A Publication of the Virginia Medical Group Management Association
Winter 2008
Welcome to the quarterly member newsletter of the Virginia Medical Group Management Association (VMGMA).
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VMGMA members have a lot to look forward to in 2008 (cover page)
Make 2008 your year to improve
Don’t let them fool you — interview for keeps!
VMGMA Spring Conference set for April 13-15
President signs legislation delaying Medicare cuts for 6 months
Legal collection FAQ for health care practices
Practice Notes is the quarterly member newsletter of the Virginia Medical Group Management Association. If you have feedback regarding this newsletter, article ideas or suggestions, please contact the editor:
Frank Dieter
VMGMA Secretary
Phone:
(540) 373-1331
E-mail: fdieter@fredcardio.com
Legal collection FAQ for health care practices
by Angela Schettine
Law Firm of Schettine & Nguyen PLC
As collection attorneys, we represent a vast group of businesses on collecting their aging accounts receivables. However, our health care clients pose the most interesting questions and unique nuances as they pertain to collections — and we understand why.
Medical practices walk the fine line of getting paid for the quality medical care they provide without alienating or destroying the doctor-patient relationship. When asked to write this article, we thought it might be helpful to recount the most asked questions from our health care clients and their answers.
Q: How long do I have to collect on delinquent accounts? Are there legal time limitations?
A: The statute of limitations in Virginia for delinquent accounts can be a bit complicated. The law states that if you obtain a signed patient contract/patient agreement, then you have five years to collect. If it is an “open account” with no signatures or contract, then you only have three years to collect. The time starts tolling on the date of last service or the last payment you received from the patient.
Q: What is the FDCPA? Does it apply to our internal collection process?
A: The Fair Debt Collections Practices Act (FDCPA) is a federal statute enacted to protect and prevent consumers from abusive practices from third-party collectors. It does not specifically apply to your own internal collection process, but health care practices may want to notify accounting and collections staff about the FDCPA and ensure that the staff adheres to the spirit of the statute.
Q: If the patient/debtor has filed bankruptcy, can I still recover?
There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Currently, most bankruptcies filed are Chapter 13 bankruptcies. |
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A: There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Currently, most bankruptcies filed are Chapter 13 bankruptcies. Under Chapter 13, all hope is not lost. Your office or your attorney can file a Proof of Claim, which is a document that puts you in line as a creditor after the bankruptcy has been filed. This ensures that you may receive monies disbursed by the trustee of the bankruptcy.
Q: What if the debtor is deceased. Can we still recover for the services we provided?
A: If the debtor had an estate, you may receive payment from that estate.
Q: Are spouses financially responsible for one another’s health care incurred debt?
A: Virginia Code Section 20-108.2 states that spouses will be liable for expenses incurred as a result of a medical emergency. If a spouse is a guarantor on the patient agreement/contract, then of course they are also liable.
Q: What is a Warrant in Debt? Can I file a Warrant in Debt myself, or do I need an attorney?
A: A Warrant in Debt is a form used in General District Court to seek money from another party. Fees for filing such a warrant vary from $29 to $36, depending on the city or county where the warrant is filed. A medical practice may file the document and go to court without an attorney.
Q: What post-judgment remedies are available?
A: After a judgment has been obtained, there are various post-judgment remedies available to make certain that your practice gets paid. These remedies include: debtor interrogatories, liens and levies and garnishment of bank accounts and wages. In Virginia, the most commonly used form of remedy is garnishment of bank accounts/wages. We advise our clients that it is important to always update the patient file with employment information and to keep copies of checks, just for this occasion.
As our economy takes a dip, inevitably we will see an increase in outstanding accounts receivables. This does not have to mean a decrease in revenue for your health care practice. By keeping in mind the legal issues involved, defining an internal process for accounts receivables and employing a skilled third-party collector, your practice can limit lost revenue via delinquent accounts. By simply committing to a defined approach to aging accounts receivables upfront, you can protect the financial strength and integrity of your health care practice, thus leaving you time to focus on what really matters — high-quality patient care.
The attorneys at Schettine & Nguyen PLC are always available for questions via phone or e-mail. They can be reached at (804) 788-7970 or aschettine@snlawfirm.com.
