Best Practice Guidelines: Healthcare Practice Management
13. Debt Management
Ensure that notes on the Age Analysis are updated. Approve journals. Approve and check that all information is accurate on accounts to be handed over for debt collection. Ensure that the practice receives feedback on accounts handed over for debt collection.
Follow a pre-designed debt collection cycle by completing tasks in each stage. Make notes and create tasks on a daily basis and follow up on those tasks. Contact medical aids and private patients for outstanding accounts. Accounts of 60+ days or older are URGENT accounts and must be dealt with immediately. Collect as much outstanding accounts as soon as possible to ensure healthy cash flow in the practice. Hand over outstanding accounts for formal debt collection. Journals must be posted to the correct Ledger accounts. Send patient outstanding accounts by email or sms.
Investigate the Age Analysis report on a regular basis. Ensure that the Credit Controller follows up on outstanding accounts and accounts were handed over correctly. Ensure that correct journals were done, and documentation is correct.
Purpose of Debt Management
Debt Management is the effective control and administration of patient accounts. It is vital for the financial survival of the business to prevent bad debt and promote a healthy cash flow by collecting outstanding accounts from medical aids and private
patients. The longer accounts are outstanding, the less likely it is that outstanding fees and expenses will be collected.
The Planning Process
To ensure a successful Debt management some processes must be in place in the practice. The practice manager, bookkeeper and credit controller can decide on the following procedures that must be followed by the credit controller:
Business process design
The business needs to decide on the process that must be followed for Debt collection, for example:
- When and who are allowed to post journals
- The correct collection cycles and steps that needs to be done
- Must the cycles work from Capture date or Transactions date
- Person/Persons responsible for each cycle
- Credit controller per Age or per Medical Aid layout, will the outstanding amounts be divided between the credit controllers by Medical aids or per age on how long the amount is outstanding. One person can be responsible for the total outstanding book.
- Decide what sms, emails, front page and final demands you want to use with each step and set it up beforehand.
- How long the account will be outstanding before handover
- Will the practice do handovers to the attorneys and who the attorneys are
Example of important steps and messages that can be used:
- Every patient should receive an account after discharge or treatment at the final billing stage of the account.
- Within the first week after every month-end all unpaid accounts on the GoodX system needs to be be printed and posted / e-mailed to patients:
- For all accounts in 30 days and older, there should be a message on the account stating the following. “This account is now considerably overdue, urgently follow up with your medical aid. We have no alternative but to hold you responsible for the payment of this account if it is not paid in full by your Medical Aid within the next 15 days.”
- For accounts where the medical aid short-paid, the following message should appear on the accounts: “Your medical aid did not pay your account in full. Please settle the balance within the next 15 days”
Collection cycles are the time frames that are decided on when a certain action must take place from the service or transaction date, for example:
- 10 days outstanding - SMS must be sent
- 15 days outstanding - SMS must be sent
- 20 days outstanding - EMAIL must be sent with statement
- 25 days outstanding - Phone call must be made
- 30 days outstanding - Phone call, SMS and Email
- 40 days outstanding - Final Demand
- 45 days outstanding - Handover
GoodX can assist in the configuration of the setup that must be followed by the practice to ensure correct Debt management. Configuration can also be part of the working process. If the practice notices that the process is not working as planned and they can adjust it.
Credit Control Assistant (CCA)
- In a medical practice, providing comprehensive healthcare to people is not the only important function that takes place. An equally important function, which has an effect on the financial survival of a practice if not managed efficiently, is the effective control and administration of patient accounts.
- GoodX's Credit Control Assistant assists the practice to manage the business processes within the practice that are associated with the collection of outstanding debt from Medical Aids and / or patients.
- The function will be used for assisting in Credit control / Debt collection. SMS, Emails and cycle steps are pre-defined.
- The CCA keeps all communication in connection with the account of the patient between patient / medical aid and practice.
Critical Steps of Debt Management
The following steps need to be followed on a daily/weekly and monthly basis to ensure the most successful debt collecting process.
Process Audit (Steps 1 - 4)
Ensure that all transactions were billed to the patients account before claiming. Check that all patient billing is up to date and that no files are misplaced.
All claims must be up to date. The debt management can not start if the claim administration chapter is not done. Ensure that all claims have been submitted. Reverse, Redo, Resend and Resolve where applicable.
3. ERA/RA/Patient Receipts
All ERA’s (Electronic Remittance Advice), RA’s (Remittance Advice), and Patient receipts must be up to date and posted to the accounts. This ensures the correct outstanding amount to reflect on the account. The correct dates must be used in order for the outstanding accounts to be under the correct age. Please follow the Receipting chapter for more detail. Confirm that the patient is aware of the outstanding amount that was not paid by their medical aid.
4. Unlinked Receipts
Draw the unlinked receipt report and confirm all receipts has been posted. This will ensure the correct age and that the correct invoices are followed up on.
Account Clean Up (Step 5)
5. Journals & Journal Actions
Journal Actions are set up to only post as Credit or Debit amounts. The employee will not be able to manually use a plus or minus, the action will be set up to use the correct plus or minus according to the settings. Journal actions is linked to the correct Ledger account. The description is fixed. Management will decide on the Journal actions and the personnel will only choose the correct action to use.
The following journal actions can be pre-setup, and are used for the following:
- Small balance write off
- Settlement Discount
- Bad debt write off.
It is advisable that small balances and bad debt is regularly written off so the primary focus can be given to the collection of money that can be collected.
Collection process (Step 6 - 9)
The following steps can be part of the CCA function or part of the manual process in the practice.
6. Invoices Outstanding Report
- Invoice outstanding report will indicate all the invoices that still has an outstanding amount on the Invoice. This is Invoices where a receipt was done but not for the full amount of the Invoice. Ensure the correct invoices are on the report and none of the invoices on the report are already paid in full.
- The Invoice outstanding report can be grouped by days outstanding. Contact all patients with outstanding invoices that doesn't have an arrangement with the practice for paying the outstanding money.
- Contact the Medical aids that are 30 days+ outstanding and follow up why the Invoices has not been processed for payment and the reasons for non payment.
- Ensure all notes are done and up to date on all the outstanding invoices, and all the calls have been logged.
- Debtor Statuses can be linked to Debtors that have overdue accounts or have payment arrangements with the practice for paying off the outstanding amounts in installments.
7. Age Analysis Report
- The Age Analysis report is used for showing all the outstanding accounts, Medical Aid and Patient outstanding accounts.
- The Age Analysis report will indicate all the accounts with an outstanding Amount/s. The report can be drawn in different ways to display the information, for example grouped by medical aid or grouped by service centre. Filters can be applied on amounts or the age the amounts are outstanding.
- The age analysis must always be drawn not equal to zero to include the accounts that's in credit too. Accounts that's in credit must be followed up on to confirm if the amount must be refunded or kept for the next visit.
- The practice can send out SMS’s directly from the age analyses to the patients, with pre-setup sms templates with the necessary information.
- Remember to save all notes and conversations that occurred between the practice and the patient.
Communication is the most important part in debt management. Without communication debt collection can not be done. Communication consists of sending SMS’s, Emails or making Phone calls. Statements can be added to the emails that are sent to the patients.
Statement runs can be used at a certain cycle to ensure the patient has the details of the outstanding account and practice banking details.
The Notebook is used internally to keep track of accounts and any communication between the practice and the patient. SMS and Emails that were sent from GoodX to debtors will automatically be logged in the Notebook.
SMS / Email History
- SMS - Short Messages Service.
- EMAIL - Electronic Mail
- SMS / Email History is a screen that shows all the SMS's / Emails that were sent to a cell number / email address. This is the Management screen of sms and emails to show which SMS and emails were sent.
- The screen will also show all the SMS’s and Emails that failed to send or were cancelled.
Telephonic Credit Control – Medical Aids
If a medical aid account has not been paid within 30 days after the electronic submission, the practice needs to follow up on a two-weekly basis. The practice needs to phone the medical aids to get confirmation of the following:
- Did they receive the account electronically?
- If yes – when can the practice expect payment, what is the cause of the delay?
- If no, resubmit via EDI again.
- Always make notes on the system of all conversations with medical aids.
Use the same opportunity to do your queries on short payments and any other uncertainties.
- The notebook will keep track of all SMS and Emails that were sent from the system.
- All communication between the patient or medical aid and the practice must be documented on the notebook.
- The notebook can be printed out and used in cases when the outstanding amounts must be handed over.
Remember if there are no notes, the action did not happen.
Debtor Statement Run
- After all billing, receipts and corrections are done.
- Debtor statement run can be used to create all the statements with outstanding patient accounts
- The statements can be sent to all the patients that have email details captured in their demographic data.
Check the error messages of the statements that we’re unable to send.
9. Bad Debt Administration
Before an account can be handed over for legal action the following needs to be in place:
- Notes on GoodX which serve as proof that all necessary credit control actions has been performed
- Print the detailed account
- Complete a Bad Debt Hand Over Form and ask the Practice Manager to sign it off
- The Bad Debt Hand Over Form should contain the following information:
- Name and Surname of the Guarantor.
- ID Number
- Patient account number
- Amount to be handed over
- Reason why account is being handed over
- The correct information the Debt collecting firm needs must be included. Each firm will need their own documentation for the handover process.