When you receive a call from an unknown number, do you actually answer it? Probably not. Unfortunately, that’s only the beginning of what collection agencies are up against when it comes to delinquent account collections. Consumers aren’t just ignoring collection calls and notices—they’re also taking legal action, filing complaints and lawsuits claiming violation of the Fair Credit Reporting Act (FCRA) or Fair Debt Collection Practices Act (FDCPA).
Though some of these complaints may reflect true violations of the law, Brandon Odom, Compliance Officer for Parallon’s Revenue Cycle Point Solutions, says there might be a simpler explanation.
“Some consumers have a hard time understanding why they have an outstanding account balance—maybe it was for a pathologist the patient never even saw,” Odom says. “If it wasn’t clear to them at the time of service, it’s only going to become more confusing as time passes and the account becomes delinquent. Naturally, many consumers are skeptical of outstanding balances and what constitutes their debt.”
The key, he says, is to clearly communicate expectations up front. “You can’t look at delinquent or defaulted account collections as something that only occurs 90 days after a bill is first issued. You have to combat consumer skepticism throughout the entire process. That way, if the bill gets to a collection agency, you don’t have people confused about why they are being contacted.”
Odom recommends these three steps to improve your debt validation process.
1. Make your communication process clearer—starting with consent.
When patients sign the variety of consent forms at registration, be sure that the informed financial consent prepares the patient for the revenue cycle process, especially if a third party will be involved in the billing or collection process. Odom recommends that provider consents include language informing patients that account balances may be managed by a contracted billing agent or other third-party responsible for collection of outstanding balances for services rendered by the provider.
2. Make sure the creditor name is clear on all bills and collection letters.
Providers are required to write and organize their revenue cycle communications regarding defaulted account balances such that the least sophisticated consumer can understand them. Bills and collection letters must clearly identify the creditor. Oftentimes, Odom says a bill will simply list the facility name. Even if the facility is the creditor, failure to clearly identify that the facility is the creditor may lead to confusion.
Something else that can cause confusion is a truncated or abbreviated creditor name on written communications. Billing software often employs these abbreviated facility names to account for system space or character limitations. If an abbreviated facility name is pushed onto collections communications, consumers may become confused when trying to determine who owns the debt they owe. To some people, it might be obvious that “NW MED CTR” means “Northwest Medical Center,” but to others the shortened name might not be as clear.
Clearly identifying a facility as the creditor and providing the facility’s full name on communications will help alleviate consumer skepticism.
3. Set up a timely debt validation process.
As part of the FDCPA, any patient can challenge the validity of a defaulted debt. When this happens, the creditor or agency has specific steps it must take in response.
If the consumer expresses concern that a third-party is managing collection of their debt, Odom suggests providing a copy of the provider’s signed informed financial consent form indicating that outstanding balances may be managed by a third-party billing or collection agency. A timely and thorough response to consumers’ requests for verification is essential for providing great customer service, and ultimately, assisting the consumer with resolving their debt.