One of the challenges to LTPAC providers is how and when to refer unpaid accounts to outsourced solutions for collection. Ideally, your Revenue Cycle Management (RCM) process should include Best Practices for the Inquiry and Admissions Process that will help to minimize the risk of potential collection issues for Private Pay. The RCM process should also include a Policy and Procedure for “Collections”. A series of telephone calls, progressive letters, and involvement by either the Administrator and/or Business Office Manager (BOM) is standard procedure for most LTPAC providers. It is also recommended to involve your legal counsel in the review of the Policy and Procedure as well as any templated correspondence such as notices, letters of request for payment, etc.
When an expected private pay payment is not received by the due date (generally by the 5th business day of a month), that should initiate the steps of your “collections” process. Providers often wait too long to refer a delinquent account to an outsourced collections firm or attorney. You may wish to consider referring accounts that have reached either the 30 or 60-day point past the due date. Each month of continued delay increases the risk for non-collection of monies due.
Month One (0-30 days)
25th of the Month: Send Private Pay Statements
5th of the following Month: Payment Due Date
6-15th of the Month: 1st Phone call from Business Office and 1st letter to Responsible Party (Include a copy of the original statement)
16-25th of the Month: 2nd Phone Call from Business Office and 2nd Letter to Responsible Party
25th-30th of the Month: Referral to Administrator for intervention-Phone Call or interaction with Responsible Party face to face. Send 3rd letter (Certified Mail)
Month Two (30-60 days)
Initial contact with collections agency or legal firm/attorney. If there is no response to the certified letter sent at the end of the previous month by the 10th day of Month Two, make the decision as to whether it is time to take more aggressive action.
If the balance in arrears is related to monthly resident liability, the Business Office should immediately begin the process of becoming Representative Payee for the resident or changing the address of the check to the community address.
Responsible parties/residents may have extenuating circumstances such as the pending sale of a home/real estate/investment assets. If the community is willing to wait for payment, any terms should be documented. If a promissory note is part of your process at that stage, involve your legal counsel for the delineation of that process. In addition, if payment is not received, it may be an indication that the responsible party is in need of information or assistance regarding the Medicaid program.
Additional consideration should be given to whether the community will initiate a Voluntary Discharge process and if so, at what point of the non-payment timeline. You will need to follow the rules of your state.
Summary
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