In a weird way, collecting on a debt is not altogether different from being a parent trying to get a child to do his or her chores. The child understands the chores are a responsibility, but getting him or her to perform the chores starts often requires some reminders and gentle prodding. In some cases, that is not enough, and the communications and interactions ramp up from there. If the child absolutely refuses to do his or her chores, then a parent is left with a decision about how to proceed.
Healthcare companies face the same decision when a patient does not pay his or her debt. The process starts with phone calls and letters and escalates from there. At the end of the line is a decision whether to file a lawsuit against a patient to force the individual to repay the debt.
Cute analogies aside, the decision to sue a patient is not one to be taken lightly. There are a lot of variables that go into making the decision, not the least of which is determining whether filing a lawsuit will lead to some payment on the debt being made.
One wrinkle that continues to influence the decision-making process is the potential for a public relations backlash if you do opt to pursue a legal collection strategy. Several hospitals and healthcare facilities have seen their names in newspapers and published reports for suing individuals for their medical debts. The articles and reports feature individuals being sued that cannot afford to pay their bills, and the emphasis is on how the judgments and garnishments that are obtained after suing lead to those people being put into a much worse financial position. A unflattering report that was issued last month (https://www.dropbox.com/s/4w13s67z5v0qf70/A%20Report%20of%20Texas%20Hospitals%20Suing%20Patients.pdf?dl=0), for example, looked at hospitals in Texas and the number of lawsuits they have filed, including some that were filed after the coronavirus pandemic shut most of the country down.
While filing a lawsuit may seem like a smart idea to recover important sums of money to help a healthcare practice stay in business, the decision is fraught with potential risks, which must be taken into consideration before deciding to move forward. There is a financial risk to suing, too, alongside the PR issues. It costs money to file a lawsuit and seek to obtain a judgment and then more time and money to recover funds even after a judgment is obtained.
Like being a parent, knowing when to use a carrot and when to use the stick in order to motivate someone, is crucial. A one-size-fits-all approach is usually not the best answer and a practice must consider all the options before deciding.
PPMS is a management system for recovery agencies based upon developing, implementing and adhering to a set of strict industry-specific professional practices and policies.
PPMS certiﬁcation, much like a SAS-70 audit, requires independent CPA attestation that an agency has in place written policies, procedures, and work processes that ensure regulatory compliance and adherence to industry best practices. The agency must also demonstrate that it has procedures in place to identify and remediate any variance from these. PPMS certiﬁed agencies are subject to annual surveillance and must re-certify every ﬁve years.
An agency that has voluntarily undergone the PPMS application and certiﬁcation process is, quite simply, a better business partner than one which has not. This rigorous process results in:
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