Collection of private pay monies can be the most difficult part of the management of accounts receivable. Most business offices and billers don’t have a problem with billing claims to Medicare, Medicaid or Commercial Insurance plans as they are faceless entities. Collecting money from residents and families that you see every day or speak to on the phone can be very uncomfortable. It is commonly a payor that gets pushed aside as far as collections go because of the discomfort. However, when approached with the right attitude and process, any business office can succeed at maintaining clean private receivables.
This process starts with the admission. When a facility is clear and upfront about a resident/family responsibilities regarding payment this starts everyone off on the right foot. Too many times families are told “Don’t worry, Medicare will pay for everything”. This practice really must be stopped. Most facilities do have language in admission agreements regarding private responsibilities regarding payment but they should also be given some attention explaining the language to people. Be clear about copays, private ancillary charges not included in base rate, medicaid rules regarding income, etc. This explanation also should not stop at the initial admission. When a resident is first admitted, the resident and responsible party are overwhelmed by information. Also, they may be coming in skilled but later down the line they convert to custodial and their payor structure changes. Be sure to regularly revisit with your residents and families whenever their status changes to review the private responsibilities.
Another area that will help with maintaining clean private receivables is in the ease in which residents and families can make payments. Allow them to drop checks off at the reception desk after hours or provide a payment drop box. When sending statements, include a return self addressed envelope if possible. Consult with your bank or financial institution regarding the process for accepting credit card payments. You can also assist your resident/families with setting up automatic check writes from their own bank or talk to them about allowing the facility to become rep payee on social security and income payments to have the monies sent directly to the facility. You will also want to make sure someone is available to answer any questions a resident or family has on their bill. Sometimes it is just a matter of a simple question that prohibits a payment being made. Any steps you can take to make it as easy as possible for your residents/families to make their payments, the more success you will have with collecting.
After you have done all you can on the front end to assist with better private collections, you will still need a process in place for handling missed or delinquent payments. The best chance for success is to be timely and consistent. As a business office you will want to establish collection procedures that include escalation points. Procedures should include; a friendly reminder call and letter (this is done within a few days after the due date of the payment); a second call and letter attempt should the first reminder fail; the third attempt should be more aggressive and may include cooperation from the administrator and possible threat of discharge. The procedures should be followed the same for all delinquent accounts and these three procedures should take place within a 30 day time span. Don’t let them drag out too far or you will end up stuck with a couple of months worth of uncollectible monies. Once you establish a schedule and process for private collections, your residents and families will quickly learn what is expected of them and that they cannot take advantage and must maintain their side of the agreement. Certainly you may have extenuating circumstances that may draw you from the established schedule but just remember to document those properly and stay on top of them.
Private collections can be a daunting and undesirable task, but they are necessary to maintain clean accounts receivable. Establishing a good process includes being upfront with residents and families regarding their responsibility, setting up systems that allow making payments as easy as possible, and following a schedule for collection steps. Just remember, you are only collecting money in return for care and services provided to your residents on behalf of your facility. It is not personal and it is everyone’s responsibility to fulfill their obligations in a service setting.
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