What I Wish I Knew About Collections When I Was a Practice Manager and Biller.

By Delisa Maney, CPB
Account Executive at Transworld Systems
Delisa.Maney@transworldsystems.com
O:  704-717-2486
C:  773-349-1261

I recently started working for Transworld Systems, the nation’s largest collection agency, after being a practice manager and practice management consultant for several years.  As a consultant, my main focus was accounts receivable and I sometimes acted as a biller to get practices back on track.  I used a conventional collections agency when accounts were at 90 days or more past due with varied results.  I figured that the low success rates had to do with the nature of the debt and was happy if I got anything at all back.   Sure, it was annoying to have to pay 25 – 35 percent to the collections agency but what choice did I have?  Because of the nature of the agreement we had with the agency, even if the patient sent the check directly to me, I still had to fork over the agency’s percentage.  I thought this was just a necessary evil.  Boy, was I wrong.  Below are the three most important lessons I have learned from working inside a collections agency.
Lesson # 1:  Your percentage-based collection agent is a bounty hunter.
When a conventional, contingency-based collection agent gets your debt, it is prioritized.  The collector of course only gets paid if he or she is able to get the debtor to pay.  So, they will look through the debt they have been assigned and then focus their efforts on the debt that has the biggest payoff.  That means that if your debt is relatively small, say less than $800, you will get the minimum effort from a collector.  That usually means a letter and maybe a phone call.  If there is no success, the agent moves onto bigger game where more money can be made.
Lesson #2: You know that great, low percentage rate you have negotiated with your conventional collections agency?  It’s actually hindering efforts being made to collect your debt.
The less money the collector can make from your debt, the less interest there is in working to get that debt paid.  The collector will move on to other accounts where there is a bigger cut.  Your small percentage with your small balance is simply not in the collector’s best interest where there is bigger debt with a bigger payoff somewhere else.
Lesson #3:    There is a cheaper and more effective option.  Use a flat fee agency.
There are some agencies, such as Transworld, that work on a flat fee basis and the entire amount of the debt goes directly to you.  So for example, if a patient owes $100 and pays $100 you get the entire amount.  The patient will pay you directly.  The flat fee (anywhere from $6 to $16) covers the cost of collections so the money can go straight to you.  The difficult thing for many to wrap their head around is the notion of paying BEFORE the debt is actually collected.  The easiest way to explain this reasoning is to compare the debt cycle to a disease.  If a doctor saw a patient and was sure he had a serious disease, but the patient wasn’t responding to a cure for that disease, would a doctor continue indefinitely with the cure that wasn’t working?  Of course not.  The physician would intervene as early as possible with another proven cure to eradicate the disease.   Debt behaves in the same way.  The longer debt festers, the harder it is to cure.  Flat fee agencies are able to provide you with the same, or in many cases better, service for a much lower cost than conventional agencies because they 1) encourage their clients to act on debt earlier in the cycle and 2) have worked out the lowest possible cost to recover the debt (the proven cure) and then charge you for the actual work that is done.  With many flat fee agencies a certain amount of work is guaranteed so you don’t have to worry about the bounty hunter getting distracted with bigger game.   Since the flat fee doesn’t change, the actual percentage of money paid to collect the debt goes down as the value of the debt rises.  A small balance gets just as much attention as a large balance, so overall recovery rates tend to be higher as well.
Additionally, some agencies such as Transworld Systems also provide portals where you can track the progress of an account and create reports you can later use for tax purposes.
So, the next time you are submitting debt to your conventional collections agency, ask yourself, “Do I want a bounty-hunter or a debt specialist?”  If you want the specialist with proven and guaranteed results, use a flat-fee agency such as Transworld Systems.  If you want to roll the dice, stay with your current conventional percentage-based agency and hope for the best.
If you are in the Rome, NY area and would like to know more about Transworld Systems, please contact Dick Neary at 941-350-9918 or dickneary@gmail.com.  If you live in any other part of the United States, please direct your Transworld System inquiries to me at 773-349-1261 or delisa.maney@transworldsystems.com.
Disclaimer:

Delisa contacted us and asked about writing an article about collections.  She explained that she works with Transworld Systems which we happen to be very familiar with.  One of our largest offices works with Dick Neary of Transworld and has really good results with the company.  So, the following article was written by Delisa and we agree with what she has to offer.

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Is Your Biller Filing Money Away?

There seems to be a new trend with insurance payments.  Some insurance carriers are now issuing what they call virtual credit cards.  What is a virtual credit card you may be wondering?  Well it’s basically a picture on the EOB that resembles a credit card that contains a one-time use number to allow the provider to be reimbursed for their services electronically.  The problem is that the provider or the person who handles the EOBs must recognize that the payment is being made by virtual credit card.

If the person handling the EOB does not recognize the payment information as being a virtual credit card they may simply post the EOB and file it, not realizing that they must use the information on the virtual credit card to obtain the payment.  Many providers have systems that don’t allow them to enter payments without accounting for the funds, however there are still many providers out there who do not have systems to protect them from these accounting errors.  If this is the case they may be filing away money that should be deposited into their bank account.

The problem with the virtual credit cards is that they can be easy to overlook.  If the person is unfamiliar with them they may go unnoticed.  And if the payment gets posted in the system then they will be recorded as paid even though the provider didn’t actually get the money.  Virtual credit card numbers must be run through the providers’ credit card system so that the provider can receive the funds.

There are companies out there providing the service of issuing the virtual credit cards to providers on behalf of insurance carriers.  The insurance carriers are saving money on not creating and mailing paper checks.  The virtual credit card companies are making their percentage whenever the virtual credit cards are redeemed.  And now the providers are bearing some of these expenses.

So what can a provider do?  Well if they have the ability to accept credit cards then they can simply put the virtual credit through their credit card system.  If they do not want to do that, or if they are unable to accept credit card payments (yes, there are still some out there) they can refuse the virtual credit card.  Most of these companies will continue to issue paper checks if the provider calls and informs them that they will not accept the virtual credit cards.  I do think that somewhere in the future they will find a way to mandate that providers accept them but for now that is not the case.

The one thing for sure is that they cannot simply be ignored.  The payment either needs to be run through the credit card system to process it, or the insurance carrier needs to be contacted so that they payment can be received in an alternate manner.  Don’t let your office lose money by overlooking these payments and not processing them.

5 Things to Make working your aging report easier

It has certainly been established that most of the revenue lost in medical offices is due to the aging report not being worked regularly.  In order to make sure a provider is collecting all that is due the aging reports must be run regularly and worked to ensure that all claims are processed correctly.  Many times this important task is pushed to the bottom of the pile or completely dropped.

The main reason that the aging report is not run regularly is because it is a very time consuming task.  So what if we told you that there is a way to make working your aging report easier?

There are actually several things that can be done to make working the aging report easier.  Here are 5 of them:

1.    Work the report regularly.  Working the aging report regularly makes it easier to work because the problem claims are being taken care of and missed claims are being checked on.  Working the aging report regularly cuts down on the claims that are on the report.  If the report is not worked regularly then the report will continue to grow larger.
2.    Note actions taken on problem claims in the computer.  This will cut down on checking on claims that are already being taken care of.
3.    Get rid of claims that are uncollectable.  Having claims on the report that are not collectable just mucks up the report.  For example, if you have a claim that is two years old and you have no grounds for appeal, and you cannot bill the patient, then you should get the claim right out of the system.  (Noting of course why the claim is uncollectable.)
4.    Check your clearinghouse reports.  Many times the answers to why claims are not paid are right in the clearinghouse reports.  If these reports are not checked then the claims will remain outstanding with no explanation as to why and they will need to be worked.  If the clearinghouse reports are checked and action is taken on problem claims, these claims will either not be on the aging report (because they will have been processed) or they will have an explanation as to why they are on the report and no further action will be needed.
5.    Get enrolled with insurance carrier websites to do claim status checks.  Checking claim status online is much easier than making a phone call.  Enrolling in as many insurance websites as possible will make it much easier to work the aging report.