Subject: Others
Language: English (U.S.)
Pages: 11
Develop a Billing and Collection Policy for a physician practice. You must effectively develop a thorough policy for use within the practice by practice employees and a thorough policy that will be provided to patients. The two are different. Refer to the internet and other research sources. Your finished paper should resemble true policies that would be used in a physician practice setting. Please note this assignment is NOT a discussion paper about collection policies but rather an actual policy for use in a physician practice. Submit your assignment to the assignment tab. You cannot submit policy from an actual practice. Paper must be a minimum 10 pages.

Billing and Collection Policy


Medical practice business is becoming quite complex, and its survival requires that it generates revenue. To drive physician practice results and to accelerate the revenue cycle requires changing health care regulations, developing policies and maintaining compliance through creating avenues and tasks for money collections. Since credit to clients is extended on competitive terms, it thus necessitates any Physician practice business to offer credit to its Clients/ Patients. A well-formulated Billing and Collection Process enables the business in managements of receivables. This process seeks to avoid long overdue accounts to prevent possible occurrences of having the capital being tied up and minimizing the chances of bad debts.  

This document develops a Billing and Collection Policy for a physician practice. The policy documents will serve both the practitioners and their patients. The policy document for each category is formulated differently as for the employees and patients. The policies and practices of the Billing and Collection are in accordance to American Hospital Association (AHA) Statements of Principles and Guidelines. For the purpose of the objectivity of this assignment, a factious name, Valley Road Clinic, is adopted.   

Billing and Collection Policy for Valley Road Clinic 

Policy Statement

Valley Road Clinic is committed to allocating the available financial resources efficiently to cut down the health cost for the patients in the society, who are mainly in need, and consistent with their particular legal obligation. It is the policy of Valley Road Clinic physicians to offer reasonable efforts to establish whether an individual is legally eligible for the financial assistance under Financial Assistance Policy (FAP). In the case where patients do not apply for the aid and in the instance they do not pay for their balance, the account shall be sent to a collection agency.

This policy is abiding and recognizes that the financial resources of Valley Road Clinic are limited; and that the Clinic has a fiduciary obligation to bill and collect aptly for the patients' services. Valley Road Health Clinic does not discriminate on the racial basses, Gender, age, national origin, citizenship, religion, disability or sexual preference in the application of the policies, in the acquisition and verification of financial information, pre-treatment and pre-admissions deposits, plans of payments, deferred or rejected admissions, status of eligibility determinations or their billing and collection practices.

The Valley Road Clinic also recognizes that patients who are uninsured or underinsured can be burdened by the cost of the necessary health care services. To lessen this situation the Clinic seeks to create processes and practices favorable to such patients. The clinic is aware of the complexity of billing and collections process and has, therefore, has implemented effective procedures to make the process more comprehensible to the patients. In so doing the Clinic seeks to inform the patients about the options of discount and financial assistance.

In line with these commitments, Valley Road Clinic maintains a Billing and Collection plan that acts in agreement with the applicable state and federal laws and legislation. The policy thus describes the discount programs and financial assistance as well as the Billing, collection and payment procedure that are applicable to the services provided to an individual patient. The policy further states that it addresses only those programs and processes applicable to patients or and the patient Guarantor and not liable to third party payers. The Billing and Collection Policy is established to ensure that it complies with applicable regulations under: (1) the centre for Medical Care (Medicare) and Medicaid Services Medicare Bad Debt Requirements (42 CFR; 413.89), (2) the Medicare Provider Reimbursement Manual( Part I, Chapter 3), and (3) the Internal Revenue Code Section 50I (r).       


VRC: Valley Road Clinic

Financial Assistance Program (FAP): This program is anticipated to help low-income patients who otherwise lack the financial ability to settle their health care services. Such a plan recognizes the ability of an individual’s contribution ability towards his or her medical care. Considerations are also given to persons who have exhausted their insurance benefits and who exceed financial eligibility criteria but in one way or the other may be facing extraordinary medical expenses. Employer-sponsored, individually purchased Insurance plan or publically available financial assistance does not substitute Financial Assistance Program.

AGB: The amount normally billed for either emergency or other medically necessary health care to persons who have insurance cover policies. 

Medically Necessary Service: This is a service that is rationally expected to prevent, prevent worsening of, diagnose, alleviate, correct or cure a life-threatening condition, cause suffering or Agony, lead to physical or physiology damage, deformity or malfunction, threaten to cause or intensify a handicap or result in illness or and frailty. Medically Necessary Service shall further include inpatients and outpatients services as authorized under title XIX of the Federal Social Security Act.

Emergency Care: immediate health attention care that is importantly necessary for the opinion of the physician in attempts to saving the life of the patients or to prevent putting the patients’ health in jeopardy, serious bodily function impairments or causing serious dysfunction of any body part or organs.

Non-Covered Services: these services include and not limited to; non-medical services such as social, educational, and occupational services; cosmetic surgery; or self-administered medications.

Elective: those health care and Medicare services that in, in the opinion of a medical practitioner/ physician, are not medically necessary or can be safely be postponed.

Primary Care: they consist of health services customarily offered by a general practitioner, family medic, General Internists, general pediatrician and primary health care nurse practitioner or physician assistants, for the reason of preventing, diagnosing, or treating an acute or chronic diseases or accidental injury, but exclude ancillary services plus maternity care service.

Estimate or Patient Liability: refers to the expected out-of-pocket cash amounts provided to the patients based on his or her specific procedure, attending practitioner and insurance policy. Such an estimate should not be interpreted as the exact or the possible final cost. 


Bad Debt: all Accounts that have been termed uncollectible for the reason that the patient has been unwilling or completely in a position not to pay for their medical care.

Extraordinary Collection Actions (ECAs): are activities under taken by the Valley Road Clinic against an individual about recover the payments of a bill for the health care under Clinic’s FAP that requires federal legal or judicial process. Similarly, the clause states that VRC can engage in selling the defaulter’s debt to another party or report the adverse information of the patient to the consumer credit reporting agencies or federal credit bureaus.  

Household Financial Income: Household Financial Income as regulated and evaluated against annual Federal Poverty Guidelines includes, but not limited to the following: 

•   Annual household pre-tax job earnings

•   Unemployment Compensation

•   Worker’s compensation

•   Social Security and Supplementary Income

•   Veteran’s Payments

•    Pension or Retirement Income

•   Other applicable income to include but not limited to; rents, child support, and any miscellaneous source

Third Party Insurers: any party insuring the patient’s payments to include but not limited to insurance companies, Worker’s compensation, Victim’s Assistance, Governments Medical schemes or third party liability as a result of the automobile or other insured accidents.

Uninsured: Patients who do not have an insurance policy, nor covered under Work’s Compensation, Government Medical Scheme, Victim’s assistance and or Third- Party Liability.

Underinsured: Patients who may benefit from third-party liability funding but stand a risk of high out-of –pocket costs due to the package of their policy plan

Delivery of Health Care Services

The mission of the Valley Road Clinic is to serve the community (people) with health care needs 24 hours a day, seven days a week. The task of the health care offered by VRC’s staff is to care, cure and safe lives. The clinic is guided by the principles of equitability, dignity, respect and compassion. VRC is committed to offering the emergency health care needs to everyone, regardless of the patient’s ability to pay. The services extend to assisting the patients with financial handicaps and balances needed FAP for the patients with broader fiscal responsibilities in order to keep the doors open for all those who need the health care services.


Valley Road Clinic pledges to the delivery of health care services for patients who attend the services in Emergency Department despite their ability to pay. In accordance with the local, state, and national standards of clinical care, the urgency of the treatment will be determined by the medical professional and hospital; medical staff policies and procedures.

 Emergency and Urgent Care Services

Valley Road Health complies with the Federal Emergency Medical Treatment and Active Labor Act (EMTALA) by predetermination whether an emergency medical condition exists when required as per the guidelines of the law. Any patient present to the VRC will be evaluated as to the intensity of the emergency or the extent of the urgency of the care services regardless of the patient’s identification, insurance cover or his/her ability to pay for the services. 

Non-Emergent, Non-Urgent Services

The clause covers those patients who either (a) are present at Valley Road Clinic seeking non-urgent or non-emergent health care or (b) seeking extra care following stabilization from an emergency medical condition. VRC may in such a case provide elective services after a consultation with a physician and assessing the patient’s coverage plans. These elective health care services can be medically essential services that do not qualify to be categorized as Emergency Level services or Urgent Care services as defined here above. Characteristically, these services are either primary care services or medical modus operandi prior scheduled by the patient or their respective health care providers such as hospitals, physician offices or any other health care provider.


Billing and Collection Guidelines

It is the policy of Valley Road Clinic to employ ECAs against any person before making reasonable efforts to determine if the client is eligible for the FAP assistance. In consistence with the provisions herein, the bill balances shall not be sent to a collaborating collection agency before 120 days of the first statement to the patient. Assistance consideration will still be given to the persons whose balances are with the collection agency.

The patient shall receive a letter from VRC in addition to their final statement, notifying them of their account is being sent to a collection agency. The patient, therefore, has 30 days to respond to the letter.

Following so, Valley Road Clinic patient’s accounts will be subjected to the collection actions:

-   The Credit Bureau reporting (which will not take place until after 240 days counted from the first statement to the client)

-   Valley Road Clinic shall pursue legal action against the person who does not qualify for the FAP and has sufficient assets that cover the balances more than 240 days outstanding. Legal action shall not be taken against such as patient until approved by the Revenue Cycle Director. The legal action may result in a lien on possessions. 

-   VRC may sell an individual’s debt (balances due) to another party in an event when the normal collection process does not result in payment.

The next steps due to the process of collection shall include and not limited to the provisions outlined in Billing and Collection regulations and guidelines. The process includes determination of Financial Assistance Eligibility and Processing Financial Assistance Applications. 

Miscellaneous Provisions 

a.   Anti-Abuse Rule- The Valley Road Clinic will not base its findings on a particular patient that they are not FAP –eligible on information that VRC has cause to believe is unreliable or erroneous or the information provided by the individual under compulsion or through the use of coercive practices.

b.   Presumptive Eligibility- VRC will have made reasonable efforts to establish the qualification of an individual for FAP. In an event that Valley Road Clinic determines that an individual is eligible for the most generous assistance (that may include free care) available under FAP based on the information other than that provided by the patient as part of a complete application for FAP, then VRC meets the requirements described above with regard to processing the FAP application.

c.   No Waiver of FAP Application- VRC will not involve in obtaining a signed waiver from any patient stating that the person does not wish or intend to apply for the Assistance under FPA plan, or receive the notifications described here above, in an attempt to make a determination of FAP eligibility.

d.   Final Authority for Determination FAP eligibility- Final authority for determining that VRC has put sound efforts in the process of determining whether an individual is FAP-eligible and may after that employ in ECAs against such an individual rests with Revenue Cycle Director ( RCD) or Assistance Vice President.  


Documentation of collection Effort

All financial records for the patients shall be maintained by the Valley Road Clinic as required by applicable law and in accordance with Hospital guidelines and policies. Such documentation will support Billing and Collection actions and will consist of all records of the Hospital’s collection endeavor including the bills, codes and letter templates, records, and reports of telephone and letters sent, personal contact and any other form of the effort put in place. These documentations are confidentially retained until audit review buy the federal and/or the state agencies of the fiscal year Cost Report on the particular bill or account is reported. Such documentations can nonetheless, be retained even for longer for availing in the event that they are required by the law or internal policy.

Population Exempt from Collection activities 

Individuals who are beneficiaries of public health insurance program including but not limited to the state Medicaid Policies are exempt from Billing and collection actions after the primary bill pursuant to state bylaws subject to the following exceptions:

Valley Road Clinic may seek collection action against any individual enrolled in the plan mentioned above for their obligated co-payments and deductibles that are set forth by each specific program

VRC may review billing and collection actions for the person who alleges that he or she is a beneficiary of the State Program that is required to cover the cost of the services, but not able to support a proof such participation. Valley Road Clinic shall cease billing and collect actions against such patients upon satisfactory proof that he or she is a participant of State Program. Such claim shall be accompanied by receipts or verification of signed application.


Valley Road health Clinic may initiate collection action for items and services are excluded from the State Program coverage. That is non-covered services.

The Clinic will cease any collection actions against any person who have applied for Financial Assistance under Hospital Financial Assistance Program. VRC will allow ample time for the patients to provide the missing information in a case of incomplete application. VRC and their agents shall cease to collect or bill on the patient balance that is bankrupt but shall secure its rights as a creditor appropriately.  

Physician Providers

All physicians bill separately and independently. That is, Emergency Physician, Radiologist, Consulting Physicians, Cardiologist, and Pathologists have different billing and collections plans. These providers may not participate in the same health care plans as the hospital. The patient, therefore, is advised to contact their offices directly to inquire whether or not they participate in their health plans and any other query about their bills.

 Customer service

Throughout the process of billing and collection, Valley Road Clinic shall nonetheless continue in her undisputed quality customer service by implementing the following guidelines:

-   VRC shall at all time enforce zero tolerance standards for offensive, harassing, abusive, deceptive or any misleading information and language or misconduct by its employees. 

-   The clinic will maintain a rationalized process for the patient queries or/and disputes, which may include information about the health care contacts and addresses. The information will remain as listed on all the individual's bills and collections statements sent.

-   In the event of receiving from the patient by voice calls or in writing, Valley Road Clinic staff shall respond to the calls to the patients as prompt as possible but not more than two business days after the time of the recipient of communication from the patient.    


 The above policy statement is a legally binding contract between the Valley Road Clinic as a health care provider and its clients (patients) in agreement with the local, state and federal law and as guided by the Hospital Association Regulations and Policies. Each of the parties should then abide by the terms and conditions mention herein. Any violation of the guidelines set in the documents shall be termed as an offense and sueable in legal agencies.       


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