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Right now, healthcare providers have the weight of the world on their shoulders. Workers on the front lines are waging battle against a pandemic that has taken lives, livelihoods, and people’s sense of security.

Meanwhile, administrators are trying to keep the doors open, and revenue cycle teams are working tirelessly to protect the financial health of their organization. Revenues are declining due in part to people’s reluctance to seek traditional in-person care, various state orders prohibiting collection activity, and hardships that are making it tough for patients to satisfy their medical needs.

Under these circumstances, proper and effective management of healthcare receivables is paramount.

Last week, I sat down with my colleague Sara Woggerman, compliance consultant at Ontario Systems, for “Managing Patient Receivables in the COVID-19 Era: What Providers Need to Know.” During the webinar, we discussed what providers and their first- and third-party collection partners must do to navigate the crisis—and what they can do to position themselves for long-term stability and success. (Be sure to download the webinar replay here.)
 
 

Collection Practices that Ruin Reputations and Raise Legal Issues

It’s crucial that you clearly define, and clearly understand, how your A/R agents and business associates (first- and third-party collectors) engage patients for collection purposes. Otherwise, you could risk serious harm to your reputation and your business operations.

Here are some of the key issues you’ll need to address to avoid critical missteps.

Are you complying with state orders?

Some states have prohibited all collections activity during this time. We covered specific examples during the webinar, but a good real-time resource for this information is Cornerstone Support’s Coronavirus Guidance. Other solid COVID-19 resources include the National Consumer Law Center, InsideARM, and ACA International.

 

Are you and your collection partners in lockstep?

As part of your pandemic response plan, you should make clear to third-party debt collectors and legal partners your standards and expectations for how they’ll manage your receivables and how they should communicate with patients during COVID-19. Specifically, you will want to discuss your collection partners’ workflow regarding:

  • Content, sufficiency, and applicability of their hardship policy;
  • Process to identify patients who have been impacted financially because of COVID 19;
  • Handling of existing payment arrangements;
  • Requests to waive or suspend interest or payments;
  • Compliance with pandemic state collection restrictions;
  • Status of all litigation and garnishment holds; and
  • Use of national disaster codes when furnishing information to credit reporting agencies.

In addition, your first- and third-party collectors should provide you with regular updates on changes to their collection practices,  changes to state collection restrictions, changes to their policies and procedures, and any complaint trends during this period.

 

Are remote agents complying with HIPAA?

With most collection teams now working remotely, you and your partner agencies should be having conversations about managing HIPAA compliance and the steps they’re taking to keep patient data safe (e.g., communicating with patients within a protected, secure, encrypted environment; working in an enclosed, private area of the home).
 

How are you engaging patients?

Communicate with empathy on inbound calls and use the time to educate patients about their payment and self-service options. Request permission to deliver disclosures electronically on a preferred digital channel so you can improve the patient experience. Some states are requiring collectors to ask patients whether they need accommodations such as suspension of payments; this is probably a sensible practice across the board.

We also recommend reviewing the language in your extraordinary collection activity notices. If it currently includes legal actions such as garnishments, repossessions, collection litigation, etc., you will want to remove this information from your 501(r) notices in states that prohibit the seizure of stimulus fund payments. You’ll also want to consider whether such actions could be considered an unfair, deceptive, or abusive trade practice in states that do not have stimulus fund protections in place.

Are your enforced collection actions appropriate?

Be mindful of what garnishments you had in place before COVID-19 and how your legal partners are interacting with your patients. Consider putting a stop to any further garnishments (bearing in mind that stimulus payments from the government can’t be garnished), and revisit your litigation strategies, until emergency orders are lifted.

Depending on your jurisdiction, there may be no court available for a patient in debt to fight a garnishment order—thus, no opportunity for due process. Inflexibility in circumstances of hardship and/or aggressive collection actions could generate negative press coverage, and perhaps even a class-action lawsuit against the collector and healthcare provider involved.
 
 

Limited Options for Patient Engagement and Payments

In the COVID-19 era, many people are fearful of exposure to others. They prefer virtual encounters whenever possible. This makes digital engagement and payment channels vital for patients and providers. Patients want to access their accounts at their convenience, see what their payment options are, and engage (complete admissions and consent forms, for example) through preferred communication channels such as text, email, portal, and chat.

In its Trends in Healthcare Payments Annual Report (10th edition), InstaMed highlights an increasing need for the electronic payment experience. Among InstaMed’s findings:

  • 87% of providers are still using manual processes and paper for collections.
  • 78% of providers can’t collect $1,000+ patient balances within 30 days.

The report also highlights that many patients cannot satisfy a $1,000+ receivable, and their ranks are growing. In order to keep the lines of communication open with such patients during the collection process, providers need to understand the financial challenges their patients are experiencing and communicate with them in the manner and at the time they prefer.

Providers are well advised to adopt tools that can help ease the burden of collections, manage compliance issues, and make the payment of medical debt as easy as possible. Yet many providers are slow to adopt these new tools.

One reason for the lack of widespread adoption among collectors is the fear of compliance risk associated with texting. But complying with the Telephone Consumer Protection Act is as simple as getting express consent to text, which isn’t difficult to obtain. With a compliance-minded digital communication platform, you can send an email instead of a letter, or send a text instead of placing a call—ultimately making your business more accessible to patients in the manner they prefer to communicate.

There are many ways you can use integrated communication and payment technology to improve the patient experience and recovery efforts all at once:

  • Introduce patients to self-service/payment portal on billing statements.
  • Use IVR on inbound calls to introduce various payment options, including financial assistance.
  • Allow patients to pay by text message.

With capabilities like these, you’ll not only mitigate the impact of unpaid balances, but also offset shrinking revenues due to telehealth and other alternatives to traditional healthcare delivery that are becoming increasingly popular in the wake of COVID-19.
 
 

For More Collections and Compliance Insights and Tips

Sara and I covered a lot of ground in our discussion, including state-by-state collection restrictions and the legal risks of blurring the lines between first- and third-party debt collectors. To learn more about managing healthcare receivables and compliance risks during this crisis, and potential future crises, be sure to download your copy ofManaging Patient Receivables in the COVID-19 Era: What Providers Need to Know.”

Here are some additional collection- and compliance-related resources you might find helpful:

 

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Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2020 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

Posted by Rozanne Andersen

Rozanne Andersen, J.D., serves as Ontario Systems’ Vice President and Chief Compliance Officer. She is responsible for leading Ontario Systems’ corporate efforts and response to the CFPB’s launch of compliance examinations in the ARM industry. Rozanne's advocacy work on behalf of the credit and collection industry has resulted in landmark legislation and regulation at both the state level and the federal level with regard to the FDCPA, FCRA and HIPAA. In 2020, Rozanne was named Chief Compliance Officer of the Year (Large Company) by the international Women in Compliance Network.
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