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Bad Debt Approval

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POLICY

Overlake Hospital Medical Center (OHMC) acknowledges that it is an unfortunate fact that some patient accounts will eventually become bad debt due to lack of payment. These accounts are sent to one of multiple collection agencies with which OHMC maintains contracts. The purpose of this policy is to outline how bad debt accounts are identifed and submitted to the collection agencies, and details how accounts are handled once they are placed with the agency. The Private Pay Policy and Procedure explains how an account becomes a bad debt account, specifically it explains the collection efforts that occur before an account is sent to collections. Please refer to that policy for those details.

PROCEDURE

A. Referring an Account to Bad Debt/Collections

  1. PFS supervisors will run the COLLECTION AGENCY TRANSFER compilation routine weekly. This routine uses a system work queue process to assign all bad debt eligible accounts based on the criteria outlines in the PRIVATE PAY POLICY AND PROCEDURE.

  2. All accounts assigned the "BILLED (BAD DEBT)" status are captured in the weekly processing that assigns the accounts in the appropriate work queues to specific collection agencies based on appropriate Account Activities in the system. This process creates collection agency specific files that process through the FTP (File Transfer Protocol) process established with each agency. The assignments are sent to the collection agencies based on a guarnator last name alpha split.

  3. Once a patient account has been referred to collections, the Financial Counselors/Collectors are to refer all patient calls/contacts regarding the account to the collection agency.

  4. Please note that OHMC maintains contractual business associate relationships with any number of collection agencies at all times.

  5. Collection agencies working on behalf of OHMC are required to follow all Fair Debt Collections Act guidelines as well as Washington State collection laws.

  6. Liens on primary residences are last options of the collection agencies to secure potential payment of outstanding claims. Liens are not "executed" to remove debtors from their homes, but are utilized to secure "placeholders" in the event debtors sell or refinance their place of resident, thereby generating financing to repay their OHMC debt.

  7. As the Bad Debt assignment process is an automated process based on age of the account and the number of statements sent, individual account assignment is not required. PFS Management will review high dollar accounts on a case by case basis.

POLICY AUTHORITY

The following are personnel review requirements and approval levels for individual bad debt accounts.

Patient Financial Services Manager/Supervisor: $1 to $10,000

Revenue Cycle Director: $1 to $100,000

Chief Financial Officer: $100,000 and higher

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