Collect from patients without breaking the law

August 3, 2018

Collecting money from patients is a part of practicing medicine. Here’s how to do it legally.

You’re probably on top of HIPAA regulations and the rules and regulations surrounding your payers. When it comes to collecting payments from patients, however, many medical practices are not as aware as they should be of the many ways you can run afoul of the law.

Know credit card law

Virtually all practices these days accept payment by credit or debit card. It’s simple enough to arrange with your bank to do this. It’s not so simple to be sure that you’re doing it legally.

Any business or organization that accepts or processes electronic payments is subject to the PCI DSS (Payment Card Industry Data Security Standards). The PCI regulations, as they are typically called, are not particularly onerous or confusing. However, you do need to know what they are and be sure your practice is in compliance, and that means making sure the third party that processes your cards is up to data and in compliance.

“It’s important to get that [compliance] in writing,” says Barbie Hays, coding and compliance strategist for the American Academy of Family Physicians.

If you accept credit card payments via your portal, making sure your portal is secure is not enough. “Even though it looks seamless, payments still go through a third party,” says Hays, “so be sure that website is safe and secure, and the third party is up to date as well.”

Know debt collections law

Collecting from patients who don’t pay in a timely manner raises another set of issues. The Fair Debt Collection Practices Act is a federal law that provides protections to individual consumers from debt collection practices by third-party debt collectors. If you hire a collection agency, you need to make sure that they adhere strictly to this law.

Hays points out that fair debt collections laws vary by state, and many are far more stringent than federal law, so be sure to check to see what your state requires and forbids when it comes to collections.

“If you are a multi-state practice and/or your collection agency is in another state, get it in your contract that the agency adheres to the states’ laws in the state or states where you practice,” advises Hays.

Kenneth Hertz, FACMPE, principle consultant at Medical Group Management Association (MGMA) Health Care Consulting Group, stresses due diligence when selecting a collections agency. “You don’t to work with a collection agency that is one of those knee-breaking outfits,” he jokes. “There are some bad firms out there. Interview your agency and check out their references. You have to be careful because in addition to legal issues, a bad collection agency can make your practice look bad.”

Know when to let go

Sometimes you have to drop patients who simply do not pay their bills. Nobody expects you to work for free, but if you don’t handle this carefully, you can run into legal trouble here, too.

“You can release a patient due to financial burden on the practice,” says Hays, “but in most states you have to give a 30-day written notice during which time you continue to see the patient on an emergent basis.” What is and isn’t an emergency can be fuzzy, though, so Hays says it’s probably best to see the patient “even if it’s just a splinter in a finger” until the 30 days are up.

Your practice can’t stay afloat if you don’t collect what’s owed to you. But if you want to stay out of court, you need to make sure you understand and follow the law.