School of Medicine/MFPP

Contact:       MFPP

Phone:         919-816-2173

Fax:           919-816-2095

Collection of Past Due Invoices

Any accounts listed in the 90-180 day category of the Contracts Management Receivable System Aging Report are issued an "Overdue" Notice.

If no response is received within (30) days of the "overdue" notice, a letter is sent to the agency stating collection policies and procedures. In addition to the overdue notice at (31) days, a $10.00 late fee will be automatically added to the invoice amount. Interest will be applied to past due invoices when the outstanding amount reaches 31 days past due. Interest will be calculated using the N.C. Department of Revenue current annual rate (9% of 01/97). Interest will be added each month that the invoice remains unpaid.

If no response is received within (91) days and the invoice is more than $500, the Attorney General Accounts Receivable submittal form is completed, listing past due invoices, agency, address, social security number, amount and the date the invoice became past due.

Attorney General demand letters are created for each agency and printed on Attorney General letterheads. The demand letters, copies of backup documentation and submittal forms are mailed to: Mrs. Eileen Shugar-Shulman, Manager, Collection Section, N.C. Department of Justice, PO Box 629, Raleigh, N.C. 27602-0629. A copy is retained in the contract pending file for each list submitted.

Mrs. Shugar-Shulman, in the Attorney General's office, will sign the letters and stamp with the Attorney General seal and return the original letters to our office for distribution along with a cover letter indicating the date our responses are due back to the Attorney General's office. Contract accounting will mail the demand letter, an invoice and necessary backup documentation to the agency. The agency is given 30 days to respond.

Contract accounting is requested to contact the Attorney General's office with the responses within forty-five (45) days from the date of the demand letter.

Contract accounting is to use the following codes to indicate the type of response received from the debtor: PD-Paid, SR-Satisfactory Response, UR-Unsatisfactory Response, NR-No Response.

After the forty-five-day limit has expired, the Attorney General Manager lists the dispositions of the cases. The Attorney General's office will sue for State agencies who request suit on accounts $200 or more.

The Attorney General's office will file a civil summons and complaint for each debtor against whom suit is requested.

All write-offs will be approved by the appropriate department within the School of Medicine and the MFPP Director-John Zizzo.

If an account is more than 91 days old and is less than $500, the account is to be turned over to the State approved collection agency. Contract accounting is to complete the detail submittal form supplying the necessary information to the agency. Copies of invoices are to be attached to the listing as back up documentation.

Each month, thereafter, the collection agency will send a statement and a check made payable to ECU School of Medicine Contract accounting representing the accounts collected less the collection fee retained by the service.

Contract accounting will post the payments against the appropriate invoice. The amount retained by the collection agency will be adjusted by Contract accounting as a small balance adjustment with Mr. John Zizzo's approval.

Any payments inadvertently deposited to the Practice Plan that were submitted to a collection agency, checks will be issued for the collection fee payable to the collection agency.

One it is established that an agency is delinquent, the MFPP accounting office will inform the School of Medicine Departments to refuse service to the agency. This will be done in memo form from the MFPP Director to all School of Medicine Department Heads and Administrators. However, no individual will be denied medical/mental health services pursuant to Federal and State Law.

An allowance for doubtful accounts has been established from historical data to capture the amount greater than 180 days that is uncollectible. This amount is divided by the total Accounts Receivable balance at 06/30 to determine the percentage for allowance for doubtful accounts. This percentage should be updated on 06/30/99 and every three years thereafter for a more accurate allowance.
 
   
 

PROCEDURES FOR PAST DUE ACCOUNTS
CONTRACTS MANAGEMENT
AS OF 1/24/97

Patient Accounts

Contact:       Accounts ECU Physicians Patient

Phone:         919-816-2320

Fax:           919-816-3194

Patient Due Billing Process

Patients are responsible for payment of co-payments and previous balances at the time of service. It is the policy of East Carolina University to generate and mail statements reflecting a patient's balance due amount only after insurances(s) have been filed and provided sufficient time to pay, typically 60 days.

The billing process is subject to all the conditions of the ECU School of Medicine's third party participation agreements.

Time frame for billing patient due balances--

Three monthly statements are generated. If the account balance is not paid after two monthly statements or  a suitable payment arrangement has not been established, the third statement informs the patient that the account is past due.

Delinquent Accounts

Step 1---Third Statement and Credit letter Notice

A credit letter (overdue notice) is mailed to the patient ten days after the patient's third monthly statement. This letter states that the patient has twenty days to pay the amount due before more serious action is taken.

*Exception*: If the patient has invoices already at collections they received only one monthly statement on new invoices before going to collections.

NOTE: This process stopped at the request of the Attorney General's Office. (7/95)

Step 2---Collection Agency

If payment is still not received within twenty days of the credit letter (i.e. 90 days after initial statement), the account is submitted to an outside collection agency and the patient's credit rating is updated with the delinquency information. The account’s status is changed to a collection status.

Step 3---Set-Off Debt Collection Act

A list of delinquent debtors, their social security numbers, and their corresponding balances (if greater than fifty dollars) are submitted to the N.C. Department of Revenue on a monthly basis in compliance with the Set-Off Debt collection Act. This is a state government-sponsored program that provides for the withholding of money owed to state agencies from debtors' N.C. State Income Tax Refund.

Step 4---Attorney General Letter

Accounts with delinquent balances not satisfied by collection agency intervention  and SODCA (Steps 2 and 3) are submitted to the N.C. Attorney General's Office on a quarterly basis.  The patient receiveds notification from the Attorney General's Office indicating legal demand for payment.

Step 5---State Employee Debt Collection Act and Small Claims Court

The State Employees Debt Collection Act (SEDCA) is used as a remedy for collecting from employees of the state of North Carolina. This remedy SEDCA is used when all other collection efforts have failed. A letter is  mailed to the debtor informing him or her of the indebtedness and intended action. A letter is mailed to the debtor's employer or after 30 days.  The debtor’s employer assists the Patient Accounts Department in its efforts to work out a suitable payment arrangement for the state-employed debtor.

In lieu of SEDCA, a magistrate summons may be filed for debtors not employed by the State of North Carolina when all other remedies have failed and the delinquent balance is $100 or more.  The summons are filed when a review of real and personal property tax records indicates that the summons expense is reasonable to incur.

Interest and Penalities

Interest and penalties are not currently imposed for the following reasons:

·         Not consistent with other physician practices in our geographic area

·         Not permitted by most of the managed care plans with which we are contracted

·         Not consistent with the school's mission to provide health care to the under-served population of eastern North Carolina.

Criteria for Writing Off

Delinquent accounts are written off as bad debts eighteen months after initial filing with an outside collection agency and SODCA if all collection remedies have been unsuccessful. The status on these accounts is changed from C1 and C2 (collection agency) to CABD (collection agency bad debt) or SDI (SODCA) to SDBD (SODCA bad debt) to flag the account that a bad debt write off occurred.  After write-off, the account remains active at the collection agency and the N. C. Department of Revenue for potential activity in the future.
Bad debt allowance is equal to all accounts receivable greater than five months old with minor adjustment for the prior year's experience.

ECU Care

“ECU Care” is a program co-sponsored by Blue Cross Blue Shield of North Carolina.  The program serves as a safety net for uninsured patients by offering financial assistance with medical bills for professional services provided by ECU Physicians and reduced pricing on certain prescriptions filled at ECU Physicians pharmacies.  To be eligible for this program, the patient must be uninsured, must apply and be denied for Medicaid, and must provide evidence that household income is at or below federal poverty levels.
*This program does not cover Pitt County Memorial Hospital facility charges.