Hatch-Proof Your Collection Processes

Cash flow is vital to your corporate well-being. So is providing the best customer care and service. Doing both well, takes sound processes, the right customer philosophy, and carefully choosing your outsource business partners.

No doubt that if you are a Minnesota resident you’ve recently heard of our Attorney General Mike Hatch’s investigation into how the medical industry provides charity care in Minnesota. Along with that investigation, collection practices of medical facilities and of their collection agencies have come under scrutiny as well. In fact, there are bills being offered in our state legislature right now (S.F.1010 and H.F. 1088) that would change Minnesota garnishment law and how creditors can recover money owed them (medical or otherwise). These bills have been introduced because it is popular belief that consumers are not getting a fair shake in the collection process and that their rights need to be protected.

Regardless of how these bills progress and whether or not they pass (and there is much debate on that as of this writing!), there are some takeaways that bear noting. First, be sure you have a written credit policy that has been created with all stakeholders in mind (patients, physicians, business office and legal council). Without a policy to base your processes on, it’s a sure bet you won’t treat patients in a consistent manner.

Second, medical facilities who are obligated to take charity-care write-offs should be as proactive as possible in determining those patients who may qualify. This will not only provide the patient with a valuable service but help prevent accounts from being charged off and sent to a collection agency when there is no hope of recovery, which generally only results in more stress added to the situation.

Third, it’s imperative that both the medical facility and collection agency understand each others processes completely. This will reduce the likelihood that accounts will be handled incorrectly or end up in the wrong follow-up bucket. Bad debts need to be separated from all other accounts where another form of follow-up or research is required. This follow-up, whether outsourced or not, should then be tailored to the unique situation of each patient.

Next, follow-up procedures on accounts should adhere closely to policy and should always allow for “doing the right thing”. Just because a process is legal does not mean it is logical. Pay close attention to not only the processes your collection agency uses but also the attorneys they sue accounts through, if you litigate accounts. It’s imperative that their processes mirror the collection philosophy of your medical facility. Collection agencies and their legal council are not all the same. Work with people who are eager to serve your patient base well and who share their work standards and processes openly.

By employing sound collection processes, you’ll maximize your collection cash flows while producing more win-win outcomes with your patients.

Mark Neeb is President and CEO of The Affiliated Group, an 81 year-old Minnesota-based accounts receivable management company.  He can be reached at 800.264.2448 or mneeb@theaffiliatedgroup.com.

The Affiliated Group

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