“Collecting Medical Debt—How Aggressive Should You Be?” is consistently one of the top 3 blog posts on NL Insider, even though it was published almost 2 years ago. Because many of our readers have such an interest in matters relating to collecting medical debt, last week (1/17/14) we reprinted the HFMA/ACA press release regarding “new best practices for medical debt collection.” The intent of this follow-up is to briefly summarize some of the content in the report that is most relevant to the debt collection industry. We recommend that you read the entire report, “Best Practices for Resolution of Medical Accounts,” and adhere to the guidelines that are applicable to your business.
The Healthcare Financial Management Association (HFMA) and ACA International spent almost a year developing the guidelines, a concise list of best practices for managing patient accounts from the time a statement is sent to a patient to when the account is closed. All recommendations in this report are designed to be used in conjunction with applicable state and federal laws.
The report states that “The primary audiences for this work include healthcare providers, business affiliates, and credit bureaus. For purposes of this document, business affiliates are defined as organizations that contract with healthcare providers to work directly with patients on behalf of healthcare providers to resolve outstanding medical accounts. Examples include, but are not limited to, accounts receivable management companies, collection agencies, and debt buyers.” The secondary audiences for the report include providers and patients. “For the best practices to be effective, all parties must collaborate, including the patient.”
Five of the topics covered, in which debt collection professionals perhaps will be most interested, include:
Assignment of accounts
Assigning accounts to “business affiliates” does not imply delinquency. It relates to what one might call “early out” or “pre-collection,” where the provider has chosen to outsource some or all of its open accounts as an extension of the patient accounting department.
When using a “business affiliate” for collecting an account, delinquent or not, frequent account reconciliation ensures that multiple efforts to collect are not being made simultaneously and patients are not receiving duplicate contacts.
“Business affiliates” must have access to all necessary information to assist the patient in resolving the account. If the account reaches secondary placement, access to the account information must be available through the primary affiliate and the provider in order to resolve the account in a patient-friendly manner.
Extraordinary collection actions
Extraordinary collection actions (ECAs), defined by the IRS as liens, credit reporting, lawsuits, wage garnishments, or sale of debt, should be pursued only after reasonable efforts to resolve a patient’s account have failed. Patients should be given at least one written, 30-day notice that ECAs may be initiated. The task force does not endorse any specific strategies, but stresses the importance of compliance with provider policies and state and federal regulations.
Requirements for debt buyers
If providers decide to sell outstanding accounts, they should require that the debt buyer (a) abide by ACA International’s Health Care Collection, Servicing and Debt Purchasing Practices Statement of Principles and Guidelines, (b) adhere to ACA’s International’s Code of Ethics, and (c) be licensed as a debt buyer where required by state law.
A recent article on insidepatientfinance.com also summarizes some of the guidelines more relevant to providers and patients. Of course, the most comprehensive resource is the report, itself, “Best Practices for Resolution of Medical Accounts.” We welcome your comments on how you see these guidelines affecting the debt collection and the medical industries.
By Marti Lythgoe, NL Editor
Categories: Business Relationships, Compliance, Debt Collection, NL Insider
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