April 26, 2017 Newsletter

4 Most Common Mistakes Clients Make When Listing with a Collection Agency

Making the Wrong Person Responsible for Bill

Who is NOT responsible for a bill?

• Children under the age of 18, at the time of service
• Parties who are not the biological parents of minor patients (exceptions may apply)
• Parents of adult children (18 or over, at the time of service) who still hold the insurance

Who IS responsible for a bill?

• Patients or customers who sign documents stating they will be held financially responsible
• Anyone 18 or over, at the time of service
• Both parties of a divorce situation so long as they were married at the time of service (Wisconsin marital law; exceptions may apply)

Charging Unlawful Fees

Contrary to popular belief, there is a difference between a LATE CHARGE and  FINANCE CHARGE. Who can add these charges and how much can be charged is outlined by the Wisconsin Department of Financial Institutions, but here is a quick breakdown.

Late Charge

• Signed agreement, prior to services, which states how much will be charged if payment is not made by specific date
• Patient or customer cannot add more charges to the already past due account
• Maximum rate allowed to charge as a late fee is 1% per month, or 12% per year

Finance Charge

• Balance is a result of a credit transaction. Examples:
  • Consumer and student loans
  • Single-pay notes, where interest is assessed
  • Checking account overdraft protection programs
• Extended period of time is granted to pay an account and balance is not past due so long as payments are current
• Disclosures are given to customer prior to first payment
• Agreement is signed prior to services regarding the terms

Not Disclosing Attorney Information

If you know a patient or customer is retained by an attorney, you must disclose this information (attorney name and contact information and why attorney is retained) to your collection agency. If a party is retained by an attorney, the collection agency cannot contact the party. All communications must be made to the attorney.

Listing an Account that is Under Bankruptcy

If your office has been notified that a customer or patient has filed for bankruptcy, your collection agency needs to know. Depending on the type of bankruptcy, the account may not even be collectable. In addition, all communication would have to be made with the attorney handling the bankruptcy case, rather than with the customer or patient.