Click here to download the transcript.
Disclaimer: The following is an actual transcript. We do our best to make sure the transcript is as accurate as possible, however, it may contain spelling or grammatical errors. We suggest you watch the video while reading the transcript.
Greetings, friends and colleagues. It’s Sam Collins, the coding and billing expert for chiropractic. You as a professional. Of course, most importantly, and of course with ChiroSecure and HJ Ross. A lot has been said over the last few months this year really on what’s going on with credit reporting and medical debt collections.
I want to give you an overview of that and also start you set to set yourself up for some best practices. So let’s go to the slides. Let’s get right into it. Let’s talk about what’s going on with collections of medical debt and credit reporting. Obviously medical debt can be an issue and a lot of us use credit reporting as a way to get patients to pay their bill.
Click here for the best Chiropractor Malpractice Insurance
However, as of January 7th, this year, the Consumer Financial Protection Bureau finalized a rule that said that you will ban medical bills from being reported on credit reports used by lenders. So it was a way of protecting people. I think in many ways a pretty good thing. ’cause sometimes medical debt, particularly on the medical side.
Chiropractic. Is it that big? Probably not, but I think it was always a tool that we had. It prohibits lenders from using this now to go against a person’s credit, reporting to get a loan, things of that nature that was helpful though, because on our end, if we did report that in order for them to get that off of their credit report, they’d have to pay the debt.
Get a Quick Quote and See What You Can Save
So it was one of those little things that was a tool in our tool belt to force that. And what they’re saying now is, Hey, January 7th, we’re not going to allow it. But hold on. In July, the federal court in Texas vacated the rules. So you’re thinking, okay, so now can we do it, can we not? Technically, federally.
The rule is moot. So therefore, unless your state has a rule, then you don’t have to worry about it. You can continue to report to the credit bureau, such as Equifax and so forth. However, let’s keep in mind that’s the federal rule. There are still gonna be some state level legislation that can do it, and numerous states have enacted loss to curb medical debt reporting.
So pay attention. I’m gonna give you what those states are, but also just let’s maybe avoid getting ourselves in this place. To begin with, so California in implemented it January 1st, and it has nothing to do with the federal law. A provider of medical services can no longer report that debt. To a credit bureau.
In fact, the credit bureau won’t accept it, frankly. So if you send it, they’re just not gonna take it. And what California did also is require a statement on financial agreements that says we can’t report the medical debt. So that kind of almost thinks that’s gonna put a patient like. Oh, I don’t have to worry about paying it ’cause it can’t go against my credit.
That’s true, obviously. However, we have to be careful ’cause why do we get there in the first place? So California, big state, lot of people live here. Obviously you have to have some issues with it being there and put a statement on the form. Here is that statement and it says, and this has to be on all of your financial agreements.
Including medical liens for personal injury. It says a holder of medical debt contract is prohibited by section 1 7 8 5 0.27 of the civil code. And again, that’s California civil code from furnishing any information related to this debt to a consumer credit reporting agency in addition to other penalties allowed by law.
If a person knowingly violates this section by furnishing information regarding this debt to a consumer credit reporting agency, the debt shall be void. Unenforceable, which means if you do it, the debt is automatically to zero by law. So don’t mess with this. Don’t report to credit bureaus. Hopefully, Ma, many of you never reached that point, but California’s pretty strict.
You also have to have this onto your financial agreement, so if you haven’t added that in already. Please do if you’re a network member with me, for California in particular, reach out to me. We certainly have some ways of having forms for you to do this. However, there are other states that have enacted their state laws.
So these are an alphabetical order for the most part. I think I have one of ’em out of place here. But it’s Colorado, Connecticut, Maine, Delaware, Illinois, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia, Washington. If your state is listed here. Cannot report anything to the credit bureau.
Now, does this put us in a tough position? I think in a way, because obviously if someone owes debt and they know it’s gonna be reported to their credit, they’re more likely to probably pay that debt and have less problems. Now realize medical debt is also the last thing people pay, and it’s because most of the time we don’t report it, and so therefore they don’t put it in importance to it because it may not hurt their credit.
Keep in mind though. Even the states with this hearings and appeals are very likely and federal courts may challenge it and it may go vice versa. I’m going to say, let’s put in place not worrying about credit reporting, if you will. I don’t think that’s not a tool that you might use if you’re one of the states there, but let’s make sure that you understand.
A lot of it’s already have been occurring for a long time, since the spring of 2023. Major credit bureaus. This includes Equifax experience in TransUnion. And TransUnion have already stopped using medical debts under $500. So if your debt’s under 500, frankly they aren’t going to do it. Doesn’t matter.
Okay. And then certain industry practices like delaying reporting and removing paid medical debt has become a lot easier. It’s an easy dispute if there’s medical debt. So what do we need to do? What is the best practice? This is really what I want to get to. I’m not a big fan of having medical debt. If you can avoid it, and there’s ways of things to do that I wanna speak to you about, to start to set yourself up.
First and foremost, I find that when people need care, they pay for it. So having more of a cash practice, even if you’re using insurance, should there be a cash practice? Sure. Collect what you think the insurance is not gonna pay on the first visit, if the patient’s gonna give you a problem with that. I’d rather know it now than later here would be my point.
I would rather not treat you and not get paid than treat you and not get paid. So keep in mind, set up a good faith estimate so people know what is going on. This is part of the no surprise act anyway, so you should already know. Let’s face it. Do you bill that many insurances anyway, everyone thinks you bill a lot of insurances.
We don’t. We don’t bill that many insurances. There’s probably five to 10 at most. For all of you, you wanna start to look at what does the average one pay? What does the patient’s out of pocket collect? That at time of visit here would be my takeaway. If my bill is a hundred dollars, if I’m not sure what that plan’s gonna pay, I’m probably gonna collect at least 30%.
So $30, maybe even a little bit more. I’d rather collect a little more. Because I can more easily refund the patient or give a credit than Chase after them. ’cause let’s remember a 20 or $30 copay that you don’t collect each time they come in after 10 visits, jumps up to two or $300. All of a sudden, now the patient has a problem paying it.
People, when they pay $20, not a big deal, but when you’re having to pay two or 300, so start to put yourself in a position, collect at the time of visit. The only place this is problematic is large debts, such as personal injury. But if you have a large debt with personal injury. Are we trusting the patient on that one or do we work out some deal with if they have MedPay or PIP or their attorney, do we have a lien?
Do we have some type of you know what I call the lie on paper or letter of protection, but we wanna put things in place here. ’cause what I wanna avoid is getting to the point of collections. ’cause you’re gonna see consumer wise, medical debt will probably no longer really place much of a burden. So I would suggest let’s start putting our self position.
Collect at the time of the visit, estimate it. If you estimate a little high, easy to refund, estimate, a little low, a little collection’s, not bad. What I find happening is people allow that debt to accumulate. That’s when it becomes a problem. So best practice. Set yourself up with a good sound financial agreement.
The patient knows what they’re paying upfront. Have them pay their portion of the time of visit so there is no statements or billing we have to send. I would inform a patient. We don’t send out billing, we just collect at the time of the visit. Therefore, there’s never gonna be an issue. So this is Sam Collins, your coding and billing expert.
If you want some one-on-one help see me at HJ Ross at the network. I help you there. If you’re a network member, reach out to me. I’ll send you the information on this with the type of information that needs to go on the form. Until next time, my friends take care.
Click here for the best Chiropractor Malpractice Insurance
Get a Quick Quote and See What You Can Save