Re: Service Charges on past due payments and Collections

[Guest guest]

Never have late fees now that I keep credit card on file thru Transengen a office ally credit card businessSent from my iPhone

I believe Dr. Pratt is charging a late fee for past due statements.

Anyone else charging a monthly late fee balances that aren't paid after the 1st or 2nd invoice?

I brought this up a couple years ago - see below.

I've thought about doing this in the past, but haven't pulled the trigger, but will probably consider doing this starting 2012.

I would have my billers add a late payment CPT code to the statement (using a made up CPT code) that would add $5 onto the invoice.

Then the billers would increase the "units" of the CPT code each month.

My understanding is that I need to add this into the Financial Policy statement they sign when joining the practice.

Also, the policy needs to state that the costs of sending them to collections is their responsibility to pay -- that way you get the money and the cost of collecting from the patient.

I've thought about the ol' % interest on unpaid balances, but that always seemed complicated and confusing - although it does then reflect a larger fee for large balances and smaller fee for smaller balances.

The $5 per month is regressive -- it's a larger % of a small balance, but it also probably reflects teh actual cost of having to re-bill patients monthly for a balance - regardless of the total amount of the balance.

What is everyone else's experience with these issues?

Thanks

Locke, MD

---------- Forwarded message ----------

Date: Wed, Apr 2, 2008 at 1:42 AMSubject: Collections -- Service ChargesTo: Locke's in Colorado

Not sure I understand all the truth in lending laws, but here is an FPM comment on the issue.

I know my attorney has a statement at the bottom of his invoice that says...

If payment is not received within 30 days of the billing date, interest will accrue at the rate of 18% annum on all unpaid balances.

As noted below, that is a more difficult calculation to do monthly.

I agree with the idea of a service charge monthly for rebilling, but the number crunching is interesting.

$100 balance -- $5 fee per month for rebilling would be $60 per year and (I think) a 60% interest rate?

On the other hand, the 18% rate on the $100 would only be $18 yearly or $1.50 monthly...hardly worth the effort to calculate and go into the system and add onto the bill...IMHO.

I've heard some estimates that the cost of sending out a statement is $5-10 -- time to print up invoice (and adjust the amount if service fee), time to order paper, cost of paper, envelopes, stamps, time to open the mail, sort the mail, get the payment, enter the payment into the practic management system, deposit the check -- you get the idea.

We sometimes underestimate the amount of time and effort it takes to do this stuff.

Granted, sometimes the billing services or other situations seem to make it easier, but someone has to do it.

Locke, MD

February 2000 Table of Contents

Ask FPM

Collecting late payments

Q: If a patient pays a minimal amount on a large bill, can we threaten collections? Also, can we charge interest or impose late fees on overdue bills?

A: You may send a patient's past-due account to a collection agency and/or impose service or interest charges if he or she is not in compliance with the payment arrangements to which you and the patient have previously agreed.

The key is to explain to the patient at the beginning of your relationship what is expected financially and what the consequences (i.e., service or interest charges) may be if he or she fails to meet the agreed-upon expectations. This strategy generally increases collections and may actually reduce collection costs in the long run. This is best done with a written financial policy that must be signed by the patient and filed in his or her medical record or in a separate filing system for these policies.

Typically, patients should be expected to pay their share of the fee at the time of service. However, you may allow patients to pay large balances in installments. For special arrangements involving more than two installment payments, the written financial policy should include the information required by the truth-in-lending regulations as well as an explanation of the required service charges.

Although you can impose service charges or interest charges on late payments, service charges (monthly billing fees) may be easier to handle since they don't require the periodic notification to patients that interest charges do.

Service charges should increase with the size of the unpaid balance. For example, a $5 fee might be imposed on balances of less than $100, a $10 fee on balances between $100 and $250, and a $25 fee on balances in excess of $250.

If the patient fails to make full payment and you decide to turn the account over to a collection agency, you are required by law to notify the patient first.

Keller, CPBC, CFP*Healthcare Business Consultants Inc.Asheville, NC

[Guest guest]

Thanks, Elaine.

Interesting... http://www.transengen.com/

 

TransEngen has developed a technologically advanced and integrated platform capable of processing both healthcare and financial transactions. This platform – called “the TransEngen” – provides the end-to-end connectivity between payers, providers and consumers that will drive efficiencies that reduce costs, streamline payments, and reduce provider collection efforts for patient self-pay responsibilities.

With solutions directed at both payers and providers, TransEngen is leading the transformation of the healthcare payments process; creating valuable new functionality at nearly every transaction stage of the process and delivering real-time information at the point of care.

 

Our core provider product, the Revenue Maximizer, is a suite of web-based tools designed to help providers address the full range of patient financial responsibility – from co-pay to self-pay – determining whether the patient has insurance, the means to pay, and if not, connecting those patients to the right assistance programs. The Revenue Maximizer is an integrated eligibility verification, patient responsibility calculation and payment processing system, which enables providers to estimate what the patient owes and arrange for payment while the patient is still in the provider’s office.

Patient Responsibility CalculatorThe first component, the Patient Responsibility Calculator, provides the ability to determine a patient’s health plan eligibility and calculate their liability in real-time, upon check-in. It allows providers and office staff to present the patient with an easy-to-understand statement facilitating a pre-emptive conversation regarding payment for services, eliminating any misunderstandings later. The Patient Calculator provides three levels of response including basic Eligibility, Eligibility Plus, and the Calculator.

Payment ProcessingThe next component, our Payment Processing System powered by Maas Global Solutions, available standalone or integrated with the Patient Responsibility Calculator, is web-based and designed specifically for healthcare. Eliminating the need for dedicated phone lines and point of sale devices, our Payment Processing System electronically processes multiple forms of payments, such as credit/debit cards and checks, converting paper checks to electronic funds transfers. Additionally, the ability to securely store a patient’s form of payment, and capture authorization to access funds for future transactions or recurring payment plans, dramatically improves patient collections.

For more information about the Revenue Maximizer, visit www.therevenuemaximizer.com. HelpEngen™In the event that the patient is uninsured, underinsured or unable to pay due to a lack of credit or financing options, the web-based HelpEngen empowers providers and financial counselors to efficiently identify, screen and enroll patients in appropriate federal, state, and patient-specific benefit programs such as Medicaid, SCHIP, charity care, food stamps, etc. The HelpEngen generates prefilled program application forms and supports all aspects of the enrollment workflow to maximize health coverage for patients and minimize financial liability for providers. In addition, HelpEngen documents charity care eligibility and participation, and serves as a tool to reduce uncompensated care. Customers include hospitals, community health centers, school districts, and local government who stand to benefit from more efficiently managing the growing challenge of uncompensated care.

For more information about the HelpEngen, visit www.helpengen.com. Both components of the Revenue Maximizer and the HelpEngen™ have been designed to seamlessly integrate with other industry utilities such as Practice Management Systems, clearing houses and billing companies. This enables TransEngen to white-label either product or integrate into existing healthcare provider workflows to minimize disruption and expand product distribution.

The TransEngen payment gateway is powered by Maas Global Solutions Corporation, a PCI Level One compliant service provider. Locke, MD

 

 

 

Never have late fees now that I keep credit card on file thru Transengen a office ally credit card businessSent from my iPhone

1 of 1 File(s)

transengen_revmax.pdf

[Guest guest]

Do you also use their "  Convert paper checks to electronic fund transfer (EFT) " feature?

 

Never have late fees now that I keep credit card on file thru Transengen a office ally credit card businessSent from my iPhone

 

I believe Dr. Pratt is charging a late fee for past due statements.

Anyone else charging a monthly late fee balances that aren't paid after the 1st or 2nd invoice?

 

I brought this up a couple years ago - see below.

 

I've thought about doing this in the past, but haven't pulled the trigger, but will probably consider doing this starting 2012.

 

I would have my billers add a late payment CPT code to the statement (using a made up CPT code) that would add $5 onto the invoice.

Then the billers would increase the " units " of the CPT code each month.

 

My understanding is that I need to add this into the Financial Policy statement they sign when joining the practice.

 

Also, the policy needs to state that the costs of sending them to collections is their responsibility to pay -- that way you get the money and the cost of collecting from the patient.

 

I've thought about the ol' % interest on unpaid balances, but that always seemed complicated and confusing - although it does then reflect a larger fee for large balances and smaller fee for smaller balances.

 

The $5 per month is regressive -- it's a larger % of a small balance, but it also probably reflects teh actual cost of having to re-bill patients monthly for a balance - regardless of the total amount of the balance.

 

What is everyone else's experience with these issues?

 

Thanks

 

Locke, MD

 

 

---------- Forwarded message ----------

Date: Wed, Apr 2, 2008 at 1:42 AMSubject: Collections -- Service ChargesTo: Locke's in Colorado

Not sure I understand all the truth in lending laws, but here is an FPM comment on the issue.

 

I know my attorney has a statement at the bottom of his invoice that says...

 

If payment is not received within 30 days of the billing date, interest will accrue at the rate of 18% annum on all unpaid balances.

 

As noted below, that is a more difficult calculation to do monthly.

 

I agree with the idea of a service charge monthly for rebilling, but the number crunching is interesting.

 

$100 balance -- $5 fee per month for rebilling would be $60 per year  and (I think) a 60% interest rate?

 

On the other hand, the 18% rate on the $100 would only be $18 yearly or $1.50 monthly...hardly worth the effort to calculate and go into the system and add onto the bill...IMHO.

 

I've heard some estimates that the cost of sending out a statement is $5-10 -- time to print up invoice (and adjust the amount if service fee), time to order paper, cost of paper, envelopes, stamps, time to open the mail, sort the mail, get the payment, enter the payment into the practic management system, deposit the check -- you get the idea.

We sometimes underestimate the amount of time and effort it takes to do this stuff.

Granted, sometimes the billing services or other situations seem to make it easier, but someone has to do it.

 

Locke, MD

 

 

February 2000 Table of Contents

Ask FPM

Collecting late payments

Q: If a patient pays a minimal amount on a large bill, can we threaten collections? Also, can we charge interest or impose late fees on overdue bills?

A: You may send a patient's past-due account to a collection agency and/or impose service or interest charges if he or she is not in compliance with the payment arrangements to which you and the patient have previously agreed.

The key is to explain to the patient at the beginning of your relationship what is expected financially and what the consequences (i.e., service or interest charges) may be if he or she fails to meet the agreed-upon expectations. This strategy generally increases collections and may actually reduce collection costs in the long run. This is best done with a written financial policy that must be signed by the patient and filed in his or her medical record or in a separate filing system for these policies.

Typically, patients should be expected to pay their share of the fee at the time of service. However, you may allow patients to pay large balances in installments. For special arrangements involving more than two installment payments, the written financial policy should include the information required by the truth-in-lending regulations as well as an explanation of the required service charges.

Although you can impose service charges or interest charges on late payments, service charges (monthly billing fees) may be easier to handle since they don't require the periodic notification to patients that interest charges do.

Service charges should increase with the size of the unpaid balance. For example, a $5 fee might be imposed on balances of less than $100, a $10 fee on balances between $100 and $250, and a $25 fee on balances in excess of $250.

If the patient fails to make full payment and you decide to turn the account over to a collection agency, you are required by law to notify the patient first.

Keller, CPBC, CFP*Healthcare Business Consultants Inc.Asheville, NC

-- Sangeetha Murthy M.D7830 mont Mesa Blvd #287San Diego, CA 92111www.mypcponline.com

[Guest guest]

Hi ,

Yes, we charge a monthly late fee. It’s

amazing to me how many patients actually pay their bill once that $5 gets

tacked on. It is in our financial policy and we have always had some sort of

late fee in our financial policy, but when calculating a % late fee

individually got to be too much hassle (after about 6 months of doing it and

having to calculate it by hand), we opted for the $5 per month. I’ve

started tacking it on as CPT “XLT” starting on the 3rd

statement. I figure by that point, they’ve had 60 days to pay something

that in some cases is 3-4 months old, and our policy is that balances are due

within 14 days of the date of the invoice, which is typically the 15th

of the month. I have been known to waive the $5 late fee if someone calls

begging and pleading and has a good excuse. Sometimes they have not only a

late fee but a “copay collection fee” because they didn’t pay

their copay. We’ve flagged these patients and now warn them when they

come in. That’s a heftier fee. It always amazes me that people are

willing to pay $20 for a copay collection fee for a copay that is less than

that! Some patients end up paying over $50 for something that would have only

cost them $10 or $15 if they had simply paid on the day of service like their

insurance requires them to do.

Pratt

Office Manager

Oak Tree Internal Medicine P.C

www.prattmd.info

From: [mailto: ] On Behalf Of Locke

Sent: Tuesday, November 30, 2010

1:43 PM

To: practiceimprovement1; Practice

Management Issues

Subject:

Service Charges on past due payments and Collections

I believe Dr. Pratt is charging a late fee for past due statements.

Anyone else charging a monthly late fee balances that aren't paid after

the 1st or 2nd invoice?

I brought this up a couple years ago - see below.

I've thought about doing this in the past, but haven't pulled the

trigger, but will probably consider doing this starting 2012.

I would have my billers add a late payment CPT code to the statement

(using a made up CPT code) that would add $5 onto the invoice.

Then the billers would increase the " units " of the CPT code

each month.

My understanding is that I need to add this into the Financial Policy

statement they sign when joining the practice.

Also, the policy needs to state that the costs of sending them to

collections is their responsibility to pay -- that way you get the money and

the cost of collecting from the patient.

I've thought about the ol' % interest on unpaid balances, but that

always seemed complicated and confusing - although it does then reflect a

larger fee for large balances and smaller fee for smaller balances.

The $5 per month is regressive -- it's a larger % of a small balance,

but it also probably reflects teh actual cost of having to re-bill patients

monthly for a balance - regardless of the total amount of the balance.

What is everyone else's experience with these issues?

Thanks

Locke, MD

---------- Forwarded

message ----------

Date: Wed, Apr 2, 2008 at 1:42 AM

Subject: Collections -- Service Charges

To: Locke's in Colorado

Not sure I understand all the truth in lending laws, but here is an FPM

comment on the issue.

I know my attorney has a statement at the bottom of his invoice that

says...

If payment is not received within 30 days of the billing date, interest

will accrue at the rate of 18% annum on all unpaid balances.

As noted below, that is a more difficult calculation to do monthly.

I agree with the idea of a service charge monthly for rebilling, but

the number crunching is interesting.

$100 balance -- $5 fee per month for rebilling would be $60 per

year and (I think) a 60% interest rate?

On the other hand, the 18% rate on the $100 would only be $18 yearly or

$1.50 monthly...hardly worth the effort to calculate and go into the system and

add onto the bill...IMHO.

I've heard some estimates that the cost of sending out a statement

is $5-10 -- time to print up invoice (and adjust the amount if service fee),

time to order paper, cost of paper, envelopes, stamps, time to open the mail,

sort the mail, get the payment, enter the payment into the practic management

system, deposit the check -- you get the idea.

We sometimes underestimate the amount of time and effort it takes to do

this stuff.

Granted, sometimes the billing services or other situations seem to

make it easier, but someone has to do it.

Locke, MD

February

2000 Table of Contents

Ask FPM

Collecting late payments

Q: If a

patient pays a minimal amount on a large bill, can we threaten collections?

Also, can we charge interest or impose late fees on overdue bills?

A: You may

send a patient's past-due account to a collection agency and/or impose service

or interest charges if he or she is not in compliance with the payment

arrangements to which you and the patient have previously agreed.

The key

is to explain to the patient at the beginning of your relationship what is

expected financially and what the consequences (i.e., service or interest

charges) may be if he or she fails to meet the agreed-upon expectations. This

strategy generally increases collections and may actually reduce collection

costs in the long run. This is best done with a written financial policy that

must be signed by the patient and filed in his or her medical record or in a

separate filing system for these policies.

Typically,

patients should be expected to pay their share of the fee at the time of

service. However, you may allow patients to pay large balances in installments.

For special arrangements involving more than two installment payments, the

written financial policy should include the information required by the

truth-in-lending regulations as well as an explanation of the required service

charges.

Although

you can impose service charges or interest

charges on late payments, service charges (monthly billing fees) may be easier

to handle since they don't require the periodic notification to patients that

interest charges do.

Service

charges should increase with the size of the unpaid balance. For example, a $5

fee might be imposed on balances of less than $100, a $10 fee on balances

between $100 and $250, and a $25 fee on balances in excess of $250.

If the

patient fails to make full payment and you decide to turn the account over to a

collection agency, you are required by law to notify the patient first.

Keller, CPBC, CFP*

Healthcare Business Consultants Inc.

Asheville, NC

[Guest guest]

We use office ally for our pm... Awaiting AC's own pm. Can you tell me more about both these features-- holding credit cards for billing and converting paper checks to electronic?Thanks. Weakland

Do you also use their " Convert paper checks to electronic fund transfer (EFT)" feature?

Never have late fees now that I keep credit card on file thru Transengen a office ally credit card businessSent from my iPhone

I believe Dr. Pratt is charging a late fee for past due statements.

Anyone else charging a monthly late fee balances that aren't paid after the 1st or 2nd invoice?

I brought this up a couple years ago - see below.

I've thought about doing this in the past, but haven't pulled the trigger, but will probably consider doing this starting 2012.

I would have my billers add a late payment CPT code to the statement (using a made up CPT code) that would add $5 onto the invoice.

Then the billers would increase the "units" of the CPT code each month.

My understanding is that I need to add this into the Financial Policy statement they sign when joining the practice.

Also, the policy needs to state that the costs of sending them to collections is their responsibility to pay -- that way you get the money and the cost of collecting from the patient.

I've thought about the ol' % interest on unpaid balances, but that always seemed complicated and confusing - although it does then reflect a larger fee for large balances and smaller fee for smaller balances.

The $5 per month is regressive -- it's a larger % of a small balance, but it also probably reflects teh actual cost of having to re-bill patients monthly for a balance - regardless of the total amount of the balance.

What is everyone else's experience with these issues?

Thanks

Locke, MD

---------- Forwarded message ----------

Date: Wed, Apr 2, 2008 at 1:42 AMSubject: Collections -- Service ChargesTo: Locke's in Colorado

Not sure I understand all the truth in lending laws, but here is an FPM comment on the issue.

I know my attorney has a statement at the bottom of his invoice that says...

If payment is not received within 30 days of the billing date, interest will accrue at the rate of 18% annum on all unpaid balances.

As noted below, that is a more difficult calculation to do monthly.

I agree with the idea of a service charge monthly for rebilling, but the number crunching is interesting.

$100 balance -- $5 fee per month for rebilling would be $60 per year and (I think) a 60% interest rate?

On the other hand, the 18% rate on the $100 would only be $18 yearly or $1.50 monthly...hardly worth the effort to calculate and go into the system and add onto the bill...IMHO.

I've heard some estimates that the cost of sending out a statement is $5-10 -- time to print up invoice (and adjust the amount if service fee), time to order paper, cost of paper, envelopes, stamps, time to open the mail, sort the mail, get the payment, enter the payment into the practic management system, deposit the check -- you get the idea.

We sometimes underestimate the amount of time and effort it takes to do this stuff.

Granted, sometimes the billing services or other situations seem to make it easier, but someone has to do it.

Locke, MD

February 2000 Table of Contents

Ask FPM

Collecting late payments

Q: If a patient pays a minimal amount on a large bill, can we threaten collections? Also, can we charge interest or impose late fees on overdue bills?

A: You may send a patient's past-due account to a collection agency and/or impose service or interest charges if he or she is not in compliance with the payment arrangements to which you and the patient have previously agreed.

The key is to explain to the patient at the beginning of your relationship what is expected financially and what the consequences (i.e., service or interest charges) may be if he or she fails to meet the agreed-upon expectations. This strategy generally increases collections and may actually reduce collection costs in the long run. This is best done with a written financial policy that must be signed by the patient and filed in his or her medical record or in a separate filing system for these policies.

Typically, patients should be expected to pay their share of the fee at the time of service. However, you may allow patients to pay large balances in installments. For special arrangements involving more than two installment payments, the written financial policy should include the information required by the truth-in-lending regulations as well as an explanation of the required service charges.

Although you can impose service charges or interest charges on late payments, service charges (monthly billing fees) may be easier to handle since they don't require the periodic notification to patients that interest charges do.

Service charges should increase with the size of the unpaid balance. For example, a $5 fee might be imposed on balances of less than $100, a $10 fee on balances between $100 and $250, and a $25 fee on balances in excess of $250.

If the patient fails to make full payment and you decide to turn the account over to a collection agency, you are required by law to notify the patient first.

Keller, CPBC, CFP*Healthcare Business Consultants Inc.Asheville, NC

-- Sangeetha Murthy M.D7830 mont Mesa Blvd #287San Diego, CA 92111www.mypcponline.com

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[Guest guest]

As for the creditd cards OA has a system geared for medical offices called Transengen- love it and negotiated a great deal but I also use OA EHR, that helped in the negotiation. You can see the ad on their home page. I am in the process of getting ETF. OA has all the forms on their home page under resources, payer forms

 

We use office ally for our pm... Awaiting AC's own pm. Can you tell me more about both these features-- holding credit cards for billing and converting paper checks to electronic?

Thanks. Weakland

 

Do you also use their "  Convert paper checks to electronic fund transfer (EFT) " feature?

 

Never have late fees now that I keep credit card on file thru Transengen a office ally credit card businessSent from my iPhone

 

I believe Dr. Pratt is charging a late fee for past due statements.

Anyone else charging a monthly late fee balances that aren't paid after the 1st or 2nd invoice?

 

I brought this up a couple years ago - see below.

 

I've thought about doing this in the past, but haven't pulled the trigger, but will probably consider doing this starting 2012.

 

I would have my billers add a late payment CPT code to the statement (using a made up CPT code) that would add $5 onto the invoice.

Then the billers would increase the " units " of the CPT code each month.

 

My understanding is that I need to add this into the Financial Policy statement they sign when joining the practice.

 

Also, the policy needs to state that the costs of sending them to collections is their responsibility to pay -- that way you get the money and the cost of collecting from the patient.

 

I've thought about the ol' % interest on unpaid balances, but that always seemed complicated and confusing - although it does then reflect a larger fee for large balances and smaller fee for smaller balances.

 

The $5 per month is regressive -- it's a larger % of a small balance, but it also probably reflects teh actual cost of having to re-bill patients monthly for a balance - regardless of the total amount of the balance.

 

What is everyone else's experience with these issues?

 

Thanks

 

Locke, MD

 

 

---------- Forwarded message ----------

Date: Wed, Apr 2, 2008 at 1:42 AMSubject: Collections -- Service ChargesTo: Locke's in Colorado

Not sure I understand all the truth in lending laws, but here is an FPM comment on the issue.

 

I know my attorney has a statement at the bottom of his invoice that says...

 

If payment is not received within 30 days of the billing date, interest will accrue at the rate of 18% annum on all unpaid balances.

 

As noted below, that is a more difficult calculation to do monthly.

 

I agree with the idea of a service charge monthly for rebilling, but the number crunching is interesting.

 

$100 balance -- $5 fee per month for rebilling would be $60 per year  and (I think) a 60% interest rate?

 

On the other hand, the 18% rate on the $100 would only be $18 yearly or $1.50 monthly...hardly worth the effort to calculate and go into the system and add onto the bill...IMHO.

 

I've heard some estimates that the cost of sending out a statement is $5-10 -- time to print up invoice (and adjust the amount if service fee), time to order paper, cost of paper, envelopes, stamps, time to open the mail, sort the mail, get the payment, enter the payment into the practic management system, deposit the check -- you get the idea.

We sometimes underestimate the amount of time and effort it takes to do this stuff.

Granted, sometimes the billing services or other situations seem to make it easier, but someone has to do it.

 

Locke, MD

 

 

February 2000 Table of Contents

Ask FPM

Collecting late payments

Q: If a patient pays a minimal amount on a large bill, can we threaten collections? Also, can we charge interest or impose late fees on overdue bills?

A: You may send a patient's past-due account to a collection agency and/or impose service or interest charges if he or she is not in compliance with the payment arrangements to which you and the patient have previously agreed.

The key is to explain to the patient at the beginning of your relationship what is expected financially and what the consequences (i.e., service or interest charges) may be if he or she fails to meet the agreed-upon expectations. This strategy generally increases collections and may actually reduce collection costs in the long run. This is best done with a written financial policy that must be signed by the patient and filed in his or her medical record or in a separate filing system for these policies.

Typically, patients should be expected to pay their share of the fee at the time of service. However, you may allow patients to pay large balances in installments. For special arrangements involving more than two installment payments, the written financial policy should include the information required by the truth-in-lending regulations as well as an explanation of the required service charges.

Although you can impose service charges or interest charges on late payments, service charges (monthly billing fees) may be easier to handle since they don't require the periodic notification to patients that interest charges do.

Service charges should increase with the size of the unpaid balance. For example, a $5 fee might be imposed on balances of less than $100, a $10 fee on balances between $100 and $250, and a $25 fee on balances in excess of $250.

If the patient fails to make full payment and you decide to turn the account over to a collection agency, you are required by law to notify the patient first.

Keller, CPBC, CFP*Healthcare Business Consultants Inc.Asheville, NC

-- Sangeetha Murthy M.D

7830 mont Mesa Blvd #287

San Diego, CA 92111

www.mypcponline.com

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[Guest guest]

Yes 10, unless someone has made payment arraingments with us

From: [ ] On Behalf Of Locke [lockecolorado@...]

Sent: Tuesday, November 30, 2010 2:42 PM

To: practiceimprovement1; Practice Management Issues

Subject: Service Charges on past due payments and Collections

I believe Dr. Pratt is charging a late fee for past due statements.

Anyone else charging a monthly late fee balances that aren't paid after the 1st or 2nd invoice?

I brought this up a couple years ago - see below.

I've thought about doing this in the past, but haven't pulled the trigger, but will probably consider doing this starting 2012.

I would have my billers add a late payment CPT code to the statement (using a made up CPT code) that would add $5 onto the invoice.

Then the billers would increase the " units " of the CPT code each month.

My understanding is that I need to add this into the Financial Policy statement they sign when joining the practice.

Also, the policy needs to state that the costs of sending them to collections is their responsibility to pay -- that way you get the money and the cost of collecting from the patient.

I've thought about the ol' % interest on unpaid balances, but that always seemed complicated and confusing - although it does then reflect a larger fee for large balances and smaller fee for smaller balances.

The $5 per month is regressive -- it's a larger % of a small balance, but it also probably reflects teh actual cost of having to re-bill patients monthly for a balance - regardless of the total amount of the balance.

What is everyone else's experience with these issues?

Thanks

Locke, MD

---------- Forwarded message ----------

Date: Wed, Apr 2, 2008 at 1:42 AM

Subject: Collections -- Service Charges

To: Locke's in Colorado

Not sure I understand all the truth in lending laws, but here is an FPM comment on the issue.

I know my attorney has a statement at the bottom of his invoice that says...

If payment is not received within 30 days of the billing date, interest will accrue at the rate of 18% annum on all unpaid balances.

As noted below, that is a more difficult calculation to do monthly.

I agree with the idea of a service charge monthly for rebilling, but the number crunching is interesting.

$100 balance -- $5 fee per month for rebilling would be $60 per year and (I think) a 60% interest rate?

On the other hand, the 18% rate on the $100 would only be $18 yearly or $1.50 monthly...hardly worth the effort to calculate and go into the system and add onto the bill...IMHO.

I've heard some estimates that the cost of sending out a statement is $5-10 -- time to print up invoice (and adjust the amount if service fee), time to order paper, cost of paper, envelopes, stamps, time to open the mail, sort the

mail, get the payment, enter the payment into the practic management system, deposit the check -- you get the idea.

We sometimes underestimate the amount of time and effort it takes to do this stuff.

Granted, sometimes the billing services or other situations seem to make it easier, but someone has to do it.

Locke, MD

February 2000 Table of Contents

Ask FPM

Collecting late payments

Q: If a patient pays a minimal amount on a large bill, can we threaten collections? Also, can we charge interest or impose late fees on overdue bills?

A: You may send a patient's past-due account to a collection agency and/or impose service or interest charges if he or she is not in compliance with the payment arrangements to which you and the

patient have previously agreed.

The key is to explain to the patient at the beginning of your relationship what is expected financially and what the consequences (i.e., service or interest charges) may be if he or she fails to meet the agreed-upon expectations. This strategy generally

increases collections and may actually reduce collection costs in the long run. This is best done with a written financial policy that must be signed by the patient and filed in his or her medical record or in a separate filing system for these policies.

Typically, patients should be expected to pay their share of the fee at the time of service. However, you may allow patients to pay large balances in installments. For special arrangements involving more than two installment payments, the written financial

policy should include the information required by the truth-in-lending regulations as well as an explanation of the required service charges.

Although you can impose service charges or interest charges on late payments, service charges (monthly billing fees) may be easier to handle since they don't require the periodic notification to patients that interest charges do.

Service charges should increase with the size of the unpaid balance. For example, a $5 fee might be imposed on balances of less than $100, a $10 fee on balances between $100 and $250, and a $25 fee on balances in excess of $250.

If the patient fails to make full payment and you decide to turn the account over to a collection agency, you are required by law to notify the patient first.

Keller, CPBC, CFP*

Healthcare Business Consultants Inc.

Asheville, NC