Cash Money

The Fair Credit Reporting Act impacts every business. This is because the FTC requires businesses to report accurate information about debtors who owe money. Every business owner responsible for handling internal debt collections needs to understand The Fair Credit Reporting Act.

Companies that fail to heed these laws could be risking costly fines. In some cases, debts owed to them could be discharged. Debt collection can be a difficult process, but it is very important for any business handling debt collections to fully understand this law.

Understanding The Fair Credit Reporting Act

The Fair Credit Reporting Act states that consumers have the right to verify the accuracy of the information contained in their credit report. It also says that businesses are responsible for ensuring the accuracy of the information contained in these reports to the best of their ability. It is imperative that businesses understand how this affects debt collection.

If your business receives a complaint from one of the national credit bureaus (Equifax, Experian or TransUnion), you have a 30-day period to verify the accuracy of the alleged debt owed, or it has to be removed off the individual’s credit report, as per The Fair Credit Reporting Act.

As it relates to debt collection, it is very important to understand The Fair Credit Reporting Act. Should you file an inaccurate claim, you could face legal fallout if done so intentionally. In addition, the FTC can limit your ability to file future claims.

The Fair Credit Reporting Act works to the benefit of your business as well. As long as information about the debt is reported correctly, it should be used by the business to make sure other businesses know of this individual’s failure to pay their debt. Other businesses will certainly want to know what to expect from a potential customer before working with them.

More Important Facts

For any business responsible for debt collection, much needs to be known about The Fair Credit Reporting Act. If they provide consumer information to the credit reporting agencies, they are also responsible for submitting only accurate information. These laws have been recently updated to expand the rights of consumers.

Consumers have the right to know what is contained in their credit report. They can file a request with the credit reporting agencies. During that process, if it contains any information deemed inaccurate, such as missing or wrong account information, debt collection activity, or erroneous history, the business has to offer proof of the accuracy of the debt, or it has to be removed from the credit report. The Fair Credit Reporting Act places this burden of proof on the business claiming the owed debt.

Negative, but accurate, information can stay on one’s credit report for up to seven years. Bankruptcies can remain up to ten years. Some information can remain much longer, such as criminal convictions, information related to consumer job applications with salaries over $75,000.

Also, explore more important facts and resources about debt collection laws, in addition to collection agency options.

Medical billing collections is increasing in usage, as many physician practices, medical clinics and hospitals face ever-growing past due debts from slow pay patient delinquencies and backed up insurance claims.

With nearly 47 million Americans not having any private health coverage, a sluggish economy caused by a recession, as well as increasing unemployment, spells diminishing positive cash flow for medical practitioners.

Given that, there are a number of things you can do to improve your internal medical billing collections. By implementing these six tactics, you can greatly improve your financial bottom line.

1. Make sure you have a clear terms of payment procedure visibly posted at the front of the office. New patients need to clearly understand what they’re expected to pay upfront, regarding co-pays, etc. This needs to be clarified BEFORE service is rendered.

2. Its vital to collect ample and accurate client information at the first visit to the doctor’s office. Gather the patient’s full name, birthdate, address, work, home and cell phone numbers.

Gather their employer information: address, phone number, work title, supervisor, etc.

The point is the more information you can get here, the better. While some patients may be hesitant about giving their social security number, its still a good idea to ask for it, in the event the account has to be later turned over to a collection agency.

3. If the patient has private health insurance, its important that you verify coverage at this point. The hectic pace of the doctor’s office during peak times shouldn’t be an excuse for ignoring this crucial step. Verifying coverage here will save you, and your staff, many headaches later.

4. In the initial patient application, you need to detail clearly the patients’ responsibility to pay. You might also want to consider adding language that in the event the account is turned over to an outside collection agency for lack of payment, the patient will be responsible for collection costs.

In some states, the medical practice can recover their expenses for hiring a collections agency. But it has to be stated in the original patient-signed application at the beginning. (Be sure to check with your attorney about this, as state laws vary)

5. Allow patients to make payment arrangements for those going through financial difficulties. Because so many are either uninsured or under-insured, making reasonable payment arrangements via installments gives them more options, and greater peace of mind. It will also help generate cash flow to your practice.

6. Know when to turn over delinquent accounts to a debt collection agency. As mentioned earlier, lack of health insurance, rising unemployment and a recession has placed greater financial strains on some patients ability to pay for health care.

Most people want to do the right thing and pay their debts. But let’s face it: others are less responsible. By implementing the before-stated procedures, you can better identify the patients going through temporary financial straits. Payment arrangements, and continual communications can address those problems.

However, the non-paying, more difficult clients need to be identified earlier as well. These are the accounts that should be outsourced to professional collection agencies, since they are better equipped to work with these types of accounts.

Failing to do so means wasting valuable time, labor and money dealing with difficult accounts. You can’t afford to waste time here, because the longer an account goes unpaid, the lesser the likelihood of getting paid at all. By placing these accounts earlier, you greatly increase your opportunity for getting a great deal, or at least some of your money.

A good general rule thumb you should observe is after 90 days of no payment, medical billing collections should be outsourced to an outside collection agency.

These procedures are simple, but they’re very important. And they can prove very effective in reducing your medical billing delinquencies. If you put these into consistent practice, you will greatly improve your medical billing collections.

David P. Montana is a documented specialist, business organisation business advisor as well as contributor in the subject of debt collection services. He offers further information and strategies relating to medical billing collections.