Medical facilities, clinics, hospitals, dentists and other healthcare providers face increasing challenges in today's slow economy. These providers are experiencing substantial losses due to the rapidly escalating number of delinquent accounts. Over 47 million Americans have no health care insurance coverage at all, while those that do have coverage are often under insured.

 

Prior to accepting a patient and rendering medical service, medical providers should obtain as much information about the patient as possible. At a minimum, the patient's full name, home and work addresses and telephone numbers, home, work and cell phone numbers, email addresses, social security number, date of birth, and the name of a relative should be maintained in addition to any insurance coverage the patient may have. Should the account ever need to be sent for collection, this information will be essential to identify, locate and contact the patient.

 

Oftentimes, payment is not made simply because the patient is confused as to his/her obligations regarding deductible amounts, co-pays, insurance coverage, etc. Make it a practice to clarifyyour payment policies at the outset prior to any services being rendered, to avoid misunderstandings later and state clearly what the patient’s payment obligations are.

 

As is often the case with any debt for services rendered, past due medical bills become less important to the patient after treatment has been completed and the patient is feeling better. Other bills, such as credit cards, car payments, the mortgage, etc. may take precedence over a past due doctor bill. By creating clear and consistent policies, such as sending timely statements every 15-30 days and following up with telephone calls, you will distinguish patients who are willing to pay their bills from the "problem" patients. Patients who are communicating with your office and demonstrate a sincere desire to pay their bills despite financial hardships they may be experiencing should be handled differently from those who ignore your communications or simply refuse to make any payment arrangements at all. If a patient has not paid their medical debt, or arranged for a payment plan within ninety (90) days following their treatment, the case should be referred to a medical collection agency or law firm sooner rather than later for better recovery success. 

 

Once you have determined that the patient is not going to pay the bill voluntarily, you must determine whether to pursue collection efforts or simply “write off” the invoice. In determining whether or not to pursue collection efforts, you must consider if you wish to retain the patient as most patients will not return if their account has been placed with a collection agency or attorney. If the patient is covered by insurance, Medicaid or Medicare, make sure that the claims were properly submitted.

 

Finally, you must determine if the amount of the claim is worth sending to a collection agency or attorney. If it is, you must make sure that the services were provided within the applicable Statute of Limitations period and send copies of the invoices, supporting documentation of the dates of service and types of service rendered, and any information you have regarding the patient’s assets and employment to the collection agency or attorney.

 

 

Once a firm has decided to take the medical collection accounts, it is imperative for the client and firm to ensure that the staff is adequately trained with respect to the HIPAA laws (The Health Insurance Portability and Accountability Act). HIPPA covers any information about a patient’s past, present or future mental or physical health including information about payment for care. To be covered by HIPAA, information has to be kept by a covered entity - a health care provider, health care plan, or health care clearinghouse. This, combined with some fact that identifies you (your name, address, telephone number, Social Security number) is called "protected health information" or PHI. PHI can be oral, handwritten, or entered into a computer. This means a conversation between a doctor and nurse about your condition has the same general protections as information written on your records.

 

Debt collection is considered a payment activity under HIPAA. Health care providers may enter into a business associate agreement with a collector. The “covered entity” may disclose information required to collect the debt but must also follow the “minimum necessary standard” that applies to all disclosures under HIPAA.

 

The Minimum Necessary Standard requires that collectors make reasonable efforts to limit protected health information (PHI) to the minimum necessary to accomplish the intended purpose of the use, disclosure, or request.

 

 

The Privacy Rule under HIPPA is 45 C.F.R. 164.502(a). The Rule specifically permits a covered entity to use and disclose protected health information for the purpose of “treatment, payment and health care operations”, including the payment operations of other covered entities, without requiring prior consent of the individual.45 C.F.R. sec.164.502(a)(1),164.506(a). The Rule addresses the concept of “business associates” who act on behalf of, or provide services to, the covered providers themselves and which will involve the use or disclosure of PHI. 

 

In addition to understanding the HIPPA privacy regulations, it is helpful to understand the mechanics of Medicaid and Medicare coverage.

 

 

Medicare applies to medical providers with specific rules. For example, with regards to debts owed to Nursing Homes,Medicare will pay for 20 days of a skilled nursing care facility at full cost and the difference between the amount above $114 (2005) per day and the actual cost for another 80 days. Private Medicare supplement insurance usually pays the 80 days of $114 per day if a person carries this insurance and the right policy form. However, Medicare often stops paying before reaching the full 100 days. When Medicare stops, so does the supplement coverage.

 

Qualifying for Medicare: Medicare benefits for a nursing home will usually not click on unless you are going to an approved nursing home after a “qualified” hospital stay.  This means that the nursing home must be approved by Medicare and that the hospital stay had to be something related to the reason for the nursing home. 

 

Responsible Parties: In addition to the patient, there may be other responsible parties that a debt collector can pursue. With regard to a nursing home, a "responsible party" is a third party who has access to and can use the resident's income and assets to pay for the residents care.  A guarantor is a third party who agrees to be personally liable for the resident's liabilities. 

 

Timothy J. Murtha has been an admitted attorney for ten years as of August 2011. He attended St. Johns University and graduated law school in 2001. He also has a political science degree from Saint Anselm College. Tim was also a member of the International Law Review. He was previously was an associate at Malen and Associates, P.C. where he handled litigation of collection matters for 7+ years.
 

Tim married his wife Donna in 2006 and has two children, a son Braden and a daughter Camaryn. He is an avid Yankees fan, fisherman, enjoys reading, traveling and collecting.

 

Tim can be reached at Peter T. Roach & Associates, P.C., 125 Michael Dr., Suite 105, Syosset, NY 11791, Phone: (516) 938-3100, Fax: (516)931-4403 or via email at tim.murtha@roachlawfirm.com.