Debt Recovery

Insurance companies often make over-payments to subscribers and medical providers by mistake. These errors are caused due to duplicate payments, pricing changes, oversight by the accounting department, fraudulent claims or insurance coverage changes. These claims where an insurance company is entitled to a refund are called Insurance Recoupment, Insurance Payback or Takebacks.

These incorrect payments are incredibly hard to recover and often require the involvement of a Debt Collection Agency. Over-payments cause millions of dollars of losses and write-offs for insurance companies annually.

The insurance company has the right to request a refund for the excess money that has been disbursed. States laws vary, but insurance companies must act quickly as many states put short time-frames for an insurance company to request a refund (Statute of Limitations).

Sometimes insurance company recovers money by reducing future payments, also known as offsetting.

Recoupment is one of the best ways to increase profitability and cash flow for an insurance company. Hiring a Collection Agency after 60-90 days if in-house efforts to recover the money have failed can limit losses on such accounts.

If you need an experienced collection agency for insurance recoupment or takebacks –  Contact us

When a third-party collection agency contacts an insurance company, the insurer is reminded of its obligation to pay claims promptly. Failing to resolve medical insurance claims on time can result in a violation of state law.

Once an insurance company receives a collection notice from a professional collection agency, they are under pressure to act fast.

These laws and payout periods vary from state to state in terms of operation, complexity, and severity. However, they all share the common goal of compelling insurers to promptly and fully pay all legitimate claims. Debt issues in the BSFI market are anticipated to grow significantly over the next 10 years.

Non-timely reimbursements is a leading cause of stress and burnout among medical professionals, then why not outsource unpaid medical insurance claims to a professional agency and get paid faster.

Examples of “prompt-pay statutes” law in some states.

Texas Insurance prompt payment statute:
The Texas Prompt Pay Act (“TPPA”) is codified in the Texas Insurance Code as Subchapter J of Chapter 843 (governing health maintenance organizations (HMOs)) and Subchapters C and C-1 of Chapter 1301 (governing preferred provider organizations (PPOs)).

California prompt payment statute:
California Health & Safety Code 1371. A health care service plan, including a specialized health care service plan, shall reimburse claims or a portion of a claim, whether in-state or out-of-state, as soon as practicable but no later than 30 working days after receipt of the claim by the health care service plan, or if the health care service plan is a health maintenance organization, 45 working days after receipt of the claim by the health care service plan.

Florida Insurance prompt payment statute:
Florida statute 627.6131, otherwise known as the “Prompt Pay Statute,” requires insurance companies to make decisions and pay out on claims quickly. The timeframe created by this legislation depends on how the claim was received, either electronically or physically.

New York State prompt payment law health insurance:
Law § 3224-a (McKinney 2000) requires payment of health claims by health insurance companies within 45 days of receipt of such claim; N.Y. Ins. Law § 5106 (McKinney 2000) requires motor vehicle no-fault providers to pay health claims arising from vehicular accidents to be paid within 30 days of receipt of such claim.

North Carolina: 30 days for payment or denial.

North Dakota, Georgia: 15 days

Ohio, Oregon, Delaware, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Montana, Nevada, Wisconsin: 30 days

Oklahoma, Colorado, Pennsylvania, Missouri, Nebraska, Vermont, Virginia, Wyoming: 45 days

Alabama, Arkansas: 30-45 days

Arizona: 30 days after the claim is approved

Louisiana: 25 to 45 days

Mississippi: 25-35 days

( days refer to “working” days)

References:
www.tlrfoundation.com/sites/default/files/pdf/TLR_Prompt_Pay_PDF_V01.pdf
danahyandmurray.com/florida-prompt-payment-statute/
www.dfs.ny.gov/insurance/ogco2002/rg207242.htm

Are you trying to shortlist a Collection Agency by looking at their Google reviews or Yelp rating? According to inc.com – 88% of customers read an online review, influencing their buying decision. But, a single bad review can undo the value of 40 good customer experiences.

Those online review methodologies work well for restaurants and doctors, but the same criteria does not work well for the Debt Collections industry.

• Most negative reviews are left by debtors who hate debt collectors anyway. That is because the Collection Agency recovered some money from them, which they were not planning to pay.
• Some disgruntled employees who could not adapt to the pressure of being a Debt Collector leave a negative review about the job or the workplace. Maybe they could not make enough money as a debt collector and left a negative online Google review.
• Many clients submit highly disputed debts to a collection agency and expect that those debts will somehow be magically recovered. If a debt is highly disputed or too old, even a collection agency may not be able to recover those. No collection agency will recover 100% of the debts assigned.
• Satisfied people are often thankless. Not many clients who get good returns take the pain to leave a review for a Collections Agency on Google or Yelp. No one wants to publically announce online that they use the services of a collection agency. Some clients leave positive reviews because their Collection Agency Rep requested them to do so. Dissatisfied customers are more vocal, and so are the debtors.
• Competitors may intentionally try to plant fake negative reviews to sink the business of their rivals.
• Many businesses, including collection agencies, often hire “Reputation management firms” and professional marketing firms to ensure good online ratings, which has almost nothing to do with the real recovery rates of that collection agency. They attempt to game the online review system.

We are not saying there is no way to gauge a collection agency, but due to the nature of the job they perform, they simply cannot be evaluated by general public reviews.

Many people from the accounts receivable industry crack jokes by saying that it is quite possible that a Collection Agency with horrible ratings on Google could be the best one (since it recovered so much money, it landed up annoying too many people). We are not recommending you use this judgment criterion either.

Many agencies that are rated higher on Google do so by requesting their employees, friends and only satisfied customers to leave 5-star reviews and thereby artificially raise their ratings. Unlike sites like Amazon,  where we have a “Verified Buyer” tag next to a review, generic online reviews like those on Google/Yelp have no way to know whether the reviewer has even used a service or if the reviewer is a debtor, employee or someone else. Therefore these reviews are subjected to manipulation.

Some agencies simply push their ratings higher to take advantage of Search Engine Optimization. However, some agencies are genuinely rated higher, but we are talking very broadly. Better Business Bureau (BBB) ratings are a lot more reliable.

The right way to gauge a collection agency is by their recovery rates, product offerings, adherence to the debt collection laws, and the experience of their management and staff.

The medical industry uses Collection Agencies a lot. May you have a friend who is a doctor, he can recommend a good collection agency.

References:
www.inc.com/andrew-thomas/the-hidden-ratio-that-could-make-or-break-your-company.html

Minimizing the accounts receivable has become extremely important for the Car Rental industry. Chargebacks, vehicle damages, fuel charges, tire damage, one-way drop-off, and parking tickets are common issues that rental car companies face.

Online ride-sharing services already present enormous growth challenges for the industry. Therefore losing money to unpaid bills further impacts the cash flow.

Car rental companies like Enterprise Rent-A-Car, Hertz, and Avis have been fiercely competing with Uber, Lyft, and Turo, which are genuine businesses but probably have an unfair business advantage due to low operating costs and taxes.

Leaving money uncollected from past-due accounts is like leaving money on the table. An effective accounts receivable strategy is vital to survive, and Debt Collection Agencies play a critical role in recovering outstanding debt for car rental companies.

Statistics indicate that accounts over 60-90 days past due should be promptly transferred to a collection agency for a better recovery. Collection Agencies can recover money most effectively with their vast pool of resources and partnerships. They will efficiently collect money from lease breaks, repossessions, damages, and credit card chargebacks.

Equipped with advanced Skip Tracing services and a collection staff that recovers money all year long, they utilize services like Collection letters, Collection calls and Legal suits. They follow a multi-step approach to recover money from people who have defaulted on their payments.

Collection agencies collect money empathetically and diplomatically by following federal and state collection laws. This will give you much-needed money for growth and transforming your fleet to EV’s as the times change.

Overdue accounts receivable for the Laundry and Dry Cleaning Service industries is an ongoing problem. Hiring an in-house person to deal with accounts receivable, even with prior experience in the collections industry is still not all that effective because collections are still being done under the name of your laundry company instead of a professional collection agency.

Fact: Customers are incredibly concerned when recovery is initiated under the name of a debt collection agency. They were not so serious when recovery was being made using your own Company’s own name.

Additionally, collection agencies enroll for expensive “Scrub services” for “Change of Address“, “Bankruptcy” and “Litigious Customer” checks. Enrolling in these services for a standard entity like a Laundry Company is not practical because these Scrubs are too expensive per account. Collection agencies buy these subscription services, and these scrubs are cheaper for them.

Creating internal aging reports, monitoring accounts for delinquency, and follow-up with overdue invoices works well for the first 90 days. Beyond that, there is no point in pursuing recovery under your own name. If a client has not paid in 90 days, what is the possibility that they will pay any time soon ( or ever)? Extremely low!

Collection agencies are licensed and bonded, so if a counter-lawsuit arises, their insurance policy almost always covers lawyer fees and damages filed by the client. They keep their staff up to date with constant changes in collection laws, something which an in-house employee of a laundry company cannot keep up with because he works pretty much in solitude.

Delinquent customers are fearful of an account getting transferred to a Collections Agency. They are concerned that their account could be reported to a credit reporting agency and possibly be transferred for a legal suit. For accounts with higher balances, a collection agency will likely forward the account to one of their national network of attorneys to file a lawsuit.

You cannot win a football match by hiring a single player; you need a full team with varying roles to achieve the desired results. A Collections Agency works as a team, with each debt collection department playing a different role.

In short, an in-house staff has little chance to compete with the recovery rate that a collections agency can achieve. If you include the salary of your in-house employee, printing costs, benefits, mailing, follow-up and all the hidden costs, a collection agency turns out to be a lot cheaper and more effective choice.

Collections agencies have been recovering money for their clients for decades. Almost no one can beat their efficiency and cost of collecting the debt.

Check here: Cost of hiring a collections agency

Debt collection agencies play a vital role in managing the accounts receivable of drugstores.

The in-house staff of drugstores has excellent knowledge about medicines and other core responsibilities required for the smooth functioning of the pharmacy. However, they are not experts when forced to become part-time debt collectors, calling patients to make a payment on their past-due bills. Therefore these overdue bills are often overlooked or not given a proper follow-up.

Collection agencies have been serving the drugstore and pharma industries for decades. Typically, those accounts which are not paid in full are transferred to a debt collection agency after 60-90 days of non-payment.

Collection agencies send five diplomatic letters to recover the money from the patient. If the amount is still unpaid, it is moved to the next step, where an expert debt collector calls the customer and attempts to recover money diplomatically yet firmly. Your collection agency must have a proven track record of working with pharmacies/drugstores and must be able to provide references if requested. Free credit bureau reporting can be done once the debt is 180 days old.

Accounting and bookkeeping are some of the most challenging tasks of running a pharmacy. Insurance companies themself use third-party prescription software like Express Scripts which are billed when a prescription is filled, these need to be taken care of at the pharmacy, then check if the payment was processed or denied or if a co-pay is required. There are days when only one person (the pharmacist) is available at the pharmacy. Apart from core responsibility, the pharmacist also needs to have a deep understanding of the billing system. Some patients even transfer their prescriptions or get a new prescription to avoid paying their bills. As per federal law, medical debts cannot hit the debtor’s credit report before the debt is 180 days past due. Additional rules have been recently imposed by credit bureaus themself.

Pharmacies should enforce that the patient must sign a “charge account contract” if they are not paying in full. This document can be very beneficial during the collection process.

While pharmacists concentrate on running the pharmacy, a collection agency will collect money from accounts receivable, saving significant time and resources. Apart from being HIPAA compliant, they must maintain a professional and positive approach.