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Collection Agencies Prepare for the Affordable Care Act in 2015

 With the start of the New Year, collection agencies working on behalf of healthcare providers have a lot to do to keep up with the requirements of the Affordable Care Act and its potential impact on their clients’ accounts.

Provisions of the Affordable Care Act in effect in 2014 included tax credits to provide more affordable care to the middle class; establishing the health insurance marketplace; increasing the small-business tax credit for employers providing health insurance; increasing access to Medicaid; and promoting individual responsibility to obtain health insurance, according to the U.S. Department of Health and Human Services.

In 2015, certain employer mandates to offer healthcare coverage will be in place. According to the U.S. Treasury Department, the employer responsibility provision will be in effect for companies with 100 or more full-time employees this year, and companies with 50 or more full-time employees will have to be on board in 2016.

The HHS and Congressional Budget Office recently estimated enrollment numbers for the Affordable Care Act by the time the open-enrollment period ends on Feb. 15, 2015. HHS predicted that 9-9.9 million people would register for insurance, while the Congressional Budget Office estimated 13 million people would enroll through the Affordable Care Act marketplaces.

Sticking to Best Practices

While the open-enrollment period continues and legislators debate potential changes to the Affordable Care Act, collection agencies are focusing on maintaining consistent service to their healthcare clients.  “I’ve heard from clients who have wanted me to completely overhaul how we work their accounts or scrutinize each step of what we do, all the way to clients who have said, ‘I’m looking to you for answers—you tell me what to do,’” said Michael Rainwater, CCAE, CCCE, IFCCE, administrator of Uptain Group Inc. in Knoxville, Tenn.

Rainwater said his agency works to be a source of consistent information while the healthcare community is bombarded with news and updates about the Affordable Care Act.  The ACA International and Healthcare Financial Management Association best practices continue to be a useful tool to help providers better resolve medical accounts.

“If a client comes to us and asks for recommendations, those best practices are what we’re using as the template for them,” Rainwater said.  The best practices, for example, outline ways to improve patient education and communication, make bills patient friendly and establish policies for account resolution.

Learning for 2015

In 2014, healthcare debt was nearly 38 percent of all debt collected in the credit and collection industry, making it the leading category of debt collection, according to the ACA/Ernst and Young study, The Impact of Third-Party Debt Collection on the National and State Economies.

In spite of that trend, collection professionals are closely watching how the Affordable Care Act and self-pay could affect their healthcare accounts in the future.  Misti Cook, a client advocate in the sales and marketing department at Cascade Collections Inc. in Salem, Ore., said as of late November, her company’s client base is approximately 70 percent healthcare collections.  Cook said Cascade Collections works with consumers on behalf of healthcare provider clients to offer solutions to pay their debt, and has a 35 to 40 percent recovery rate on healthcare accounts.

However, company executives are aware that things could change down the road as a result of the Affordable Care Act.  Cook said at times it is more difficult to collect on patients’ accounts because they may be experiencing other financial setbacks in addition to their medical debt.  According to a survey from The Commonwealth Fund released in November 2014, the amount of healthcare out-of-pocket costs relative to consumers’ income is increasing, in addition to healthcare premiums and deductibles.

The report notes that as healthcare premiums rise, many employers and individuals are selecting insurance plans with higher deductibles and copayments in an attempt to keep premium costs in check. Overall, 13 percent of people with private health insurance whose plans include a deductible now have deductibles equivalent to 5 percent or more of their income. That figure includes 25 percent of adults with low incomes and approximately 20 percent of adults with moderate incomes ($11,490to $45,960 a year for a single person).

Cook said Cascade Collections has focused on keeping up with local and national Affordable Care Act updates in order to pass that information along to clients.  “We try to train clients to communicate with patients about collections,” Cook said. “Then it’s not as big of a shock and it’s easier for them to process.”

For example, Cook said Cascade Collections offers pre-collect letters outlining that patients with a bill to pay should contact their creditor (the healthcare provider) within 30 days or the account will be turned over for collections.  Scott King, a collection consultant in Cascade Collections’ sales and marketing department, agreed that staying informed is important.  “It’s all about education and knowing what’s coming down the pike,” King said.

Rainwater said that while he sees communications or information about the Affordable Care Act coming into his agency on a daily basis, the credit and collection industry is still waiting to see how the act will affect healthcare accounts.

“Potentially there could be significant changes to when we collect, how we collect [and] charity-screening requirements,” Rainwater said. “All of those things require training of collectors and language on correspondence we send out.  As more parts of the Affordable Care Act and mandates come in to play, communicating with clients about what they want in treatment of their account holders is important.” 

Medical Debt Collection Complaints Climb

Patient complaints about the collection methods employed by medical debt collectors rose markedly during the third quarter of 2014, even as overall complaints about collection practices decreased.  In the third quarter, the Consumer Financial Protection Bureau (CFPB) took in more than 9,500 complaints about debt collection which was more than a 6 percent decline from both the first and second quarters with each quarter registering more than 10,000 complaints.

The complaint database for the CFPB notes complaints that have been sent to the Bureau that have given companies the chance to respond to the complaints but does not list complaints that have been sent to other agencies, complaints still in process with the consumer, or complaints that have not been completed.

While the CFPB complaint submission method is simple with standardized fields, consumers are prompted to choose the type of debt that prompted them to log a complaint with the CFPB.  The most common type of debt in the third quarter to merit complaints falls in the “Other” category which covers debts from health clubs, telecommunication companies, cable services and the like.  Debts from credit cards and other “Unclassified” debt were in the second and third most common debt types in Q3. 

Complaints stemming from collection activities related to medical accounts encountered the biggest change in number of complaints reported however.  In Q3 of 2014 collection complaints rooted in medical debt were at 13 percent in contrast to 9.5 percent in the first quarter and 10.3 percent in the second quarter.  In the month of August alone, more than 14 percent of the total of collection complaints were related to medical debt creating a noteworthy spike.

A recent published report called for supervision by the CFPB for large collection agencies working with medical accounts which is in direct contrast with the conclusion drawn by the CFPB regarding medical debt.  Currently, the CFPB does not include medical collection activities in revenue calculations that initiate supervision under its “Larger Market Participant” rule.  Groups such as the National Consumer Law Center, publishers of the aforementioned report, would like to see this changed with more scrutiny focused on collection agencies working with medical debt.

“That’s really the problem with using a collection vendor who has a one-size-fits-all approach to collecting medical debt” said Stacy Vink, Collection Manager at Mnet Financial.  “Patients want to speak to a collection representative who can help them decipher their medical bill and understand how the amount of patient responsibility was ascertained” said Vink.  “A collector that works with bad debt related to cars, boats and planes doesn’t have the ability to give the patient the answers they are looking for” Vink noted. 

“At Mnet Financial, we only work in the field of healthcare so our collection representatives fully understand an explanation of benefits and can help the patient to understand it as well” said Vink.  “By helping the patient to completely understand their medical bill and how it relates to their insurance policy, the collection agent can then work with the patient to find the right solution to resolve their medical debt” Vink said.

The accounts receivable management industry is now awaiting the inevitable increase in regulation with regard to the collection of medical debt.  The inclusion of medical accounts in the CFPB rule proposals for the collection of debt may someday become a reality but whether or not this comes to fruition, collection agencies working with medical debt find themselves preparing for changes in the near future.

Eleventh Circuit Clarifies That FCC’s Prior Express Consent Ruling Applies in Medical Debt Collection

On Sept. 29, 2014, the Eleventh Circuit Court of Appeals ruled 3-0 in favor of the credit and collection industry in the case of Gulf Coast Collection Bureau, Inc. v. Mais, No. 13-14008 (11th Cir., Sept. 29, 2014). At issue was the district court’s refusal to apply the Federal Communications Commission’s interpretation of the term “prior express consent” in the Telephone Consumer Protection Act.

The Eleventh Circuit ruled that the district court lacked the power to review the validity of the FCC’s 2008 declaratory ruling interpreting the term “prior express consent” under the TCPA.  The court also held that the FCC’s 2008 declaratory ruling applies to a wide range of creditors and collectors, including those pursuing medical debt.

In so ruling, the court found that the consumer’s act of providing a mobile contact number to a creditor is consistent with the meaning of “prior express consent” announced by the FCC in its 2008 ruling, and the debt collector’s calls to the consumer fell within the TCPA prior express consent exception as interpreted by the FCC. This is the first federal appellate court opinion to clarify the scope of the FCC’s consent ruling.

In the Mais case, the underlying facts provided that, in 2009, the consumer went to the emergency room while wife interacted with the admissions staff on his behalf. She provided her husband’s cellular telephone number to the admissions representative, identifying it as a residential line. The consumer’s wife signed additional paperwork for her husband, including a “Notice of Privacy Practices” that stated the hospital “may use and disclose health information about [the consumer’s] treatment and services to bill and collect payment.”

Neither the consumer nor his wife ever provided his number to any other provider/creditor related to his hospital stay. Instead, a hospital-based radiology provider electronically retrieved his cellular telephone number and other information from the hospital. After not paying the charges, the consumer’s account was forwarded to a third-party debt collector who used a predictive dialer to dial telephone numbers through automated technology without human involvement.

Using its predictive dialer, the third-party debt collector placed calls to the consumer in an effort to collect the medical debt owed. The third-party debt collector attempted between 15 and 30 debt collection calls to the consumer’s cellular telephone and left four messages relating to the debt.

On appeal, the Eleventh Circuit reversed every material aspect of the lower court’s controversial ruling.  First, the Eleventh Circuit held that district courts do not have jurisdiction to challenge FCC rulings. According to the court, district courts are prevented from issuing a ruling that is contrary to an FCC ruling even if the primary purpose of the underlying lawsuit is not to directly challenge the ruling.

Second, the court held that the FCC did not distinguish between medical debt and commercial debt in its prior express consent ruling; therefore, calls to collect medical debt should not be treated any differently than calls to collect commercial debt.

Third, the court held that the consumer “provided” his cell phone number to the creditor even though it was provided indirectly through the hospital administrator. In reaching this conclusion, the court noted that the hospital was authorized to provide the phone number to the creditor on the consumer’s behalf. The court also pointed to the FCC’s recent declaratory rulings clarifying that the “TCPA does not prohibit a caller from obtaining consent through an intermediary.”

On Nov. 1, 2013, ACA International submitted an amicus brief to the Eleventh Circuit in the Mais appeal. ACA submitted the “friend of the court” brief to support its member’s case, and to provide insight to the court with respect to how the TCPA is interpreted and applied by the credit and collection industry and why the TCPA must be consistently and predictably applied.

ACA argued that the district court’s decision not only runs contrary to the statutory scheme and results in bad public policy, it also deprives the credit and collection industry of fair notice of what the TCPA both requires and prohibits. In the Eleventh Circuit’s decision in Mais, the court not only acknowledged ACA’s amicus brief, it quoted ACA’s amicus brief almost directly when it rejected “Mais’ argument that the 2008 FCC Ruling was not an order within the meaning of the Hobbs Act.”

 ACA’s efforts to proactively support the credit and collection industry are part of the association’s Industry Advancement Program, and are made possible by funding through ACA’s Industry Advancement Fund.  More information:

Finance: Legislators Seek to Increase Transparency of Medical Credit Industry

The U.S. Government Accountability Office has issued a report on medical credit cards and related products following a request from several legislators concerned about medical debt and predatory lending practices against people who are uninsured or underinsured.

Reps. Elijah Cummings (D-Md.) and Maxine Waters (D-Calif.) as well as Sen. Ed Markey (D-Mass.) requested the report in 2013 after hearing concerns that consumers may have been misled by financial institutions offering medical credit cards and related products, including installment loans.  The GAO’s report reviews financing options and interest rates charged to consumers who use credit cards for medical expenses outside of their insurance coverage.

“Medical debt already is an unbearable burden for millions of Americans,” Markey said. “Consumers may believe they are on a path toward physical wellness when these financial products are often leading them toward financial ruin.”  Additional legislative efforts have occurred recently to address the level of medical debt in the U.S. Waters has introduced legislation that would require consumer reporting agencies to remove any information related to fully paid or settled medical debt from a consumer’s credit report within 45 days.

Waters also called on House Financial Services Committee Chairman Rep. Jeb Hensarling (R-Texas) to hold a hearing on the issue and her proposed legislation, which has not occurred.  “We need to take a close look at the issue of medical credit cards, and this report is a good first step,” Waters said.  ACA International has worked on this issue as well through its participation on a Medical Debt Collection Task Force with the Healthcare Financial Management Association. The task force developed best practices to help make paying medical bills an easier and fairer proposition for consumers.  More information:


Uncollectibles Continue to Improve, But Fall Short of Benchmarks

A separate study of hospitals’ charity care costs and bad debt shows overall quarterly improvement in uncollectible performance.  The latest Hospital Accounts Receivable Analysis survey, based on data from the fourth quarter of 2013, finds that U.S. hospitals improved their performance in uncollectible write-offs, which includes gross dollars of bad debt and charity care divided by the total year-to-date gross revenue.

However, the hospitals participating in the survey have fallen behind on meeting the overall performance benchmark of the major financial indicator.  U.S. hospitals contributing to the survey report that 5.32 percent of the total 2013 fourth quarter gross revenue was written off as charity or bad debt, a decline from 5.44 percent in the third quarter of 2013. The benchmark goal, however, is to limit charity and bad-debt write-offs to a combined 5 percent or less of total gross revenue.

Hospitals did reach the benchmark goal in the first quarter of 2013 with 4.97 percent of total first quarter revenue reported as a charity or bad debt write off.  Since then, the goal has been out of reach.  Bad debt continues to be a higher percentage of hospitals’ write-offs than charity care. Of the 5.32 percent in fourth quarter gross revenue written off last year, 3.26 percent was assigned to bad debt and 2.06 percent was assigned to charity.

Looking at the past 12 quarterly financial reporting periods, U.S. hospitals met the uncollectibles benchmark three times, according to the HARA survey.  The best results came in during the second quarter of 2011, when U.S. hospitals limited uncollectibles to 4.28 percent of total gross revenue, according to the survey.

In the first quarter of 2012, U.S. hospitals significantly reduced their uncollectible write-offs from 7.28 percent of total gross revenue to 4.55 percent.  The most recent decline in the first quarter of 2013 was from 5.38 percent to 4.97 percent.

Report: Fewer People Have Problems Paying Medical Bills

The percentage of people having problems paying their medical bills is declining, according to an April 2014 report from the National Center for Health Statistics, which is part of the U.S. Centers for Disease Control and Prevention. Specifically, the percentage of people under age 65 who were in families having problems paying medical bills decreased from 21.7 percent (57.6 million) in the first six months of 2011 to 19.8 percent in the first six months of 2013. The report defines “family” as an individual or a group of two or more related people living in the same home.

“Almost 5 million fewer people than two and a half years ago are in families having problems paying medical bills,” said report co-author Robin Cohen, a statistician with the U.S. Centers for Disease Control and Prevention, in a HealthDay News article.  According to the report, the percentage of people under age 65 with private coverage who were in families having problems paying medical bills decreased from 15.7 percent in the first six months of 2011 to 14.1 percent in the first six months of 2013. For those with public health insurance, that rate decreased from 28 percent in the first six months of 2011 to 24.7 percent in the first six months of 2013. 

It also states that in the first six months of 2013, among people under age 65, 34.3 percent of those who were uninsured, 24.7 percent of those who had public coverage and 14.1 percent of those who had private coverage were in families having problems paying medical bills in the past 12 months.  More information:

Determining the Impact of Revenue Cycle Outsourcing

Health care providers have several options when it comes to choosing revenue cycle services to outsource.  Experts in health care collections recently discussed the impact of full revenue cycle outsourcing during ACA International’s Spring Forum in March 2014.  Terry Armstrong, president of State Collection Service Inc., in Madison, Wis., moderated the session, which featured panelists Stephan Bernard, vice president of professional services for Connance Inc. in Waltham, Mass., and Gregory M. Snow, vice president of corporate solutions strategy for Conifer Health Solutions in Carmel, Ind. 

“When we talk about full outsource, this is the whole continuum of what happens in a revenue cycle from scheduling all the way through the admissions, discharge, medical records and then the billing and receivables,” Armstrong said.  Bernard discussed different pieces of the revenue cycle that a provider can choose to outsource, including scheduling, financial clearance, patient receivables management and coding. 

“You have to ask yourself the question, of these functions, which ones benefit from economies of scale [and] which ones are portable, meaning they can be centralized and possibly be moved off site,” he said. “Pretty much every hospital does outsource some component of revenue cycle management. Generally speaking, it will be highly specialized, such as charge reconciliation or clinical documentation or bad debt collections.

Most hospitals outsource bad debt collections.”  “In general it’s the question of, is this the direction the industry is going? To some extent I would say yes it is. Full service revenue cycle has established itself and it is here to stay,” Bernard said.  According to Bernard, hospitals elect to outsource services because:

• The most appropriate rationale for using full outsourcing is the core competency concept. Is the health care provider in business to manage a revenue cycle or is it just an ancillary function that frankly distracts from core competencies? For most hospitals, managing the revenue cycle is not a core competency.

• They know they need to update the revenue cycle, and they don’t have the capital to do it themselves. Using an investment partner is one of the key motivating factors in acknowledging that a revenue cycle has been left unattended for many years.

• It has come into a state of disrepair, and management has lost confidence in their ability to execute. Most often this occurs when new leadership comes into an organization, takes over, does an assessment of their own internal operations and feels they need to essentially bring in someone new who can really shake things up.

Snow addressed another aspect of revenue cycle management that can be outsourced—pre-service clearance.  “In the future, other than identification for security, the patient will be greeted and told the doctor will see them. It is to perform everything that needs to be performed … from an administrative point of view prior to the patient coming in for service,” he said. “What you’re attempting to do is make that visit 100 percent clinical in nature versus being half clinical and half administrative.”  The health care payment system is highly fragmented, inefficient and expensive to administer, Snow explained. 

“We’re looking at new payment models that are much more focused on quality, cost effectiveness and the patient experience,” he said.  Larger health care systems in one regional framework are the most interested in outsourcing revenue cycle management and viable for the process, according to Bernard.  “It’s a difficult model when you don’t have a sufficient scale and opportunity for centralization within any health system,” he said.

Scammers Keep Medical Debt Collectors Busy Validating Debt

Scammers have become masters at impersonating debt collectors.  Because of this, people today have no choice but to be suspicious when their phone rings, particularly when the person calling claims to be a debt collector.  Even when the caller seems to already have a lot of personal information, the sad fact is that the caller could easily be a swindler trying to make use of the so-called “phantom debt collector” scam or some other fake collection scheme.

Scam artists like this often pretend that they are part of the police, government agency, or a law firm, and many victims have stated that the callers are typically very aggressive in their “debt collection style.”  Some have pointed out that such fake collectors have threatened garnishment of wages, seizure of assets, and even use the threat of arrest and jail time if the debt is not paid immediately.

The Federal Trade Commission has received thousands of complaints about “phantom debt collectors.”  In fact, they have already filed four cases that involve the collection of fraudulent debt and the total loss from these cases alone have been estimated to be in the vicinity of the $20 million mark. 

The FTC, therefore, is currently advising that no matter how real a letter or phone call may seem, it needs to be checked out thoroughly.  To accomplish this, they recommend looking up real numbers to government agencies, offices and employees to prove their validity.  The FTC also warns that consumers should be suspicious of anyone, regardless of who they claim to be, particularly when they ask a consumer to pay back a debt by loading a rechargeable money card or wiring money, since there is no valid reason to request payment in such a way.

Since this is the current climate that business must continue to operate under, what should medical billers and collectors expect with regard to the normal activities of medical debt collection?  In a world filled with an excess of information, medical debt collectors should assume that a majority of the patients they speak to are aware of the latest “phantom” scam and thus, understandably, will act to prevent being scammed as well. 

“Debt collectors should expect that patients might be a bit nervous about speaking to them right now, even though the patient is aware that they recently received medical services,” said Stacy Vink, Credit and Collection Manager at Mnet Financial.  “We advise our collectors at Mnet Financial to take the time that the patient needs to validate the medical debt in question is real and that the collector that they are speaking to is legitimate and not part of a scam,” said Vink.

“Our collectors work diligently to put the mind of the patient at ease.  A patient who has never spoken to one of our collectors before and has not yet developed a rapport with them can verify with the collector key pieces of information concerning their services thus validating our collection activity,” Vink said.  “We are known within the healthcare community for being ‘patient friendly’ and always tell patients that if they have any trepidation whatsoever to feel free to check in with their medical provider first to confirm that what we are doing is on the up and up,” said Vink.

Why Hire a Collection Vendor That Works with Healthcare Providers Exclusively?

In July of 2013, the Federal Trade Commission fined Expert Global Solutions $3.2 million in what was viewed as a record-setting settlement that alleged that Expert Global, the largest debt collection company in the world, regularly violated the rights of consumers.

The complaint was filed in the U.S. District Court of Dallas with the FTC charging that Expert Global, as well as its subsidiary debt-collection companies operating under names such as Transworld Systems, North Shore Agency, ALW Sourcing, & NCO Group were harassing consumers which is illegal; particularly since many of these consumers actually denied ever owing the debt.  This was a violation of the Fair Debt Collection Practices Act.

This legislation, the Fair Debt Collection Practices Act, prevents debt collectors from contacting consumers late in the evening, in the early hours of the morning, or while they are at work.  This Act also prevents debt collectors from continually calling a consumer if the consumer has requested them to stop.  A debt collector is also required not to discuss the details of a debt collection action to anyone other than the debtor; and they must investigate the legitimacy and validity of a debt if the consumer claims that they do not owe the debt in question.

Expert Global, Transworld, NCO and its other subsidiaries regularly violated each of these terms according to the complaint filed by the FTC.  The $3.2 million civil penalty levied against the company bars the company from any future violations and requires the company to record phone calls to help prevent such violations.

“The problem that arises when using a huge corporation for debt collection is that they have a ‘one-size-fits-all’ approach to collecting” said David Hamilton, CEO of Mnet Financial.  “So whether they are collecting for auto loans, credit cards, utilities or medical debt; every consumer basically receives the same type of debt collection approach; which can be dangerous” said Hamilton.  

Debt collectors are required to abide by the rules set forth in the Fair Debt Collection Practices Act and many collection agencies do comply with the Association of Credit and Collection Professional’s International Code of Conduct.  However, those dealing with medical debt must also abide by rules set forth in the Health Insurance Portability Accountability Act as well.  But how much attention is really paid to healthcare rules by companies that mainly focus on credit card and utility bill debt?

“In order to meet the requirements of Federal Regulations, agencies and their vendor partners are going to need to be extremely knowledgeable about the rules set forth for a specific industry” said Hamilton.  “That’s why we are seeing more companies doing the opposite of what was the norm just a few years ago.  The trend used to be for a company to take on as many different revenue stream laterals as possible but now we are seeing companies becoming much more niche than ever before” said Hamilton.

“At Mnet Financial we only work with health care providers so we not only adhere to the rules and guidelines set forth by the FDCPA and ACA but also completely understand and comply with the healthcare insurance rules of HIPAA” said Hamilton.  “Being so industry specific has allowed us to produce a higher level of service for the providers that we work with as well as the patients they care for” said Hamilton.

Two-Midnight Rule Delay Doesn’t Address Provider Concerns

In October, the Centers for Medicare and Medicaid Services will begin enforcement of its new Medicare hospital admissions policy, known as the two-midnight rule.  CMS has delayed enforcement of the rule several times since last year.  Its most recent delay, in response to opposition from health care providers and trade groups does little to address the concerns of providers about the rule itself, however.

The new rule requires a physician to determine that a Medicare patient will need to stay in the hospital for two nights in order to receive reimbursement under Medicare Part A. Care for a patient who stays in the hospital for less than two nights will be identified as outpatient treatment and reimbursed under lower Medicare Part B rates.

Speaking for the Association of American Medical Colleges, which represents teaching hospitals and medical schools, senior director and regulatory counsel Ivy Baer told Modern Healthcare,

“It does not make any sense. The decision should really be based on patient need, not how many midnights they were in the hospital.”

Some Medicare patient admissions under the new rule could be subject to random audits during the moratorium, according to CMS. Contractors with Medicare will continue to select claims for review dated between March 31, 2014 and Sept. 30, 2014. 

Paid claims dated Oct. 1, 2013 through Oct. 1, 2014 will not be reviewed. However claims without payment dated after Oct. 1, 2013 but before Sept. 30, 2014 are subject to a review.

More information:




Will Your Facility and Collection Vendor be the Next to be Sued?

Lawsuits stemming from seemingly minor infractions by collection vendors are quickly on the rise in the United States. Providers who make use of collection vendors are currently under scrutiny because of communication channels such as cell phones, voicemail messages and automated dialers.

Recently, a District Court in Florida rejected a collection agency’s motion to reconsider a case that is seeking damages for a class of defendants under the Telephone Consumer Protection Act. The Judge wrote that reconsideration was “only appropriate in limited circumstances,” then pointed out that reconsideration is “not designed to…relieve a party of consequences.”

The class representative received treatment from Memorial Hospital Pembroke emergency room department. While at the hospital, the representative was treated by an attending physician. During the process of admissions, the patient filled out paperwork and provided his cellular phone number to the hospital. But the patient claims that he never expressly consented to the use of his cellular phone number being used for the purpose of debt collection.

Services obtained through this hospital in particular are billed through a vendor billing company and are later referred to a vendor collection agency if a patient’s medical bills remain unpaid. A noteworthy point is that the class representative never paid for any of the services that he had received from the hospital, therefore because he was in default his account was forwarded to the hospital’s collection vendor for collection purposes.

The collection agency used the number that the patient provided during the admissions process to collect the hospital debt that was owed by the patient. However, the phone number provided was listed under the name of a woman who was his girlfriend on the date of service but later became his wife. On June 17, 2010, the collection vendor left a prerecorded voicemail for the patient stating that they looked forward to helping them, but failed to identify that they were a debt collector.

Avoid a Lawsuit

Understanding the currently litigious climate within the debt collection field in this country, the question of how to protect a medical facility from the unscrupulous comes forth. What are some things that a facility’s business office can do to help prevent a similar situation from befalling them? A facility should start by reviewing their intake forms to be certain that patient disclosures contain properly updated verbiage.

Such a disclosure to the patient should point out that the form obtains written consent that in providing contact information, the patient is consenting to allow third party billing and collection agents to contact them by whatever means necessary. This may include, but is not limited to, home phone and cellular phone, and may involve leaving a voicemail which will include the name of the facility where the patient was treated. This disclosure should also obtain consent to use automated dialers to communicate information to the patient regarding the procedure performed at the facility.

“Mnet Financial recently added an addendum to their collection agency service agreement to include language that addresses the responsibility of a provider to obtain the proper consent from the patient upon admission into the health care facility,” said Mnet Financial CEO David Hamilton.

“The legal system hasn’t yet addressed the use of some of the newer technologies, so this has created a window of opportunity for attorneys to create lawsuits based on harmless technicalities of the billing process. Since we cater to the health care industry, we will continue to be diligent about giving our providers what they need to avoid frivolous lawsuits pertaining to patient billing and collection procedures,” said Hamilton.

While no one can truly predict what the future holds concerning business or any other aspect of life, common sense steps can certainly help reduce the risk of getting caught up in such a lawsuit. Ensuring that the facility’s collection vendor takes the issue seriously and works diligently to prevent this type of situation in the first place is an excellent place to start.

High Deductible Health Plans Irresistible to Employers

The recent trend of larger employers choosing to offer only high-deductible health plans for their employees health care coverage is growing according to recent surveys and is beginning to have an effect on the American hospital system.

The number of employers who offer only high deductible health plans has grown, particularly in the last few years according to one recent employer survey. Along the same lines, it has now become apparent that nearly 75% of all larger employers are offering at least one high deductible plan to employees during this year’s open enrollment period.

However, this trend toward high deductible plans is likely to bear consequences for both providers and their patients. Logically speaking, if patients are going to be held responsible for a greater portion of their health care expenses, the demand for disambiguated pricing data is very likely to intensify.

Another likely scenario is that provider organizations will have to deal with greater collection and billing issues that are tied to the patient’s deductible. Some industry insiders are encouraging hospitals to provide financial counseling services pertaining to patient responsibility and point of service estimates for services.

Recently many hospitals have seen an increase in the amount of patients who have high deductible plans, which is causing an increase in bad debt because of patients who only come to the realization that they have a larger portion of the cost of their care after they have already been treated.

Even though so many have moved to such plans, many hospitals still appear to be leery about discussing the increased costs of a patient’s plan before an elective surgery is provided. Furthermore, some hospitals are reporting that high-deductible policies are discouraging patients from seeking out health care services.

The hesitation to seek medical attention that patients who have high deductible plans feel is one of many issues that these plans present for patients and providers. Recent studies imply that lower income enrollees in such plans have reduced their use of emergency departments by as much as 30% in the last few years. Other studies show that men in particular are visiting hospital emergency departments much less, even in severe cases.

“The thought of patients doing without the medical attention that they need is not only tragic but completely unnecessary,” said David Hamilton, CEO of Mnet Financial. “Mnet offers financial products that are designed to help patients in need of therapies, procedures and surgeries prescribed by their medical practitioners. For instance, our online payment plan management solution allows the patient to set up a payment plan that they can afford so they can resolve the portion they are responsible to pay under their health plan,” said Hamilton.

A recent insurance enrollee survey shows that overall satisfaction with high deductible health plans is steadily gaining momentum, likely due to the lower premium costs. While the ultimate impact from the use of such plans will only truly become apparent in the future, employers are making it clear that they view them their most effective tool to control the costs of health care.

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