generally indicates:
· Substantial engagement in commercial debt collection
· Minimum number of years in business
· Annual education requirements
· Separate trust account for client funds
· A surety bond to protect client funds
· On-site inspections
While there are no guarantees that collectors will adhere to high collections standards, these certifications and designations are widely recognized in the collections industry and are an indication that an agency is reputable.
If your collection agency doesn’t carry insurance, it’s a red flag. With no restitution available from your collection agency, it’s more likely that you could be named in a lawsuit.
To find agencies that specialize in urgent care or healthcare, consult with people in your professional network including other providers, and your lawyer or accountant. And ask for referrals.
In some cases, an agency will agree to charge a flat fee per account regardless of the amount of debt. For small clinics, this may be a good option.
Remember, when you hire a collection agency, it represents you. The way collectors treat your patients is a reflection of you. Be sure they have a clean record when it comes to compliance with the industry’s ethical trade practices.
One of the complexities of collecting debt for medical treatment stems from the lack of transparency inherent in healthcare. Consumers (and care providers) rarely know the cost beforehand because treatment can’t be identified until a diagnosis is made. And even if a treatment is known in advance, the provider’s price and billing reflects which insurer covers the patient. So many questions must be answered before cost can be determined. In many cases, insured patients have no idea what portion of their bill is their responsibility.
Doing your part to identify patient responsibility up front, and collecting as much of the bill as possible at the time of the visit will help to prevent non-payment and reduce the need to turn to a collection agency.
With the recent increase in patient financial responsibility due to high-deductible insurance plans, many urgent cares require a patient credit card on file and preauthorization that allows the clinic to charge the card for the balance after insurance processing. For large balances, patients may be notified by a clinic courtesy call before the credit card is processed.
If you feel you’re doing everything possible to collect from your patients without the results you want, a collection agency can be the best way to recover funds owed to you. The side benefit is the time and money you don’t spend trying to collect on unpaid medical bills.