Best Practices for Resolution of Medical Accounts Executive Summary
The goal of the report on best practices for resolution of medical accounts is to document industrywide consistent patient education and engagement strategies and practices for the appropriate resolution of the patient portion of bills related to medical services. A simplified illustration of the medical accounts receivable resolution process is described in detail in the report.
How the report was developed. In 2014, HFMA partnered with the ACA International (Association of Credit and Collection Professionals) and gathered a task force of stakeholders to establish best practices for the fair resolution of patients’ medical bills. The stakeholders represented on the HFMA Medical Debt Collection Task Force include a diverse group of providers, consumer advocates, collections agencies and credit bureaus.
The task force reconvened in 2020 to update the best practices and add best practices for modifying financial assistance policies in response to the COVID-19 pandemic and potential future public health emergencies. This document reflects the task force’s consensus on the state of best practices related to the equitable resolution of the patient portion of medical bills.
Recommendations for preservice financial communications. The report provides guidance for financial interactions that occur before a patient receives a healthcare service, specifying who should participate in conversations about financial matters, when and where such conversations should take place, and what topics should be addressed, based on HFMA’s Patient Financial Communications Best Practices and recommendations from HFMA’s Price Transparency Task Force. It also addresses the foundation for the medical account resolution process, which encompasses attitude and culture, enabling education and tools, and supportive policies.
Best practices for postdischarge resolution of medical accounts receivable. All account resolution efforts should adhere to formally documented provider collection policies that have been approved by a hospital’s board or other authorized body. Providers should make a reasonable effort to ensure accurate and complete patient responsibility for true patient balances by consistently and thoroughly screening patient accounts during initial and subsequent interactions with patients for a wide array of factors that may impact a patient’s financial responsibility, as detailed in the report.
Best practices for working with account resolution business affiliates. All business affiliates must operate under contract with the provider. The contract should specify what types of account resolution policies are permissible, in accordance with the hospital’s board-sanctioned collections policy. Business affiliates need access to relevant data to service accounts. Regular reconciliations should occur between the provider’s system and a business affiliate’s system to ensure balances are in sync. All business affiliates involved in account resolution actions are required to report patient complaints.
Post-discharge resolution process for accounts that are sent to a collection agency. When accounts are deemed a bad debt risk and sent to a collection agency, the agency must use collection methods that have been approved by the provider’s board or other authorized body. Each provider should establish a board-approved formal policy regarding use of extraordinary collection actions (ECAs), as defined by the IRS—i.e., liens, credit reporting, lawsuits, wage garnishments or sale of debt. ECAs are optional, to be used at a hospital’s discretion. Hospitals are encouraged to weigh the risk of using an ECA (e.g., potential to negatively impact patients) against increased yield resulting from the ECA’s usage. The discussion of ECAs in the context of these best practices is intended to provide guidance on the steps an organization should take prior to using a particular ECA if a hospital believes the risks are justified by the benefits. The report documents these steps in a checklist that can be used as the basis for internal controls to ensure ECAs are not used on patient accounts if all reasonable efforts to resolve a patient’s account have not been exhausted.