What All Practices Should Know About Collections Compliance

By Maurice Monroe, ONLINE Information Services, Inc.

2016 NCMGMA Alliance sponsor feature article from ONLINE Information Services, Inc.

Meeting New Compliance Requirements and Addressing Bad Debt Effectively

Over the last few years, medical providers have been faced with a number of challenges, most notably increased compliance requirements and declining revenues and budgets, in some cases. Many organizations have seen their write-offs soar during the economic recession while being asked to do more with fewer resources. Fortunately, with a little knowledge, the proper tools, and adherence to best practices, you can overcome these challenges without straining your budget or adding staff. In the following article, ONLINE Collections, the leading provider of bad-debt recovery tools for the Medical Industry, discusses what your organization should be doing to meet your compliance responsibilities and offers some tips on how you can control your write-offs effectively.

Recent Compliance and Policy Changes – Red Flags Rule, Dodd-Frank, SSN Randomization

Red Flag Rules
In response to the growing concern over identity theft, the federal government amended the Fair Credit and Reporting Act (FCRA) to require creditors to develop and implement an Identity Theft Prevention Program by December 31, 2010. This regulation, referred to as the Red Flags Rule, requires all organizations that extend credit to consumers, including medical service providers, to create and implement programs to identify, mitigate, and prevent identity theft. Although the final ruling from the Federal Trade Commission (FTC) offers some vague language regarding implementation of the program, for most providers, this means verifying patient identity during the registration process and periodically screening existing patients for Red Flags over the life of the relationship. In short, you must be reasonably sure that the person you a providing care to is who he or she says. Regardless of whether your organization created its own program or utilizes a third-party solution, the program should be board-approved and included in your organization’s policies and procedures.

Dodd-Frank
The financial crisis that began in 2008 and marked the beginning of the current economic recession prompted US lawmakers to introduce several initiatives aimed at reducing the instability of our financial system. This culminated in the passing of The Dodd-Frank Wall Street Reform and Consumer Protection Act. Although many of its provisions focus on the financial system as a whole, the Act also introduced measures to protect and educate consumers that directly impact medical providers. Chief among these are the new requirements regarding Risk-Based Pricing and Score Disclosures which went into effect on January 1, 2011.

Social Security Number (SSN) Randomization
Although not regulatory in nature, SSN Randomization will have a dramatic impact on patient screening and identity verification for utilities in the future. On June 25, 2011, the Social Security Administration (SSA) implemented this new SSN assignment method to help protect the integrity of the SSN and prevent Identity Theft. Prior to June 25, 2011, newly issued SSN numbers were divided into three distinct sections, consisting of the Area, Group, and Serial Numbers. From this information, it can be determined if a specific SSN assigned before June 25, 2011 has been issued. With SSN Randomization, the significance of the first five digits is eliminated, resulting in a completely random nine-digit number. Determining if a SSN has been issued and the state a SSN was assigned in will not be possible for SSNs issued after June 25, 2011. Only those SSNs that consist of sequential numbers (123456789) or those beginning with 000, 666, and 900-999 can be identified as invalid/non-issued under this new assignment method. This means that more stringent SSN screening methods will be required to accurately verify patient identity.

Tips for Addressing Bad Debt Effectively

In addition to these compliance challenges, many providers have seen a dramatic increase in their write-offs over the past few years. While writing off delinquent accounts has traditionally been viewed as “just a part of doing business,” many healthcare providers now realize that they have to do a better job of managing their bad debt in order to be successful. The difficulty in achieving this is that most providers don’t do enough during the registration process to mitigate risk and lack the knowledge and resources to effectively recover delinquent accounts that have entered the collections process. The good news is that by following a few simple best practices you can help your organization significantly reduce its bad debt.

The best way to eliminate bad debt is to prevent it before it starts, with your best chance of doing so occurring during the registration process. This is your opportunity to record good information on the patient (SSN, full name, phone number, previous address), which makes your Red Flag compliance easier and increases the likelihood of recovering the account if it becomes delinquent.

If an account does become delinquent, the quality of the information you gathered during the registration process and subsequent patient visits will largely determine how successful collection efforts will be, regardless of whether you pursue the debt yourself or use a third-party agency. By validating the patient’s identity and collecting comprehensive demographic information, you arm your staff or agency with the resources that can help in recovering your bad debt quickly and efficiently. When using a third-party, it is also important to submit delinquent account information as quickly as possible and be responsive to requests for information from your agency.

As one of the largest medical collections agency in North Carolina, ONLINE knows that nothing frustrates a collection agency more than not being able to recover an account because it has aged out or because the creditor fails to respond to a request for information, giving the agency no choice but to remove the debt from the customer’s file. Even with the advantage of our Exchange data, which allows us to locate debtors faster than traditional agencies to recover more for clients, we still rely on timely information from and open communication with our clients in order to be successful.

Established in 1956 as a credit bureau and collections agency, ONLINE Information Services, Inc. is currently the nation’s leading developer of risk management and debt recovery solutions for the Healthcare, Property Management, Utility, and Mortgage industries. ONLINE currently services Healthcare Providers throughout North Carolina and the nation.  Maurice Monroe, the author, has been with the ONLINE for thirteen years and works with over 400 Healthcare Providers nationwide. For more information, visit the website at http://www.ONLINEcollections.com or contact ONLINE Sales at (866) 630-6400 or maurice@onlineis.com.

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