Category Archives: Collection Policy


Five essential questions for your collection policy


By Anne Orrick, COO, Allegiance Group

A collection policy is the set of procedures your company will follow to ensure payment of patient accounts. To cover the basics in your policy, answer these five essential questions:

  • What are your collection goals?
    Always start with the end in mind, so establish your collection goals. Industry goals to consider include days sales outstanding, clean claim ratio, open order days, hold days, cash recovery rate, denial rate, write-off rate.

 

  • How will those goals be measured?
    Use the SMART criteria when setting your goals: specific, measurable, attainable, relevant and time-based. Track your workflow ratios on a daily, weekly, monthly, quarterly and annual basis. By watching your trends, you can determine if you need to adjust your collection policy to meet your goals.

 

  • What is the collection process?
    Begin by flowcharting your workflow. Identify the information to capture upfront and the payment options you will offer. Answer the following questions: Will you be flexible on your payment plans?  Define how you’ll contact the patient. What steps will you take to collect a past-due balance? Remember to focus on how you can automate your process. Look for systematic ways to communicate to patients, process payments, track responses and age accounts with as little of your staff’s involvement as possible.

 

  • Who will resolve disputes?
    Consider identifying a few employees as resolution specialists. Their responsibilities should include handling questions, researching accounts, determining how much should be written off and approving the write-off.

 

  • When will you write off an account?
    Set guidelines to determine when to label a balance as uncollectable. Then outline the next steps. Will you send the account to an outside agency? Will you report the debt to a credit bureau?

The answers to these five essential questions will serve as the foundation for your collection policy. Once you train your staff on the procedures you will create clarity and consistency within your organization.

As seen in HME News, October 30, 2018

Use your collection policy as a compass


As seen in HMENews, Tuesday, October 2, 2018

3 Steps to a Stronger Collection Policy


A written collection policy sets the tone for how you extend credit and collect outstanding balances. It should outline the company’s procedures on a variety of topics such as what information to collect from a patient upfront and how to set up a payment plan. Most importantly, you should publish, train to and abide by the rules that the collection policy sets.

You’ll also want to think about how often you will contact a patient who has an outstanding balance and when to write off if it remains unpaid. The policy should follow the collective culture of your organization and define the workflow of who will complete which tasks throughout the process.

1. Observe the “C’s” of Patient Collections: Clear and Compassionate

Treat every patient the same way – and most importantly, provide clear details so your team can focus on their health and well-being. The conversations can be more about details surrounding co-insurance and payment arrangements.

This isn’t to say that collections of these dollars should be ignored – our goal is to urge you to standardize the way you deal with each patient – and publish the rules. Our experience over the years has shown that these types of actions will both increase your internal team’s confidence in collections and the clarity with which patients work with the organization.

2. Understand the way that Patient AR affects Days Sales Outstanding

We all know that collecting ‘more’ equals greater collections, but all HME providers aren’t affected the same way by their policy. You need to evaluate the type of business you do and the effort involved with chasing down patient balances.

Continue reading 3 Steps to a Stronger Collection Policy