HOSPITAL COLLECTIONS DEPARTMENT
There are usually two divisions to this department. One is the insurance collections personnel and the other is patient collections. They are usually divided as each job requires different skill sets. The first requires the accounts receivable person to be on the phone with insurance companies all day asking for claims follow-up information. The second accounts receivable person is required to talk to patients on the phone all day and in some cases answer emails from patients.
Insurance Follow-Up - Means just that: to call insurance companies and follow-up with the status of claims for the patients with that insurance. Much of their job is automated with electronic follow-up lists. Each morning a call sheet is generated for the insurance collection person based on the outstanding days since the claim was billed. A truly good system will only have those claims that are a certain days old since the electronic bill went to the insurance company. So, it is essential that the billing and collection systems be tied together. Accounts Receivable Days is based on the number of days it takes the claim to pay after the bill is sent. Most Accounts Receivable Departments live or die by this number so the lower the better.
Once the claim is verified as received then the insurance company should give a disposition of the claim based on their own system edits. Some claims will naturally take longer than others but a true "CLEAN CLAIM" should process within the contracted time without any follow-up needed. The Insurance Follow-up persons job is to call about the exceptions. Depending on their conversation with the insurance company person they will either pend the claim for a certain amount of days for additional follow-up, refer the claim for edit and rebilling, contact the patient for any needed information to process the claim, or mark it as being paid within a certain time frame. Once these events are taken care of then the claim will either pay (therefore drop off the call list) or have to be followed up again.
If the claim has already paid the balance, if any, should be the responsibility of the patient. In some cases if the balance doesn't look right, is a credit (negative balance) or if you know that the insurance company is contracted with your facility and there is no adjustment then you will need to refer the account over to the department that does the adjustments. Most contractual adjustments are done automatically by the computer based on insurance company payment rates. If your medical facility doesn't do that or only does it for certain insurance companies then your will have to have the balance adjusted. The patient is only responsible for the contracted balance or copays set forth by their insurance companies.
A little note about insurance follow-up! If your computer system doesn't have a good way to make notes on each claim then you need another one. If it does then you should ALWAYS note the dated and time, the person you spoke to, the phone number you called and briefly note what was said.
Before the advent of sophisticated billing systems the Insurance Follow-up person had to print a report of outstanding claims, pull the files, (which hopefully had the printed, signed and dated bill in the chart), and call the insurance companies then make notes on the chart of the follow-up. Hopefully, your medical system has been automated to the point where that is no longer necessary.
PATIENT ACCOUNT BALANCE FOLLOW-UP: Assuming that your patient did not pay his or her copay on admission or the balance is a co-insurance amount due after the insurance company has processed their portion and your facility has adjusted the agreed upon amount Now is the time to contact the patient for payment arrangements. Some medical facilities will turn over balances on accounts to patient due even if the insurance company hasn't paid yet. Mostly, these are commercial insurances that haven't paid within the allotted 30 to 60 days or contracted insurances that haven't paid within their contracted time. The patient is ultimately responsible for their bill and to follow-up with insurance companies when the bill is paid in a timely manner.
Most Medical Facilities tell their patients up-front that billing the insurance company for them is a courtesy and in most cases that is true but be aware that there are federal mandates in place that state that ALL medical facilities are required to bill Medicare (doen't require participation) for the patient. It is in the best interest of the medical facility to bill the insurance company for the patient to make sure that it is done, is done in a timely manner and is done correctly. There are very few patients that can or will pay a medical bill in full without insurance.
Now, as to the medical facilities contracts, when the facility has signed a contract with an insurance company there are certain rules spelled out for both the insurance company and the medical facility. Number One rule is for HMO's. When the medical facility has a contract with an HMO you have agreed to accept payment in full from the HMO and the patient ONLY owes copays! If the balance on the account is not a copay then you must have documentation from the HMO that the balance is the patient's or you will need to send the claim for either adjustment or follow-up by the insurance follow-up person. Sometimes, the account must go into an "administrative hold" to prevent it from going into collections status.
Number 2 rule is for Medicaid. Even though your medical facility may not participate with the state Medicaid insurance program you have to be careful with these accounts as most qualify for charity write-off and every medical facility must have a certain amount of charity write-offs each year to qualify for some federal funding. If you do participate then the balance is never owed by the patient. There are some rare cased where Medicaid will have a patient copay of $3.00 since this falls below the $10 threshold established for write off by most medical facilities the balance is usually written off by the system. Otherwise your medical facility should have a policy in effect on dealing with Medicaid patients.
Number 3 rule is for accounts with a contractual adjustment. If in the notes it has been determined that the insurance company you have a contract with has denied the hospital bill and states that they balance is the patient's then you must have the contractual adjustment reversed so that the true balance of the claim is reflected on the patient's bill. Each facility has it own rules about when and if a contractual adjustment can or will be reversed to tell the patient the entire balance due and then if they get they insurance to pay the bill anyway the adjustment can always be put back on later.
Lastly, before turning an account over to collections please make sure that all of your efforts to get payment or make arrangements have been documented and the remaining balances are true to the best of your knowledge. IT is not to your advantage to quickly turn any account over to collections just as it is not to your advantage to hold onto an account for too long. There are numerous regulations regarding bad debt accounts and the medical facilities ability to get future payments, federal grants and bad-debt write-off allowances.
REMEMBER, to always be courteous with your patients and work with them if you can. Future referrals to your medical facility are often based on ALL of the accounts receivable personnel who have dealt with the patients as well as the medical personnel!