Business operations: Answer these five basic questions

Q. What are the five essential questions to answer in your collection policy?
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Tuesday, October 30, 2018

A. A collection policy is the set of procedures your company will follow to ensure payment of patient accounts. To cover the key elements in your policy, answer these five basic questions:
What are your collection goals?
Always start with the end in mind, so establish your collection goals. Industry goals to consider include: days sales outstanding, clean claim ratio, open order days, hold days, cash recovery rate, denial rate, write-off rate.
How will those goals be measured?
Goals should use SMART criteria: specific, measurable, attainable, relevant and time-based. Track your workflow ratios on a daily, weekly, monthly, quarterly and annual basis. Watch trends to determine if you need to adjust your collection policy to meet your goals.
What is the collection process?
Flowchart your workflow. Identify the information to capture upfront and the payment options you will offer. Will you be flexible on your payment plans?  Define how you’ll contact the patient. What steps will you take to collect a past-due balance? Focus on automation—look for systematic ways to communicate to patients, process payments, track responses and age accounts with as little of your staff’s involvement as possible.
Who will resolve disputes?
Consider resolution specialists to handle the questions, research the accounts, determine how much should be written off, approve the write-off, etc.
When will you write off an account?
Set guidelines to determine when to label a balance as uncollectable.  Outline next steps —send the account to an outside agency or report to a credit bureau?
The answers will serve as the foundation for your collection policy. Train your staff on the procedures to create clarity and consistency within your organization. hme
Anne Orrick is COO of Allegiance Group. Reach her at aorrick@allegiance-group.com