As we continue to age it becomes more difficult to have a clean bill of health. Whether it be you or one of your loved ones that experience a medical hardship, it can be very difficult to cope. It seems inevitable that an unexpected health issue will arise leading to a visit to a medical professional followed by bills. While both medical and credit debt can affect your credit report, there are a few unique differences between the two types of debt. Patients don’t always have a choice when it comes to healthcare like they do when applying for credit. The medical service is needed in order to get well again. In most cases there isn’t a contract or predetermined payment plan when one incurs medical debt. Once the bill is sent the balance is due in full unless an arrangement is made with the provider. Patients are faced with using their savings accounts, taking on credit card debt and even bankruptcy in order to resolve their unpaid medical debts. The biggest difference for a consumer is: medical debt can only negatively affect their credit rating.
Over two decades ago I began my collection career working as a collector for a mom and pop medical collection agency. I quickly began to realize medical debt applied to everyone. While at the agency I collected on debts owed by professional athletes, friends, family and even a schoolteacher I had growing up. Their account could have been placed in collections for many different reasons: lack of insurance, billing errors or not understanding how their deductible and copay works. It was my job to find out why the account had not been paid and find a solution to resolve the patient’s account. Once the reason for delinquency had been identified I would either educate the consumer as to why they were responsible to pay the debt or I would file a UB92 form with their health insurance provider. The UB92 has since been replaced with the UB04 and while most healthcare providers and insurance companies continue to use the UB92, Medicare and Medicaid will no longer accept the older form.
How we collect medical debt has changed quite a bit over the last couple of decades. Collectors have to carefully determine if the consumer has a legitimate billing issue due to how their insurance or financial assistance claim was filed. If not, they must overcome the consumer’s objection while avoiding a potential complaint. Collectors still want to take an empathetic approach, show compassion and remain respectful but also be assertive and well versed in financial assistance programs offered by the provider, charity programs, insurance billing and all healthcare regulatory requirements. It’s our job as collectors to turn difficult circumstances into positive experiences.
If you’ve visited a medical professional over the last few years you may have noticed service providers’ office personnel will check for healthcare coverage and even collect their copay prior to providing treatment. The healthcare providers have had to train their personnel in order to increase the likelihood of getting paid for their service. I’ve listed a few suggestions for agencies and their collectors to remember when collecting medical debt:
• Collectors and their agencies must comply with 501(r), which prohibits extraordinary collection activity before making reasonable efforts to determine whether a patient is eligible for financial assistance. A few examples of extraordinary collection activity include legal action, reporting adverse information to the credit bureau and selling the debt.
• It’s important to properly train collectors on the Health Insurance Portability and Accountability (HIPAA) Act which was created to protect patients’ private information. You should frequently monitor how collectors document patients’ account and communication with third parties including spouses and attorneys to avoid disclosing personal or private medical conditions.
• The Health Information Technology for Economic and Clinical Health (HITECH) Act was put in place with the purpose of implementing the use of electronic health records. While collectors do not directly fall under the scope of the HITECH Act, it’s still important that we protect the privacy and security of all electronic health records.
• Create a culture in your organization where your collectors show genuine empathy, professionalism and respect to the individual on the other end of the phone. We have found those three traits not only help avoid complaints but they also help increase collections.
Sam Eidson is the Director of Compliance for Delta Outsource Group, Inc. He also serves on the Board of Directors for the Missouri Collectors Association.