Funding Focus

Do You Really Expect Me to Pay for This?

If you ask any person who has to collect accounts receivables whether they would rather collect from an insurance company versus a patient or family member, odds are they will choose the insurance company every time. Collecting for medical expenses is tough. Products and services provided by those in the HME industry are not something generally found on a Christmas or birthday wish list.

The final rule issued by the Centers for Medicare and Medicaid Services (CMS) mandating transfer of title of all oxygen equipment to the beneficiary at the end of 36 months should cause providers to pause and rethink their current collection process for the patient financial portion. In fact, comments in the final rule note that patient costs were used to calculate the formulas for payment methodology. CMS has repeatedly stated that the provider has a reasonable expectation to be paid.

Many providers submitted comments to CMS indicating it was not reasonable to expect them to transfer title for equipment that was not fully paid for. The response from CMS is very clear: The provider has adequate time leading up to the end of the 36-month capped rental period to address payment issues. Attempts to collect outstanding debt once the title has been transferred will probably prove futile.

Now is the time to take a long look at collection and payment policies. Start with a thorough assessment of the attitude of all staff that interacts with customers. Include anyone who has the opportunity to collect not only information but money. Employees must embrace the concept that it is OK to expect payment for goods and services provided. They must realize that to maintain the solvency of the company, and their jobs, your organization does not provide social and charitable services.

If your company insists on providing some charity services, be consistent and outspoken as to what your written policies and requirements are. Adopt a widely accepted parameter, such as the Federal Poverty Guidelines, to establish payment methodologies. Proof of income sources and tax-filing documents should be required to substantiate claims. These documents should be updated annually.

Unfortunately, anyone who has worked in this industry has come in contact with beneficiaries who have the ability to pay, but simply choose not to. Because we as an industry are hesitant to add on any finance charges, we are paid last. Providers may need to consider amending or establishing policies to clearly state that lack of payment on the part of the beneficiary constitutes cause for cancellation of the lease/rental agreement. It is important to clearly communicate this policy to customers. Delivery tickets may need to be amended. Do not wait until the last six months of the capped rental period to begin enforcing the collection process. This delay will not set well with CMS.

A recommended practice might include written notification, at least three times, as well as a documented phone call attempting to collect the debt. On the fourth occasion, notify the client that you are canceling the lease agreement for nonpayment on the account. Inform them that failure to return the equipment in the stated time (usually at least 14 days) will result in the equipment being reported as stolen to the police. This notice should be sent via certified mail with return receipt requested.

Under the final rule issued by CMS regarding conditions under which a provider can pick up equipment, it will be critical that ongoing, consistent and fair attempts at resolving issues with the beneficiary are clearly documented. A documented call to your CMS carrier informing them as the process proceeds also will help prove your company’s due diligence. Remember the old adage: If it is not documented, it is not done.

To enhance efficiency, we must get customer service, billing, respiratory care and delivery departments all working together to see that the monies due are collected in a timely manner. With continued reimbursement cuts, shrinking margins and competitive bidding still looming, failing to collect patient deductibles and co-pays is not an option.

Author’s note: Sandra Clancy, of Clancy Consulting, Grass Valley, Calif., was a contributing consultant for this article. Clancy Consulting specializes in the art of collection. Clancy can be reached at (530) 205-5346.

This article originally appeared in the Respiratory Management Jan/Feb 2007 issue of HME Business.

About the Author

Kelly Riley, CRT, is director of The MED Group's National Respiratory Network and has more than 25 years of experience in the respiratory arena.

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