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Update collections policies in 2005

Rehab Regs, February 1, 2005

Don't let copays and deductibles fall through the cracks

If one of your New Year's resolutions is to become a financial dynamo at your rehab facility, updating your collections policies is a good place to start. Doing so will not only increase your bottom line, but it will also keep the feds off your back.

Proper collections procedures require adequate communication between you, your patients, and your payers. You need to understand what services Medicare or a third-party payer will cover, and your patients must understand what amount they will be responsible for paying.

"The process has become so complex for providers that you can only imagine how confusing it is for some patients," says Lynn Steffes, PT, president of Steffes & Associates, a consulting firm in New Berlin, WI.

The most important steps to creating an effective collections policy is to have it in writing and to make sure your facility's staff comply with it, says Tessa Chenaille, CHC, president and chief executive officer of Chenaille Compliance Consulting, LLC, in Medford, MA. It may seem elementary, but master those two steps and you're well on your way to a rosy financial future.

The following are some components of a successful collections policy. Compare them to the policy you already have in place, or use them to help you create a new one for your facility:

"Don't use it as a threat if you don't intend to turn the balance over to a collections agent," says Chenaille. "If you say you're going to do it, make sure you actually do."

To establish these specific guidelines, your facility must determine how much information it has the time and the staff to collect. For example, to establish indigency using federal guidelines, you must request tax returns from patients.

Visit http://aspe.hhs.gov/poverty/04poverty.shtml to view the federal poverty guidelines.

To make collections a less painful process at your facility, Steffes offers the following helpful hints:

During payment discussions, let patients know that the copays and deductibles are a requirement from their insurance company, not from your office. For example, rather than saying, "You owe us a $20 copay per visit," say, "We called your insurance carrier and they stated that your liability is $20 per visit."

Throughout the patient/provider relationship, clearly explain the different roles played by the rehab facility and the payer. "PTs by nature try to rescue patients from the process," says Steffes.

"Let patients know you will act as their advocate, but the contract is between them and their insurance company."

Only send statements when patients owe money, and circle that amount. Finally, mail it in a hand-addressed envelope, which recipients are more likely to open, says Steffes.

Even if you're already on top of your collections policy, review it every year to ensure that it still meets your facility's needs. Update it as necessary, and review it annually to sign off on it, even if nothing has changed, says Chenaille.

Your policy should contain some general regulations, which your state association may be able to help you compile. These policies may also be found as part of your compliance plan. They should include some general billing guidelines, such as not upcoding, collecting reimbursement only for services that were reasonable and necessary, and only billing for services that were performed, says Chenaille.

Your facility should then specify further who is authorized to waive copays. Chenaille suggests having one high-level employee responsible for reviewing and approving the waiver of copays and deductibles.

For more information, Steffes suggests going to www.patientfriendlybilling.org, organized by the nonprofit Patient Friendly Billing Project, which is designed to help providers create easy-to-use billing procedures.

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