Challenges for Healthcare Providers, Opportunities for Their Partners
Published: January 29, 2009
To understand the unique situation of each healthcare client, agencies need to develop relationships that foster open communication for both parties.

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In order to identify and take advantage of new business opportunities with healthcare clients, it's important to understand the challenges they are facing and develop an appropriate approach for solutions, according to Suzanne Lestina, technical manager of Patient Financial Services/Revenue Cycle at the Healthcare Financial Management Association in Westchester, Ill.

On a general level, providers are facing decreased use in front-end services, such as financial counseling, insurance verification and registration, because consumers are delaying care and visiting the emergency room when their conditions become unbearable. In today's environment many of these patients are self-pay, which is leading to an increase in bad debt for providers.

In 2009, providers are combating their challenges by “doing more with less,” said Lestina, which may entail downsizing staff, delaying technical purchases and looking to third-party resources for assistance. And above all else, providers are focusing on cash collections, she said.

By knowing the unique situation of each healthcare client, collection agencies can maximize opportunities with their provider partners. To do this, agencies need to develop a relationship with the provider that fosters open communication for both parties. If they don't, providers may be reluctant to discuss their current issues with the collection agencies for fear of damaging their reputation.

“I know there are negative feelings out there,” said Lestina, referring to the reluctance of providers to share their issues openly with agencies. “You have to be able to get over that barrier and build a relationship of trust.”

One way to develop a relationship with the provider is to know the provider's services, understand its unique mission, stay-up to-date on current projects and understand the community in which the provider works. Agencies can let providers know they thoroughly understand their business and patient base, which will make providers more comfortable discussing the issues they face.

After a relationship is established, agencies can approach the provider with possible solutions. However, it's important to understand that the provider may not be able to forfeit a large portion of its budget to pay the agency for its services. Lestina suggested agencies offer to stratify the provider's accounts receivable at no charge in order to give the provider an idea of where its needs may exist. Then, if the provider decides to move forward with the agency, the agency could charge for the solutions. “Start small in order to grow bigger,” she said. Always give the provider more than one solution to its problem.

By understanding the challenges of clients, and assisting clients in overcoming those obstacles, agencies will be able to find new business opportunities in 2009.

FTC Reports to Congress on Studies Required by FACT Act
Published: January 29, 2009
The Act requires the FTC to study the accuracy and completeness of information in consumer credit reports and to deliberate improvements.

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Last month, the Federal Trade Commission (FTC) issued the third interim report to Congress as required under the Fair and Accurate Credit Transactions Act (FACTA) of 2003. The Act requires the FTC to study the accuracy and completeness of information in consumer credit reports and to deliberate methods for improving such accuracy and completeness.

The previous interim report to Congress (December 2006) reviewed the results of an initial pilot study designed to test potential methodology for a nationwide survey. The study's results produced a proposed second pilot study to address problems revealed from the initial study. These studies involved randomly selected consumers who reviewed their consumer reports with an expert who identified any potential errors within the report. Any potential error the expert believed could have a material effect on the consumer's credit standing was disputed with the relevant consumer reporting agency (CRA).

The recently issued report explains the methodological improvements tested in the second pilot study. Based on the study's results in 2009, the FTC plans to submit a proposal for a nationwide study assessing consumer report accuracy.

The FTC's goal is to conduct a nationwide survey of consumer reports that uses a reliable method for identifying errors and omissions, categorizes errors by type and seriousness in terms of potential consumer harm, and is based on a nationally representative sample.

View the FTC's December 2008 interim report to Congress.

.S. House Passes “Cram Down” Bill
Published: February 9, 2009
Legislation would give judges the ability to modify mortgage terms.

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The House Judiciary Committee recently approved legislation that would give bankruptcy judges increased authority to modify home mortgages, particularly by reducing the principle amount of the loan.

While the bill was narrowed in order to gain the support of the major banks, currently only Citigroup backs the measure.

According to CongressDaily, Judiciary Chairman John Conyers made three changes to the bill requested by Citigroup in exchange for its support: to limit eligibility to loans made before the date of enactment, to require borrowers to notify their lenders 15 days before filing for bankruptcy, and to establish that only major violations of the Truth In Lending Act would invalidate creditor claims during a bankruptcy proceeding.

In addition, several provisions were added to make it more palatable for lenders, who oppose the measure because it would force them to write off losses in the midst of the biggest banking crisis since the Great Depression.

Chairman Conyers, however, remained opposed to one, key industry-supported provision: to limit the loans only to subprime and nontraditional loans that were at the root of the housing crisis.

The bill was approved by the full committee, 21-15, and House leaders are expected to wrap it into an upcoming “must pass” omnibus appropriations package—different from the recently passed economic stimulus package.

How Much Do You Know About Healthcare Scoring?
Published: February 9, 2009
The responses to a few true/false statements may surprise you.

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Test your scoring knowledge by determining if the following statements are true or false:

Scoring can be a highly effective tool for managing healthcare receivables.
True. Did you know 30 percent of healthcare accounts yield more than 90 percent of cash collections? This statistic illustrates the importance of scoring and the need to focus collection efforts on the best accounts, according to David Franklin, chief development officer at Connance Inc. in Waltham, Mass. Franklin was one of four speakers to address the topic of scoring at ACA's Fall Forum conference in November 2008.

The ability to identify accounts that will yield the best results, however, can be a challenge because the accounts that represent the best opportunities are not always with the accounts that have the largest balances, Franklin added. That's why it's important to look at the cash value of each account in order to prioritize and determine which will yield the best results.

Scoring is only effective when you use “the right tool for the right situation,” said Rob Fite, vice president of collection solutions for LexisNexis Risk Information & Analytics Group in Alpharetta, Ga., who also spoke at Fall Forum. He noted there are many types of scoring models that are built for different stages of the collection process, and they are often used incorrectly.

The same scores that are used for healthcare providers can be used by collection agencies, and vice versa.
False/it depends. The intended use of the score will determine whether the same score can be used by a provider and a collection agency. For example, if a provider uses data from the early stages of collection to develop a score, the result will be significantly different than a collection agency that uses data from the late stages of collection to develop a score.

Scores derived from credit bureau data work best.
False/it depends. Approximately 30 percent of self-pay cash collections come from patients who are “unscorable,” meaning they do not have a credit bureau file, Franklin said. That's because credit bureau data does not necessarily determine a consumer's propensity to pay with regard to healthcare debt—credit bureau data predicts consumers' likelihood of paying bills in general. When credit bureau data is combined with healthcare payment data from specific healthcare facilities, it can be significantly more effective.

Existing Home Sales Increase
Published: February 9, 2009
National Association of Realtors reports unexpected 6.5 percent jump.

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Existing-home sales rose unexpectedly in December, while inventory declined, the National Association of Realtors recently reported. Existing-home sales—including single-family, townhomes, condominiums and co-ops—jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December from a downwardly revised pace of 4.45 million units in November, but are 3.5 percent below the 4.91 million-unit pace in December 2007.

In 2008 there were 4,912,000 existing-home sales, which was 13.1 percent below the 5,652,000 transactions recorded in 2007. This is the lowest volume since 1997, when there were 4,371,000 sales.

The national median existing-home price for all housing types was $175,400 in December, which is 15.3 percent below December 2007, when the median was $207,000. There remains a significant downward distortion in the current median from a large number of distress sales at discounted prices, currently 45 percent of transactions; the median is where half of the homes sold for more and half sold for less. For all of 2008, the median price was $198,600, down 9.3 percent from $219,000 in 2007.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.29 percent in December from 6.09 percent in November. The rate was 6.10 percent in December 2007, and last week, Freddie Mac reported the 30-year rate was 5.12 percent.

Single-family home sales rose 7.0 percent to a seasonally adjusted annual rate of 4.26 million in December from a level of 3.98 million in November, but are 1.4 percent below a 4.32 million-unit pace in December 2007. For all of 2008, single-family sales fell 11.9 percent to 4,349,000.

The median existing single-family home price was $174,700 in December, down 14.8 percent from a year ago. For all of 2008, the single-family median was $197,100, which is 9.5 percent below 2007.

Existing condominium and co-op sales increased 2.1 percent to a seasonally adjusted annual rate of 480,000 units in December from 470,000 in November, but are 18.4 percent below the 588,000-unit level a year ago. In 2008, condo sales dropped 21.0 percent to 563,000 units.

The median existing condo price was $181,400 in December, down 18.3 percent from December 2007. In 2008, the median condo price was $210,000, which is 7.2 percent below 2007.

Florida Implements New Release of Regulatory Enforcement and Licensing System.
Published: February 23, 2009
New system allows collection agencies to automate the majority of the licensing process..

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The state of Florida has implemented its second release of the Regulatory Enforcement and Licensing (REAL) System. The REAL System replaces the Florida Office of Financial Regulation's existing licensing and enforcement system and Web site functions. The new system is intended to streamline and improve the efficiency of Florida's licensing and regulatory processes.

The new process will provide the Office of Financial Regulation with an integrated financial regulatory management system by combining core processes for fiscal, licensing, investigations, examination, legal and complaint functions. The project is also anticipated to provide the Office of Financial Regulation with additional capabilities allowing the agency to more effectively focus its enforcement activities, consumer awareness and industry outreach activities where they are needed most.

This new system allows collection agencies to automate the majority of the licensing process. An agency must have an authorization code (provided on the renewal letter) to access its information.

For more information on the REAL System, visit the Florida Office of Financial Regulation's Web

USPS Amends Move Update Standards
Published: February 23, 2009
Recent changes increase the minimum frequency of Move Update processing for mailers wishing to receive the best postal discounts.

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The United States Postal Service (USPS) Move Update standards provide mailers with discounted mailing rates if the mailer certifies the addresses included in the mailing have been updated to the addresses provided to the USPS via customer change-of-address forms. The standards have been amended to increase the minimum frequency of Move Update processing from 185 days to 95 days prior to the date of mailing and to extend the standards to include all standard mail. The regulations went into effect Nov. 23, 2008. Compliance is not required unless the mailer wishes to participate in order to obtain certain discounts on mailings.

The Move Update program was instituted in 1997 to provide methods for mailers to reduce the number of mail pieces that require forwarding, return or discard through the periodic matching of a mailer's address records with USPS customer-filed change-of-address orders. The program aims to reduce wastes of time, effort and money for mailers and the USPS which occur as a result of undeliverable-as-addressed (UAA) mail.

The revised standard requires all addresses on mailings, receiving pre-sorted or automation discounts for first-class or standard mail, undergo name and address correction within 95 days of the mailing. The standard applies to each address and not to a specific list or mailing. Mailers must use a USPS-approved method for updating addresses. These include:

• ACS or OneCode ACS.
• NCOALink – 48 or 18 months.
• FASTforward MLOCR.
• Appropriate Ancillary Service Endorsement.
• Alternative methods (only if authorized by the National Customer Support Center).

Once the address has been updated using one of the aforementioned approved methods, the mailer must certify that the names and address on each mail piece have been updated on the postage statement submitted in order to receive the mailing discounts.

A debt collector may find Move Update beneficial as it reduces mailing costs and may also enhance operations by improving address accuracy, timeliness and deliverability of collection notices. However, it is important to note that some of the approved methods require the disclosure of the mailer's address list, which may potentially violate third-party disclosure prohibitions under the Fair Debt Collection Practices Act. Collection agencies with such concerns can comply with the Move Update requirements by using on-piece ancillary service endorsements or international FASTforward matching, as neither requires the mailing list to be provided to a third party.

Further information on these standards may be obtained at the USPS Web site.