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