Medical Liens Could Hurt Your Payer Mix

July 19, 2014

If your practice accepts medical liens as part of your payer mix, it's a good idea to have a specific follow-up plan in place.

Our practice has recently encountered a situation with a few of our personal-injury settlement lien patients which prompted me to analyze the current follow-up procedure that is in place. After reviewing the process I have decided it's time to update and revamp the whole procedure.

The person who was responsible for following up these accounts had a very lackadaisical approach. She would take a fax cover sheet with the practice's letterhead and fax it to the attorney who represented the patient at the time they were seeking healthcare, every six months. That's it. That was all that was being done.

Medical liens can last anywhere from three months to three years, depending on the situation and the justice system. But this does not mean those accounts should not be followed up in a similar fashion to your other payer accounts; certainly not monthly, but at least every 60-days would be my suggestion. What has happened to us is three of the attorneys' offices actually read our faxes, and called to let us know they had not been representing the particular patient for over a year! A YEAR! We tried contacting the patients with the information we had on file, and what do you know, they're gone. Number disconnected, no longer at that address. So, now we're out several thousands of dollars because of an over-simplified follow-up system.

Here is what I would recommend:

• When patients sign the lien paperwork, be sure it states that they are required to inform you of any legal representation changes, or changes in personal contact information.

• Have a specific follow-up plan in place where a phone call is made to the attorney's office once every 60-days asking about the status of the patient's settlement, and if they need billing information yet.

• During that phone call be sure to ask, "Are you still representing the patient and do we have the appropriate contact information?"

• It is well within your right to also call the patient and make sure you are still on their radar.

• When the lien has been settled, make sure you understand who is going to be paid: your office or the patient. We had a problem with that as well: The patient went to Vegas and spent her settlement money instead of paying her doctors. Upon her return she claimed "financial hardship," but refused to fill out the proper forms. She ended up going to collections, and we saw very little of that settlement.

For the most part, liens can be a lucrative and powerful part of your payer mix, but you need to respect the nuances of such accounts. Making sure you have a solid understanding of the time frames, follow-up course, and good patient contact information can be crucial for collections.