When talking about the negative side of business, two words strike fear in the minds of both businesses and consumers alike; collection agency. To be a client, or in the medical world, a patient, and hear that you have to deal with a collection agency brings to mind thoughts of aggressive agents and ruined credit. For the companies that use them, the medical practices, you think of a third-party strong-arming your patients and giving your practice a bad name.
This does not have to be the case though. Collection agencies are a necessary part of any business to make sure debts are eventually paid in full and hopefully promptly. Without having a strong accounts receivables process, any business, including medical practices can suffer financially. Working with an ethical, reputable debt collection agency can work out well for both sides when agencies do it the right way. Here is how a good collection agency can help doctors and do right by both their brand and their bottom line.
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The bare minimum a debt collection agency must do is stay compliant with Federal Fair Debt Collection Practices. When evaluating if a debt collection agency is the right one to work with, you want to make sure they are fully in compliance with both the Consumer Credit Protection Act and the Fair Debt Collection Practices Act.
These federal statutes lay out the groundwork for how a debt collection agency must act and puts in place ground rules about how they can contact debtors when they can contact them, and how they must act when doing so. You can find how agencies measure up in these areas by checking places like the Better Business Bureau.
HIPPA and Data Security
As part of these federal mandates, debt collection agencies have a responsibility to keep debtors’ information private and secure. Data provided by doctors and hospitals can have personal information including SSN, DOB and other sensitive information. When collecting debts in the medical field, this becomes even more important due to the Health Insurance Portability and Accountability Act (HIPPA). As everyone in the medical profession knows well, HIPPA states that all Personally Identifiable Information must be protected from fraud, theft, and any other means of being made public.
Just like medical professionals, medical debt collectors must be aware of and compliant with HIPPA and they must convey to the doctors regarding this. A reputable medical debt agency will know that they must sign a HIPAA Business Associate Agreement to agree that they will comply with HIPAA regulations. They also must know that they do not need most Personal Identifiable Information unless it is specifically part of the debt for some reason. Working with a debt collection firm who knows how to operate under HIPPA regulations is key because if too much info gets passed along or used, that can be used against both the collector and the practice and could result in major problems for both.
Dealing with Insurance Companies
Medical debt collection agencies are not just about going after unpaid patient debt though. Doctors often have a nightmare dealing with insurance companies and getting the claim processed on time. A good medical debt collection agency can also help a practice deal with insurance companies during times that they are being difficult to deal with. Using the same skills that they use to settle debts with patients amicably and professionally, these companies can also do things for a practice such as assisting doctors and back-end personnel with insurance follow-up. The good medical debt collection agencies have even been known to coerce insurance companies into processing claims quicker than they usually do.
Insurance companies are legally liable to respond within a few weeks after a collection letter is received. Collection agency will not generally make phone calls to an insurance company.
Using medical debt collection agencies to work with insurance companies instead of, or in conjunction with, patients is a good idea for medical practices. This is because the insurance companies are the ones with the deep pockets and you are more likely to get paid in full from them. And two, many times a patient’s bill ending up in collections is not their fault, they (rightly in many cases) thought insurance had covered it. Going after the insurance company and helping solve a problem for a patient instead of going after then will be good for your reputation and strengthen your reputation.
A collection agency does not have to be a bad thing. When doctors are working with the right one and utilizing them in the right way will help your practice’s financial health and allow you to get paid in full in the right way, without damaging valuable patient relationships.